IT contractor pay wars continue, despite growth in demand dipping

The UK jobs market continued in January “where it left off” in December, a new report says, except for IT contractors -- for whom growth in demand slipped slightly.

Yet the easing in the still-increasing appetite for temporary IT skills (from 66.2 to 65.9), was so small that it failed to pause the pay war for talent, adds Report on Jobs.

“With competition for staff still hot, companies are having to raise pay rates for new starters to attract the best people,” says Neil Carberry, CEO of the REC, which publishes the report.

“And the cost of living crisis means there is also more pressure from job-seekers who want a pay rise. But [from an employer’s perspective] pay is not the only important factor.”

'Include salary range'

From a candidate’s perspective, pay is difficult to top however, as a project manager signalled online.

“Dear Recruiters, Please do not contact me asking if I’m interested in the role and give me the full job description but not include a salary range”, the PM posted to LinkedIn.

Signing off his open letter to agencies with a traditional ‘P.S,’ the candidate added: “And please don’t ghost me when I ask for salary range.

“You sent me what you want me to know about the job, send me what I want to know about the job. It’s a two-way street.”

'How much more stretch on wage competition can there be?'

Kate Shoesmith, the REC’s deputy CEO believes money-motivated candidates need to get in quick -- while the market still remains in their favour.

“The live question for us all in a market like this is -- how much more stretch can there be to keep competing on wages?”

But then, in a follow-up to her own question, Ms Shoesmith suggested contractors might be able to stretch out pay more than permies, if they are a bonafide business.

“Compare our Report on Job findings with the British Chambers of Commerce (BCC) survey…[showing] three-quarters of business feel they will have no choice but to put up prices.”

'Doing right by people'

She added: “For [employers though], there is the challenge of doing right by your people at a time when many are facing a cost of living crisis, [so this means] giving a fair deal to everyone -- not just new starters.”

And 'everyone' includes workplace returnees. Indeed, an agent last week detailed the emotional journey of a 55-year-old man trying to find a job, nearly destitute, partly due to an extended period of illness.

“He cried….[on the phone because] due to the employment gap [on his CV], none of the companies were willing to offer him,” began the ‘talent acquisition’ agent.

“But he really needed money to feed his family at least one meal a day. I looked into his profile and he seemed technically strong, I discussed this with my technical manager and scheduled his interview. You know what? He cracked it! He got the job!”

'Wrong to raise National Insurance right now'

The need from candidates for cash amid imminent, hefty rises to utility bills, and the need for businesses to put up prices amid what the BCC describe as a “variety of costs,” makes Mr Carberry believe an increase in National Insurance could hardly loom at a worse time.

“Government's role is to manage inflation, but also to ensure that they do not discourage investment - that is what will drive the economy to grow through this year.

“[So] now is the wrong time to be raising National Insurance, the biggest business tax,” he said.

'Competing pressures'

Also writing in Report on Jobs, KPMG’s head of education, skills and productivity Claire Warnes suggested there may be some organic financial uplift for candidates from the high levels of demand.

“The New Year has seen the jobs market continuing where it left off, with a steep climb in permanent and temporary hiring [and] a sustained decline in the number of suitable candidates has pushed starting salaries up -- for yet another month.”

She continued: “It will be important to monitor how these dynamic features of the job market respond to the competing pressures being felt by both businesses and candidates…[especially as] some sectors are continuing to show the strain of high demand for permanent and temporary roles. In particular, the IT and Computing [sector].”

'Short supply'

In the IT sector in January, contractor recruitment agencies reported a "short supply" of CNC, Data, Development, Digital, IT, Software, Engineering and Technology skills for freelance opportunities.

Permanent staff agencies with Recruitment & Employment Confederation (REC) membership also reported a lack of applicants in the same seven areas, alongside a dearth of candidates for full-time positions requiring CAD and Technical Sales.

But regardless of skills, an internal hiring manager in the facilities sector says women in particular must ask for more when going forward.

'Women ought to ask for more'

“I’ve been reviewing CVs for the last few days and on face value I can see a distinct difference in the asking salary between men and women with comparable experience,” the manager posted in the month covered by the REC data.

“Women -- raise your prices. You don’t lose anything by asking for more. You can find out what your role is valued at -- not worth we confuse the too -- without asking people for their salary or sharing yours. But also do that too. Do your research. Ask for more.”

Profile picture for user Simon Moore

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.
Printer Friendly, PDF & Email

Sign up to our Weekly Newsletter

Keep up to date with everything in the world of contracting.

 

Contractor's Question

If you have a question about contracting please feel free to ask us!

Ask a question