Growth in IT contractor demand sinks to 21-month low

Growth in demand for IT contractors took a dip in October -- the month of the Budget.

Hiring body the REC, which measures the demand, does not say that feared IR35 reform in the Budget was behind the dip, but it is hard to regard it is as coincidental.

Particularly as it was an unprecedented dip, as according to the REC’s Report on Jobs, IT contractor demand scored just 58.3 last month, the lowest score since January 2017.

'Main thing'

The 21-month low in growth of demand may help explain the relief which the REC expressed when the Budget placed a delay on the reform, and said 1.5million end-users would be exempt.  

In fact, postponing IR35 reform in the private sector was “the main thing” it wanted from Budget 2018, says the Recruitment & Employment Confederation’s CEO Neil Carberry.

But the prospect of 2017’s IR35 reforms in the public sector being extended to the private sector has already thinned the field of IT contractors at agencies with membership to APSCo.

'Less attractive'

Last month, APSCo said a sharp 30% slump in the number of IT contractors on-assignment “can largely be attributed to recent changes, and further anticipated amendments, to IR35”.

Both the existing and proposed reforms to the legislation would have the effect of “making non-permanent employment a less attractive choice”, the group cautioned at the time.

The possibility that the Budget may have actioned the proposed reforms from as early as April 2019 has now hit the momentum in IT contractor hiring, the REC’s index figures suggest.

Skills scarcity on the up

Yet standing at 58.3 in the REC’s October Report on Jobs, the score in IT contractor demand means their opportunities still increased, given that any reading over 50.0 implies monthly growth.

Also growing is the pool of IT skills deemed scarce on a temporary basis, as October saw their total increase from nine to 13. So opportunities are growing, as is what’s sought-after.

The thirteen scarce IT contractor skills are; AWS, CAD, Data Analysis, DevOps, Digital, Games, Gaming, IT, Java, Media, PHP, Software Development, Technology.

A few of those skills are scarce for full-time openings too, alongside B2B Tech, Cloud Technologies, Consumer Tech, IT Security, Infrastructure Tech, QA and Web Development.

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