Demand for IT contractors verged on falling flat in November 2022
Demand for IT contractors came a hair’s breadth away from falling flat in November 2022 -- at just 50.3, its lowest index score for two years.
The REC, which keeps the index, had to reissue the sort of alerts it sent a month ago, saying ‘business/candidate caution is increasing’ but like October, “this is not yet a major slowdown.”
The reassurance by the staffing body follows IT contractor demand falling in November 2022 for the sixth month in a row, to a level not seen since the first winter of covid.
Neil Carberry, of the Recruitment & Employment Confederation (REC) says it is “really important to remember that all this is happening from a historically high base”.
Moreover, given that it stood last month at 50.3, IT contractor demand still grew, albeit only just -- because the market becomes “flat” at 50.0, Carberry cautioned in a post.
Not since November 2020 following the coronavirus outbreak has the market for IT contractors registered a lower score (when it was 49.7).
'Could be IR35'
While seasonality was and is partly to blame, the same sort of contraction that hit the tech market two years ago is currently affecting full-time techies.
“The survey shows vacancies [overall] are still growing -- 54.1 -- with permanent IT roles the only sector showing a small drop,” Mr Carberry, the REC’s CEO said on Thursday.
He reasoned: “Could be IR35. Could be [Silicon] Valley sneezing and the sector globally catching a little cold.”
'Contractors can't filter out non-outside IR35 roles on main job sites'
A freelance technical architect, Tim Holmes, confirmed that IR35-related frustrations typically face technology candidates who try to find work online.
“My pet peeve?” he wrote. “Many job sites like LinkedIn, JobServe, Reed [and others], still don't provide a simple search option to filter out non-outside IR35 roles.”
But in one specific pocket of IT contracting, IR35 status in November was -- for once -- lower down the list of priorities, according to Dr Nick Fine.
“In UR contracting, there is exceptionally high demand”, he says “to the point it’s actually nudging rates back upwards towards pre-pandemic, pre-IR35 levels, [even on] inside IR35 [roles].”
'Flexibility just as important as pay'
Writing in the REC’s Report on Jobs, KPMG partner Claire Warnes said money might actually be starting to matter less across the board.
“Employers who are able to offer existing workers and candidates opportunities to upskill and reskill, rather than focusing solely on core pay, may well benefit most in this tight jobs market.”
The REC’s deputy chief executive Kate Shoesmith agrees.
“The majority of recruiters I speak with are taking a pragmatic approach to overcoming shortages.
“Supporting clients in creating the right working conditions and flexible work are just as important as pay to candidates in this market,” Ms Shoesmith told ContractorUK.
But candidates face “longer decision-making timelines,” according to Mr Carberry, and the likely cause is economic, not seasonal – as much as seasonality is clearly behind some of November’s subduedness.
“The market always cools down in the run-up to Christmas,” confirms veteran financial services recruitment agent Natalie Bowers.
Boss at Bowers Partnership, she continued to ContractorUK: “A lot of firms operate the dreaded furlough in December too. I’m not aware of any official hiring freezes [in the investment management sector], but we would always expect volumes to be extremely low in December. And as for rate cuts [for contractors] – no – it’s quite the opposite.”
Similar pay premiums were likely offered in November for IT contractors skilled in Cyber Security, Development, Software, Software Engineering, and Digital/IT/Technology, signals the REC, as these seven were scarce on a contract basis.
Applicants for tech positions requiring Cyber Security; Development, Software, Software Engineering and Digital/IT/Technology were also scarce on a full-time basis.
November 2022 further saw a “short supply” of full-time candidates for Automation, Testing, CAD, Data Engineering, Infrastructure, Analysis, Technical Sales and Web positions, REC member companies said.
Additional ‘hot’ computer skills now that the UK’s cold snap has arrived will be disclosed this week by Adrian Smith, senior director of operations at Randstad UK, exclusively on ContractorUK.