IT contractor demand fell in May 2023 to a 32-month low

Demand for IT contractors stopped growing in May 2023 -- for the first time in almost three years, as “economic concerns” made even such temporary hires a hire too many.

Describing the appetite for candidates overall as “subdued,” the Recruitment & Employment Confederation said IT was one of the “weakest” sectors, with its contractors now at 47.7.

That represents the lowest IT contractor demand since September 2020, reflecting “dampened hiring activity,” a “tough time for employers” and ‘businesses delaying hiring decisions.’

'Outlook remains unclear'

The REC’s Report on Jobs adds: “Construction, IT and retail are all weakening. [But] the story can vary widely across different businesses as their economic outlook remains unclear.”

Software development is also still in the relative doldrums, according to a May update from job site

In fact, in terms of new opportunities, software development ranks in the middle of six “weakest performers”.

“[Despite] still showing resilience, the UK labour market continues to rebalance in the face of slowing labour demand”, said Indeed economist Jack Kennedy.

Job-seekers were “less confident” in May in their ability to quickly find a new job, he added, due to postings declining overall, but nowhere more so than in the ‘weakest performer sectors.’

'Potential sector-change required for new job-searchers'

Neil Carberry, chief executive of the REC, said the upside for employers is a growing pool of candidates to pick from.

But he too advised individuals seeking a new opportunity.

“Candidates may have to change sectors in their job search, so there is not an automatic increase in candidate supply for shortage roles.”

In May, shortages of permanent staff hit positions requiring Automation Testing,
Development, Software, Software Engineering and Technology/IT.

Member companies of the REC also reported a shortage of contractors skilled in Data Engineering, Development, Digital, Software, Software Engineering, Technology/IT.

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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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