IT contractor demand leaps as the economy reopens from covid-19

Coronavirus lockdown officially lifting in July has helped propel IT contractor demand to its strongest level for five months, despite it still being in ‘the red.’

Published yesterday, an index from the REC scores demand for tech skills on a temporary basis at 40.2, up from 29.3 in June and representing the highest reading since February (49.3).

Asked why IT contractor demand has firmed up so quickly, a Recruitment & Employment Confederation spokesman said it wasn’t just freelancers in IT whose prospects had improved.

'Re-opening'

“Demand for permanent IT staff is recovering at around the same rate as for temporary staff,” the confederation’s spokesman said, reflecting on the REC’s July ‘Report on Jobs.’

“As for the reasons why,” he added to ContractorUK, “[contract IT] recruiters noted that it was mainly due to the gradual easing of lockdown, and re-opening of the economy.”

On Friday, prime minister Boris Johnson ordered a halt to the lifting of lockdown, saying new relaxations that were going to be introduced would be delayed due to covid-19 flare-ups.

'Work from home' order over

Perhaps aware that the engine behind demand for IT workers reviving has been stalled, the REC spokesman did not reply to the question of whether their recovery would now continue.

Since August 1st however, employers have been allowed to reopen offices, end the government’s ‘work from home’ order and bring back furloughed workers.

But only half of workers have reportedly heeded the government’s call to return to work, despite the backing of Budget 2020, which was full of measures to restart the economy as the pandemic eases.

'Labour market problems'

The REC’s data covers only the four weeks of July, yet its CEO says bringing staff back from furlough is among the “problems” for the labour market which agencies and hirers now face.

“The pace of decline has slowed hugely”, adds Neil Carberry in the July report. “[But] there are far fewer vacancies in the market than before March, and more people looking for jobs.”

Extra eyeballs per job vacancy or contract opportunity has not gone unnoticed by candidates, according to new research from Indeed.com.

“Occupational switching is on the rise with job-seekers casting a wider net as a result of covid-19 [impacts],” the job site said in an online post yesterday.

“[This has] triggered the biggest change in quantity and mix of available jobs in years.”

'Candidates shifting their searches'

In line with the analysis, the site’s economist Jack Kennedy says that “people [looking for work] are shifting their searches towards sectors they believe offer more opportunities.”

The site’s stats are a case in point. For example, Software Development saw a 0.5% annual uptick in postings for software developers in June, mirrored by 0.3% uptick in clicks for such jobs.

It comes after Hays identified Software Development as enjoying a demand-surge thanks to covid-19. And its bedfellow, Software Engineering is on the ‘scarce’ list of REC agents.  

'Short supply'

Also causing permanent recruiters headaches in July due to being in "short supply" were Software generalists, Database Developers, Data Scientists and Developers.

These four were in addition to a scarcity of candidates for full-time positions requiring Analysis; C#, CNC, Technology/IT and Technical Sales.

Among contractors, the skills shortages in July were less abundant but in similar areas; specifically C#; Data Science; Development and IT/Technology.

'Hiring plans remaining on ice'

James Stewart, vice-chair of KPMG said: “With the softest rates of decline seen for five months, it’s encouraging to see the downturn in recruitment easing as parts of the economy reopen.

“However, we are still a long way from being out of the woods, with hiring plans remaining on ice and the uncertain outlook still weighing heavily on business’ recruitment decisions.”

“We’re not in the clear yet,” echoed REC's chief executive Mr Carberry, in a viewpoint article aimed at agencies. “The recovery will be slow…[as] clients will be experimenting with new ways of working.

“We can help them change, and develop ourselves in doing so. To thrive, not just survive, we should work from the question of how we solve a client’s business problem – not only fill the next job.”

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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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