A year of IT contractor pay: 2012 in review

This year, to obtain a better vantage on emerging trends that will shape 2013 for the IT industry, we sharpened our focus on IT job titles and newly filled contract assignments, writes John Martin, chief executive of international markets for IQNavigator, a software and services firm specialising in the contingent labour market.

The resulting view of the current ‘spot market’ for IT talent hints at themes that will likely play out in 2013. While necessarily speculative, this approach suggests several stories emerging from market activity.

New Initiative Leadership

Among the few roles showing upward rate pressure in the latter half of 2012 are many that drive new IT investments: Technical Analyst, Program Manager, and Project Coordinator.  IT Project Manager assignments experienced the highest rate increases with up to £4.73 per hour. This suggests that as the economy emerges from recession, firms are adding staff to define and lead deferred improvements in infrastructure and applications. However, this trend should not be overstated; the upward pressure seen so far is modest.

Data Analysts

Although rates for most IT titles were down in 2012, roles requiring skills and experience in aggregating, summarising and presenting large bodies of data are commanding higher rates.  Data Analysts saw an average increase of 6 per cent while new assignments filled in the past six months for jobs with these skills have typically commanded higher hourly rates than in preceding months.

Developers

Software Developers are the most frequently employed temporary workers appearing in the IQNdex. Web Developers are also high on the list. For both roles, in nine of the past 12 months, median rates for new hires have been below the median rate for existing assignments. This downward trend has been less pronounced in the second half of the year, but there is no evidence suggesting a near term reversal of direction in rates.

Specialised Technical Consultants

Hourly rates for high-end technical consultants were trending upward in early 2012, but in four of the past six months the median rate for new engagements has been downward compared with prevailing rates for active assignments. The fluctuations up and down are small, with the month-to-month median rate changes of less than £10.

Help Desk and Software Testing/QA

Two roles that have exhibited marked downward movement, particularly on a percentage basis, are Help Desk staff and Software Testers. Possible explanations include competition from outsourced/offshore alternatives or a lower level of business activity and investment leading to decreased demand for these skills.

So what does 2013 hold for IT contractor pay?

Hourly bill rates for the most frequently filled IT contractor roles have declined modestly in 2012. In fact, the median hourly rate for all IT titles has dipped from a high of £59.25 in May to £54.58 in November. There have been only a handful of IT contractor roles to command inflation-busting pay increases.

Given the slow pace of economic recovery and the continuing high levels of unemployment, it is unlikely that 2013 will witness a surge in revenue for either contractors or their recruitment agencies. There are always exceptions, of course, particularly for select high-demand roles, but on the whole, changes in temporary labour rates will remain constrained until business feels secure enough in the recovery to resume significant investment.

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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