Growing IT contractor jobs market ‘lost a little fizz’ in December

Organisations got their fill of IT contractors in November, rather than December, the shorter, last, festive month of the year.

Such is the subtext of the REC’s new Report on Jobs, which shows IT contractor demand still grew ‘remarkably’ strongly in December, at 66.1, albeit versus 67.2 in November.

So although growth in demand for IT contractors cooled last month, the cooling was marginal and pitted against a stellar ‘rebound’ month, initially scored as highly as 79.0.

'Lost a little fiz'

“The market rocketed to near historic levels as New Year approached,” KPMG said in the report -- of the labour market overall, but befitting the IT contractor market too as it added:

“That’s despite it losing a little fizz [in December], with the pace of accelerating demand for staff, wage and salary growth and vacancies all easing slightly.”

Nonetheless, technology as a whole (not just for contractors) was one of four industries where the “highest demand” of last month was seen, said REC’s Neil Carberry.

'Getting to grips with IR35 reform'

Confirming the bustle among professionals who work on a temporary basis, is Dominic Johns, head of business development at Qdos Contractor.

“Demand for contractors is high; businesses are getting to grips with IR35 reform and the economy is open and firms are regaining confidence,” he posted yesterday.

“This means it’s shaping up to be a busy start to the year for contractors. [And for] agencies, accountancy practices and the firms that place, advise and engage them [too].”

'Short-term cover'

Less positively for engagers, ‘the availability of workers is testing their resolve’ according to Claire Warnes, head of education, skills and productivity at KMPG.  

As to the effects of the availability issues, they “will likely cause distortion in in recruitment patterns as business shift focus from long-term growth to short-term cover.”  

Although that wording from KPMG represents a sort of warning to engagers, and agencies, the pendulum swinging to ‘short-term cover’ will likely boost contractors.

'Thinking hard'

However, in five areas of the technology market, agencies are already battling shortages of contractors skilled in Development, Software, Software Engineering and Technology/IT.

The REC report adds that all five were in “short supply” on a permanent basis last month too, alongside BI; C#, Data, CAD, Digital, Social Media and Technical Sales.

Mr Carberry, the REC’s chief executive advised: “Businesses need to make sure they are reacting to the long-term challenges of this market, thinking harder about their offer to staff and how to shape their future workforce.”

'Work-life balance'

Tom Wallace, tax director at WTT Consulting echoed: “Potential employees are looking for packages that not only offer sufficient cash remuneration, but also support their work-life balance.

“In that respect,” he continued in a post, addressing engagers, “it is worth looking at the total package that you are offering in terms of the benefits you also provide. Rather usefully, there are a number of tax exempt benefits when considering this.”

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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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