IT contractor demand edges up despite 'January lockdown effect'

Demand for IT contractors managed to keep growing throughout January 2021, despite the UK starting the new year on a national lockdown.

In fact, the “third” UK-wide shutdown of most workplaces due to covid, amid ‘rising infection rates,’ is cited by the REC in a section of Report on Jobs on the subdued growth.

The report shows that demand for IT skills on a contract basis, 50.4, still kept ‘in the black’ (the index has 50.0 as its growth threshold), versus a much more solid 55.2 in December.

'January lockdown effect'

“Not great, but massively better than might have been expected,” said REC’s chief executive Neil Carberry, posting online following the RoJ’s official release last week.

“The first indication of a January lockdown effect on the jobs market…[shows] labour demand is there…[but] uncertainty is high.”  

To explain the index, he characterised 50.0 as “flat” hiring activity – and the index shows that in January, appetite for IT contractors bettered that level by 0.4 of a single index point.

'Business confidence knocked'

“The latest national lockdown has knocked business confidence”, says James Stewart, vice-chair at KPMG which co-authors the report with the Recruitment & Employment Confederation (REC).

“There has been an uptick in short-term vacancies, but these are mainly in blue collar [sectors]…indicating that they [employers] are filling a temporary need for staff rather than pointing to long-term job opportunities.”  

Last month, a white-collar career coach asked corporate inquisitors to be kinder to shortlisted Zoom candidates, “particularly at the moment when interview opportunities are so scarce.”

'Starting-pay upturn on pause'

Furthermore, only five computer skills feature in the REC report as being on its contractor agencies’ scarce list -  Development, IT, Technology, Java and Software.

Except for Java, these skills are in “short supply” for full-time vacancies too, as are Agile Project Management, Analysis; Azure, BI, CAD, Cyber, Data Science, Digital, Python, Software Engineering and Technical Management.

But as to the prospect of premiums attached to such scarce skills, Mr Carberry suggested candidates should not expect too much, as “the upturn in starting pay has paused”.

“However there is cause for optimism,” argued KPMG’s Mr Stewart, “as businesses carefully monitor the vaccine rollout and look forward to the Budget next month. It gives the government the opportunity to further help the recovery in jobs and revive the UK’s productivity growth.”

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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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