Growing IT contractor demand accelerated in February

Small but steady gains in demand for freelance IT skills which have taken the market to new heights consolidated in February, returning the biggest monthly uptick for IT contractors since before the fourth quarter of last year.

Unveiling its monthly Report on Jobs, the Recruitment & Employment Confederation scored IT contractor demand at 56.4 – up from both 54.8 in January and from the 2012 peak of 54.6 in December. In November it was 53.0, in October 52.4 and in September 52.1.

That positions demand for IT contractors to currently be stronger than last month and any month of 2012, including the same time a year ago when it stood at 53.0, indicating real-terms growth of more than three index points.

The REC’s findings, based on its agencies’ activity, offers an explanation: while February saw IT staff on a full-time basis also rise to an unparalleled level of demand (compared to other full-time jobs), numerous IT skills on a permanent basis are in short supply.

In fact, the recruiters struggled to find full-time candidates skilled in DBA, Java; .Net, SQL and Virtualisation. Despite the appetite being strong, there was also a shortage of direct candidates for digital project management, online marketing and web development.

Although not new, such a deficit of computer skills on a full-time basis has led to hirers resorting to the skills on a temporary basis instead, recruiters have said,  helping to inch up demand for contractors ever since September 2012.

The launch of new programmes requiring IT nous for short-term associated projects has exerted further upward pressure on demand for temporary IT workers – since November/December in earnest, and in February, their deployment continued.

“There’s noticeable demand for skilled staff to support infrastructure developments such as water and rail,” Tom Hadley, a director at the REC, said in the report.

“Competition for candidates intensified this month with private sector employers racing to secure the talent they need for growth, from a decreasing pool of skilled workers.

One non-IT specific sign of this race is that starting salaries for new openings increased to a 17-month high, as did pay for temporary/contract workers; albeit marginally and only when compared to January.

In the IT jobs market, the rates most likely to be holding up – or even increasing – should be those relating to ‘General IT’ work, and contracts for SQL and Development, as suitably-skilled freelance candidates emerged in short supply.

Of the February report, Mr Hadley reflected: “With the Chancellor’s Budget only weeks away and more investment in infrastructure expected, a growing concern will be whether or not the UK has the skilled staff needed to get these projects off the ground.”

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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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