Hirers told IT talent is dissatisfied about pay

A staffing body’s forecast that IT contractor demand would keep growing was met in every month of 2015’s first quarter, albeit by less of a margin than some agents expected.

In fact, the Recruitment & Employment Confederation scores IT contractor demand at 61.7, well over its 50.0 mark for monthly growth, and in line with its prediction to ContractorUK.

But the current reading is numerically lower than it was a year ago (63.8), and lower than where a top IT contractor jobs agency anticipated in December 2014 that it might be by now.

Specifically, at a time when IT contractor demand stood at 63.3 index points, the agency said that by early 2015, there ‘could be even higher growth than there is currently.’

Nonetheless, the REC says demand for IT contractors grew last month, and in each of the two previous months, though these also show lower index scores than at the same time last year.  

However, now there is a “tightening labour market” that is “forcing up” pay inflation as “businesses bid for the best talent,” as they did in February to attract (not retain) workers.

“Such a trend could cause a two-tier pay market,” adds Bernard Brown of KPMG, warning of a “divide” between highly paid new starters and current workers on subdued pay rises.

He reflected: “This dynamic will cause businesses problems in the long term, as they struggle to keep hold of talented staff increasingly dissatisfied by their remuneration packages.”

In the IT contracts market, such dissatisfaction is most likely felt by techies at BP and Shell, as each oil giant has cut pay rates for IT contractors who don’t wish to be out of work.

Yet in the REC report, chief executive Kevin Green warns hirers they “need to realise” that their unhappy workers are “deciding to change jobs, because they can earn more” elsewhere.

IT contractors with Business Analysis; Development, Java, .Net, Sharepoint and SQL seem the best-placed to make this decision, as these six IT skills are sought-after on a temporary basis.

And the pay prospects for such IT workers are even healthier, because the same six skills are also scarce on a full-time basis, the REC report says, as are C#, Helpdesk and Web.

“Increases in starting…[pay] offers are being driven by skills and talent shortages”, said Mr Green, who counted almost a third of agents as reporting fatter pay packets for new candidates. He added: “Businesses are going to have to think hard about retaining scarce resource.”