End-user caution depresses IT contractor demand

IT contractors using agencies to work as SQL Developers and Business Analysts were the most sought-after in August, bucking the growing, overall trend of demand for contract IT skills being dwarfed by their supply.

Releasing its latest Report on Jobs, the Recruitment and Employment Confederation said member firms identified the roles as matching the two temporary IT skills which were in short supply.

For full-time roles, MI analysts, IT security staff, Business Analysts and Enterprise software staff were also hard to source, the agents said, as were candidates skilled in SAP – which was scare on a contractors basis in July.

Then, overall demand for contract IT skills was 55.5 – the lowest reading from the REC’s reports so far this year, continuing the downward spiral for IT contractors that began in April. In August it eased further, however, to 55.0. 

“[End-users] continue to take a cautious approach to hiring decisions amid an uncertain economic climate,” said Bernard Brown, partner and head of business services at report co-author KPMG.

“Whether this will persist as the summer holidays draw to a close is an open question. Much will depend on macro-economic factors and their effect on overall confidence, especially where permanent hiring decisions are concerned.”

He observed that, among end-users, “worryingly there seem to be early signs of trends similar to those in 2008,” in line with CUK disclosing the re-emergence of IT contractor hiring freezes, rate cuts and potential culls.

Seeming aware that cost-cutting initiatives have been redeployed, Mr Brown reflected: “Whether this is a blip or a return to a familiar and unwelcome pattern will emerge over the next few months.”