IT contractor pay rates increase by 3.3%

Almost all major IT contractor skills are paying out more this year than they did in 2014, despite a slight softening in demand since then, a computer staffing firm has shown.

In fact, 14 of the 16 IT skills on Computer People’s contracts database show higher rates between this July and September than last, even though - overall - demand is down by 3.6%.

Contractors working in Senior IT Management are sitting on the highest annual premium – a double-digit increase of 12%, followed closely by Application Analysts on almost 9%.

Including these managers and analysts (whose demand is up by 61% and down by 14% respectively), the average annual rate rise across the IT contracts is an inflation-trouncing 3.3%.

Only software engineers and web developers are commanding less than they were a year ago, albeit by tiny percentages - 0.58% and 0.61% respectively.

In line with the dips, demand for these two IT skills on a contract basis has shrunk – majorly for developers (down by 21% year-on-year) and marginally for software engineers (less than 2%).

But the database shows that not all contract rates are following the laws of supply and demand. Openings for ERP contractors have plummeted steeply yet their rates are still 5% up on last July-September.

The plummeting in ERP contracts was so severe (24%) that it caused IT contractor demand as a whole to go into the red, explained Computer People’s operations director Richard Coe.

“Although difficult to pinpoint the reason for this decline [in ERP contracts], it’s likely that a number of large implementations came to an end at similar times,” he said.

Business Intelligence contracts, by contrast, have surged in volume by 35% this year, although a 9% drop between July and September 2015 suggests that the peak has now passed.

Freelance software testers are seeing similar growth in demand (contracts up 31%), and pocketed a 3.6% rise – the database’s average premium, yet demand is cooling for them too.

Coe cautioned: “While Q3 exceeded expectations, the circumstances surrounding this growth make it difficult to predict Q4 activity with any real confidence. But in a market of high demand and low supply, growth in both [rates] and [contracts] is likely.”

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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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