Growth in IT contractor demand up for the fourth month in a row

Growth in demand for IT contractors notched up in March 2022 for the fourth month in a row.

The sure sign organisations got their fill of temporary tech skills in the first quarter -- as they likely moved to staff-up covid recovery projects, is contained in the new Report on Jobs.

But activities by employers noted in the report, such as “all staff” apparently being given pay bumps due to “rising prices”, could potentially curtail the still-rising demand for IT freelancers.

'5.4% dip in software development placements'

Similarly, an index released before the report by the REC, albeit for the same period, shows strong demand for software developers has now fallen back from a peak in early March.

In particular, as of April 1st 2022, counted software development postings to have decreased by 5.4% compared with March 1st 2022.

But the index covers both contract and full-time postings, meaning the dip in opportunities for software developers in the mid-to-latter part of March was not specific to contractors.  

'Covid's return pushing up temp demand, and rates'

The REC, which records contractor-demand across all tech areas as being up for the fourth consecutive month, has a potential explanation.

“[High] covid infection levels are…pushing up demand for temporary workers”, the Recruitment & Employment Confederation’s CEO Neil Carberry said last week.

Writing in Report on Jobs, Mr Carberry added: “[This is] underpinning the ability of temps to seek higher rates.”

'Continue to struggle'

According to the confederation, demand for IT contractors in March 2022 hit 67.8, up from a seasonally-adjusted 67.0 in February; 66.3 in January and 66.1 in December.

And with the REC saying any 50.0+ score indicates growth on the prior month, even the last time the index was higher -- October 2021 (68.3), belies the gains in IT contractor demand since then.

“There are many great opportunities for job-seekers to join or rejoin the workforce,” said KPMG’s head of education, skills and productivity Claire Warnes.

“With fewer EU workers, the ongoing effects of the pandemic, the economic impacts of the war in Ukraine, and cost of living pressures, many employers will continue to struggle to hire the talent and access the skills they need.”

'Short supply'

Needed most in the technology sector are candidates skilled in Development, IT, Technology, and Digital, as these four were in “short supply” in March across both contract and perm.

There were also shortages of data professionals as the volume of data jobs continues to grow, added the REC’s agencies, as well as too few applicants for Technical Sales, Software, CAD, and C# positions.

Among the confederation’s contract recruitment agencies, the tech skills shortage was confined to two areas -- Software Engineering and Java.

'Starting to stabilise'

“There are simply not enough candidates in all sectors to fill [the corresponding number of opportunities],” said KPMG’s Ms Warnes.

“The jobs market is very tight,” the REC’s Mr Carberry echoed. “Businesses will need to broaden their searches and be creative in making their offer to candidates more attractive. However, the overall number of placements being made is starting to stabilise.”

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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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