Contractor UK Market Report – Rates rise, just

With Wimbledon done and Ascot yet to come, IT contractors on the cusp of the summer season should (gently) feel a bit renewed in terms of confidence, despite the gloom emanating from many of the business press pages.

The average hourly rate for IT contractors, measured across the ten most commonly requested skills, has risen (just) from £30.23 to £30.84. While this may be unlikely to upgrade many holidays from Magaluf to Monaco, it does represent the first positive movement in two quarters. Rates reached a post credit-crunch high of £32.96 at the end of 2010’s third quarter, before falling sharply in quarter four, and continuing to stumble lower in the first three months of 2011.

The cautious mood of optimism suggested by our second quarter figures is reflected elsewhere in the industry. While retail and public sector jobs take something of a battering, there remains broader scope for hope. Employer confidence was shown to be gently improving throughout the quarter, according to numbers from the Recruitment and Employment Confederation (REC). The number of employers with headcount freezes fell to 20% (from 43% in late 2010) in May, and just last month, some 64% of employers were expecting to increase their permie workforce in the next quarter, with only 6% expecting to cut jobs over the coming year.

“This is the first real confirmation that employers are feeling more confident and are taking a long–term strategic view of their workforce planning,” REC’s research head Roger Tweedy said at the time, adding: “Employer confidence is at a 12 month high. The picture is one of cautious optimism.”

And of all fields, IT seems to be faring better than most. “It is incredibly hard to source certain [IT] skills from within the UK,” says Ann Swain, chief executive of APSCo. “Recruiters are reporting that it can take up to six months to fill a vacancy for an in-demand IT skill.”

Perhaps most encouraging is the fact that provincial Britain has recently seen a rise in IT jobs, as it tends to be London that leads the way out of tough times. APSCo figures show IT jobs in Scotland rising by 28%, Wales 22%, East Anglia 13%, and the South East 11%.

REC Technology figures covering April, May and June show demand for contractors up by 11% on the previous quarter, and the number of applicants per job actually diminished, which “confirms our view that the IT sector remains healthy and demand continues to grow,” according to Jeff Brooks, chair of REC Technology. “In several skill areas, we will continue to experience shortage of supply and this will put pressure on pay and contract rates,” he says.

The REC shows systems developers, architects, .NET and SQL Server being particularly tricky to recruit for, which is borne out by our own figures. Over Q2, .NET has risen to £32.50 per hour (up over 8% on the £30.00 of the same period last year), architects have gone to £480 per day (up 7% from the £450 of the same period in 2010), and those with SQL Server 2008 have gone to £29.50, up 11% on the £26.58 of 2010.

One other area showing good demand is VBA, according to figures from P&D Quant Recruitment, which specialises in recruitment of, among other things, developers of quantative analysis tools for banks. Their figures show that a quant developer with VBA typically earns 7% more than one with C++. Our own figures show a big 23% spike in rates for VBA contractors over the last year, to £24 per hour from £19.50.

And of continued value in banks are contractors with solid security skills. While one recruiter, Greythorn, recently noted an upturn of 20% in base salaries for (permie) banking heads of IT security (jumping £25,000 to £125,000 in the last year), the news for contractors is potentially even grander.

There are more than twice as many contractor roles requesting CISSP (certified information systems security professionals) as there were a year ago (129 compared to 62, from a sample of more than 100,000 adverts), and day rates of £400 are now the norm. 

Firewall contractors have seen a 20% boon in rates, from £20 to £24 in 12 months, and CCSE day rates have spiked 10%, from £340 to £375. It’s an area that is only likely to become more profitable as data security grows as a public concern, and banks have to battle with government and private institutions for the best people.

Of course all these clients are vulnerable to financial pressures and very recently cost concerns appear to be having more of an impact on recruitment activity. But all in all, and given the tumbleweed blowing across parts of the labour market, contractors working in IT shouldn’t have too much cause for complaint this summer, even if it does have to be beers in Magaluf rather than Mohitos in Monaco.

Matt Farquharson

Printer Friendly, PDF & Email

Sign up to our Weekly Newsletter

Keep up to date with everything in the world of contracting.

 

Contractor's Question

If you have a question about contracting please feel free to ask us!

Ask a question