Contractor UK Market Report: Rates slip back

The festive season has brought little in the way of goodwill to the nation's IT contractors, with rates dropping back from their third quarter surge. In October 2009, we reported a dramatic rise in rates, moving up 18% from the average of £25.94 at the end of quarter two, to £30.53. As usual, these averages are taken for the ten most commonly requested IT contractor roles.



But the last few months of the year have brought a slide backwards, completing an up and down 2009. Average rates now sit at £28.45, a drop of 7%, but still comfortably above the £25.94 low set at the end of June. But, given that the dip has come in the final part of the year, as thin budgets run out, and new projects are held back, this dip should not be unduly concerning.



Analyst and business analyst rates have seen the biggest drop, which is generally a sign that the number of new projects has fallen off. BAs saw their rates fall from an average of £29.25 in October to £23.50 today. Project managers suffered similarly, dropping from £40.13 to £32 over the same period, a fall of 20%, but this is not surprising, given the leap of 57% that PM rates saw between the ends of Q2 and Q3. Developers and the catch all 'consultant' went largely unchanged, while C# and .NET developers lost a couple of pounds off their averages. Only average rates for Java developers and administrators went in the right direction.



But as the hangovers dissipate and the New Year's resolutions fade from must-dos to wouldn't-it-be-nice-ifs, minds turn to the year ahead, and where the money might be made in 2010. A number of researchers have been out with their virtual clipboards in hand, and the future seems relatively bright.



Tech research firm Gartner, for example, has recently released some figures suggesting IT spend will rise this year, with 43% of the senior decision makers they spoke to saying that their IT spend would rise in 2010, and only 13% expecting to spend less.



Recruiters' organisation the REC sees broadly encouraging news from its Jobs Outlook report. As director of research Roger Tweedy explains, "There is evidence that life is returning to the UK's labour market. After several months of uncertainty it seems that firms are becoming more confident about their future hiring intentions."



And there seems to be a broad consensus that financial services will lead the way. According to recruitment website theitjobboard.com, 48% of IT professionals see banking as the industry most likely to be hiring this year, with 42% suggesting software and IT services, and 41% seeing telecoms as the biggest spender. Peter Healey, the site's sales director offers the simple explanation that, "banking was the first to be hit during the recession, but it will also be the first to recover, and it will offer a lot of opportunity in terms of IT recruitment." The industry has been ruthless in its sacking of permies in the last 18 months, and has limited options for legally rehiring full time staff after mass lay-offs, which could further enhance contractor options.



As for technologies themselves, the excited talk about cloud computing continues, with research from IDC claiming that cloud services will account for one quarter of global IT spend by 2012. Mary Johnston Turner, a research director with the company, reckons that "the underlying theme this year is that customers are ready to transition away from static, legacy computing environments to dynamic, converged, and cloud computing architectures. Having survived the Great Recession of 2009, IT decision makers will remain very cost conscious and open to considering non-traditional solutions." The trend to cloud computing is yet to make a real impact in the contract market though, according to our itjobswatch figures. While permie roles in the field have risen by 17% to £52,500 over the last few months, there are very few contractor roles available.



The growth of .NET should continue in 2010 according, again, to the research from theitjobboard.com. Some 31% of the IT pros questioned in its survey reckoned it would be the most in demand skill for the year, while 29% opted for SAP, and 26% Java and web development. And SEO (search engine optimisation) is likely to continue to grow, according to recruitment firm CV Screen. Its figures show demand for SEO skills increased by 40% over the last year according to the firm's MD, Matthew Iveson, who says that, "with online retailers such as Amazon, ASOS and Play.com having phenomenal growth, it is clear that more and more companies will be looking to bolster their online presence as we move in to 2010."



Whatever the coming year holds, it would appear that it comes with greater promise than 2009.



Matt Farquharson



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