Growth in IT contractor demand hit a new low in December

The contract IT labour market reverted in December to its traditional slowdown, in line with a forecast to ContractorUK, as growth in demand fell to its lowest point of 2014.     

In fact, the latest Report on Jobs scores IT contractor demand at 62.4, the smallest figure in the report’s series since September 2013 yet still well above 50.0, which indicates growth.

Nonetheless, the decline is in stark contrast to December 2013 and December 2012 which, in terms of demand for temporary IT personnel, were the strongest months of their respective years.

Those two Decembers saw clients ‘staff-up’ for projects booked for the then-upcoming New Years, but this December the growth in appetite for IT contractors - as well as permies - hit an annual low.

It is the latter group of IT candidates who have suffered a steeper slump in growth of demand, shows the report by the Recruitment and Employment Confederation. It was at the lofty heights of 70.4 in August; it’s now at 63.5.

Contractors, in contrast, were at 66.2 in September whereas they are now at 62.4. On an annual basis, such temporary workers are also better off.

In particular, Report on Jobs shows growth in demand for IT contractors has reduced by 3.1 index points since last year, compared with a reduction of 5.4 index points for permies.

Less positively for IT contractors, the report ranks them as fifth in the demand stakes for temporary staff as a whole, behind secretarial temps. In November, they were ranked first.  

And rather than driving the upturn in demand for skills on a freelance basis, as they were doing two months ago, IT contractors are now defying it, shows the December report.

Indeed, while growth in IT contractor demand sunk for the fourth month in a row, demand for temporary workers as a group grew at its fastest rate for three months.

Bernard Brown of KPMG, which co-authors the REC report, reflected: “A strong year for the UK jobs market finished with a flourish as temporary roles saw an upswing in popularity.

“More than one in three recruiters suggest that…[candidates] looking for short-term roles are being increasingly spoilt for choice, as organisations search for help in an effort to fulfil customer orders.”

The report confirms that “rising client workloads” was the primary reason in December why temporary staff recruiters were busy. But five types of IT contracts were hard for them to fulfil.

They are Business Intelligence, Java, .Net, Software and SQL, for which there was a shortage of suitably skilled contract candidates. The dearth of IT skills was even greater among permies.

Specifically, eight types of IT vacancy were hard to fill, including those requiring Business Analysis, Java, .Net, SAP, Security, Software and Web Development.

Mr Brown said: “A shortage of skills in key areas has led to a rise in the starting salaries on offer. It could mean that 2015 becomes the year in which the candidate finally becomes king.”

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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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