IT contractor demand surpasses 25-month high

Predictions last month to ContractorUK that demand for IT contractors will continue to rise – ‘maybe even accelerate’ – appear to be ringing true, as July saw a temporary IT labour index surpass the 25-month high it achieved in June.

Unveiling its latest Report on Jobs yesterday, the Recruitment & Employment Confederation scored IT contractor demand at 59.6 – up on every single month of 2012 and 2013, including last month’s two-year peak of 57.3.

With real-terms annual growth of 8.4 index points (last July IT contractor demand stood at 51.2), the latest reading undermines a claim made in this year’s second quarter that the temporary IT labour market was “set to flatline.”

In fact, the market when gauged by the REC’s member recruitment agencies has notched up by 5.1 index points since the claim (- it was made at the time of the REC’s May report when demand was at 54.5), and is now more buoyant than any time since May 2011.

End-clients’ growing confidence in the economy, although once seen as a dampener to temporary workers’ prospects, is largely behind the historical upswing for IT contractors, as hirers are “beginning to invest” in talent, having conserved cash for a number of years.

“With house price and service sector figures moving in an upward direction, indications are that the economy is getting stronger,” added Bernard Brown, head of business services at KMPG, which co-authors the REC report.

“For some time staff have sat tight refusing to move when job security was low. Now the best staff will be looking for better offers so employers will need to strike a balance between recruiting new blood and retaining their best”.

In the computer labour market, hirers and their staffing agents are looking hardest for IT contractors skilled in Business analysis, C#, FM, Java, Linux, Mobile app, .Net, PHP, SQL, and VM.

The REC’s list of scarce IT skills extends to permanent candidates too, where there are shortages of full-time Business analysts, Developers, Digital marketers, Software engineers and Web developers, among other candidates, including those for Java, PHP and C# posts.

Ominously for hirers, the availability of both permanent and temporary workers dipped in July though, in terms of demand, the latter group were said to have received a boost from the “good weather” and the public sector - where the appetite for contractors rose at its fastest rate so for this year.

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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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