IT contractor billings hit 2012 peak in December

The IT contractor jobs market defied the traditionally quiet hiring period that runs up to Christmas by climbing in December to a higher level than any other month of 2012.

In its latest Report on Jobs, the Recruitment and Employment Confederation scored demand for temporary IT/Computing skills at 54.6 – up from both 53.0 in November and 51.5 in December 2011.

Taken with previous REC data, the latest score indicates that the three-and-a-bit working weeks leading up to January 1st  2013 was the most buoyant period of 2012 for IT contracts, even surpassing the flurry in August (53.9). In their report, the REC says any reading above 50 indicates growth.

Asked how a record number of IT freelancers won work in this year’s final weeks, the consensus of recruiters yesterday was that, amid some shortages of full-time IT personnel, hirers were keen to staff-up and not go without for a busy first quarter.

“December 2012 was the strongest year-end month we have seen for many years,” reflected Niall Cook, a director at IT jobs agency Computer People.

“As a result of a strong Q4 in which projects were started (often an indirect result of the Olympic summer), businesses were unable to wind down in the traditional manner in the final month of the year.

“With project deadlines looming before the end of the financial year in Q1, and the difficulties of recruiting permanent staff during the Christmas month, December showed a surprise spike in demand for contractors.”

Andy Bristow, director of Hays IT, agreed. He told ContractorUK: “The latest REC Report on Jobs reflects the pressure that skill shortages are placing on employers, and is encouraging news for IT contractors.

“While some organisations may prefer to recruit a permanent employee where possible, the shortage of specialists in key areas such as Java, .Net and Software as a Service may mean hiring a contractor becomes necessary.

“The employers we work with recognise that they will need to become more flexible in their requirements in order to recruit into one of these shortage areas, particularly at short notice. At the end of last year, and with projects being renewed, employers may have opted to taken on IT contractors in preparation for a busy 2013.”

In line with Hays IT, recently voted second best recruiter for IT contractors, the REC’s report lists seven skills as scarce on a permanent basis, including SaaS, Java and .Net but also extending to the Cloud, Business Analysis and Telecoms.

Among freelance candidates, there is a shortage of C# and .Net developers but, according to the REC’s December report, the economy appears to have been just as effective as skills shortages in steering clients toward such temporary hires.

Bernard Brown, partner at professional services firm KPMG, the report’s co-author said: “It seems that the time lag many economists spoke about towards the end of last year is shrinking, as employers delay [hiring] decisions until they have more certainty about the economy.”

The fragile economy tallies with what Michael Bennett, a director at ReThink Recruitment, thinks could be behind the historical upturn in IT contractor placements at such an atypical time of the year.

“We had a good month placing new contractors and saw a higher percentage of IT contract extensions than normal in December,” he said.

“It may be related to demand for permanent IT staff being depressed in Q4, so perhaps clients need the staff resources but are not hiring on permanent basis yet.”

But he too pointed to new or extended IT projects needing personnel in this first quarter, specifically among Rethink’s larger customers. Such major IT workloads needing sufficient IT bodies will play “a part” in the number of temporary IT placements soaring.   

Another factor behind the December high is the sheer desire of some clients to kick-off 2013 with the ‘crème de la crème’ in their IT ranks, believes Philip Fanthom, managing director of staffing firm Jenrick IT.

“We experienced a return to new clients approaching us to request assistance in acquiring top talent,” he said yesterday. “[Generally though in our] experience the drive for IT contract expertise has been largely driven by major business projects reaching critical points. Decision-makers have no option but to deliver or risk high opportunity costs.”

As to the short-term outlook for IT contractors, there is ground to suggest that the runaway hiring of temporary tech staff in December may be more than just a fortunate blip.

Computer People's Mr Cook explained: “The shortage of high-quality permanent candidates means that businesses are having to re-evaluate how they achieve their IT objectives and project milestones.

“There are no signs that this dynamic is going to change, and business pressures are almost certain to result in demand for contractors increasing during Q1 2013.”

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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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