Smaller UK recruiters see the same ‘strong’ IT contractor demand as SThree

Any of the lumpiness in demand for IT contractors in the UK in August is yet to show up at SThree.

The international staffing agency which has nearly 80% of its placements dedicated to contractors, said its order book for such contract professionals grew annually by 24% in July-September.

'Strong demand'

Charlie Cox, the agency’s commercial director says the order book being so much fatter in Q3 2022 “validates” his belief that “strong” demand for skilled contractors continues apace.

In its tech division, which grew by 30%, SThree pointed to the gains being led by IT leadership and strategy roles, software developers, software engineers and testers.

And both that growth and those roles relate specifically to the UK, which represents the agency’s fourth biggest market, after Germany, the US and the Netherlands.

'Intense competition'

But speaking exclusively to ContractorUK, other recruitment agencies focussed solely on the UK contractor market confirmed the buoyancy for IT contractors.

“Over the last few months, we have seen a further increased demand for temporary and contingent technology talent”, said Lorien Global’s director of solutions Darren Topping.

“This [acceleration beyond that of permanent IT hires] is in part being driven by a shortage in tech talent, and securing…[it] without intense competition…is still extremely challenging.”

'Multiple options to choose from as an IT contractor'

Robert Bowyer, director of Venn Group said: “Demand for IT contractors is high at the moment both in the private and public sector, though we are seeing significant demand in education and healthcare.”

In a statement, Mr Bowyer continued to ContractorUK: “And with demand for their expertise increasing, they often get multiple options to choose from, which means that an opportunity that doesn’t allow for their chosen method of working [like remotely], will often be passed up.

“We’ve not seen employers adjusting their perspective fully to suit the skill-short market and with demand for these professionals outstripping supply, contractors will continue to hold the cards for some time to come.”

'SME clients between a rock and a hard place'

According to staffing firm Volt UK, the most sought-after IT contractors are currently skilled in Data and Analytics, Cyber Security, and Software Development.

“Small to medium-sized enterprises are often between a rock and a hard place whereby they cannot…[find] the right talent on a permanent basis”, reflected Volt regional director Adam Wooldridge.

“[But] nor can they afford the additional costs of inside IR35 arrangements. The result? It’s often a compromise on skills or experience which can have a knock-on effect to the delivery of projects.”

'Many contractors seeking permie-style benefits and opportunities'

Engagers aren’t alone in having to compromise.

In fact, Lorien Global backed an analysis earlier this month indicating that more contractors are going for employee-style assignments, potentially because they cannot land the outside IR35 contract that they ideally want.

And having sampled some of the perks of joining the payroll, there is a sense that some contractors like what they tried, and so are now pushing for the best of both ways of working.

“The sentiment of contingent workers themselves is interesting in the current market, with many seeking the same benefits and opportunities that are traditionally expected in the domain of permanent roles.”


Offering examples, Lorien’s Mr Topping added: “[So think] positive working culture; colleagues they enjoy working with, flexible working and learning/development”.

Yesterday, Volt confirmed that the increased costs of inside IR35 assignments does mean that "many smaller firms which are not well-funded struggle" with the engagement model.

As a result, it is mainly large corporates, financial services organisations, and private equity-backed companies that are “driving” demand for IT contractors, said the firm’s Mr Wooldridge.


But there is a bit of bumpiness and even occasionally a clash. “The work-from-anywhere culture is growing across the board,” said Venn Group’s Mr Bowyer, “[yet] there is some disparity still between the ‘wish-list’ of hiring teams and what contractors want.”

The Association of Professional Staffing Companies last month reported that in July 2022, contractor demand leapt by double-digits compared with before covid – in the shape of a 13 per cent spike for such temporary professionals.

Andy Hallet, managing director of Recspand and formerly a director of SThree reflected: “With a record skills shortage and firms worried about investing in permanent headcount pre-recession, I can only see this trend continuing.”

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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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