IT contractor demand returns to growth, thanks to hirers ‘leaning on temps’

The UK’s IT contractor jobs market grew in July 2023 for the first time since April, in a sign economic uncertainty is now making employers ‘lean on temps.’

Measured by the Recruitment & Employment Confederation, demand for IT/Computing skills on a temporary basis came in last month at 50.1, versus 48.6 in June and 47.6 in May.

While optimists might put the return of positive IT contractor demand down to employers’ insatiable appetite for tech skills, “IT in particular is weak”, cautions REC’s Neil Carberry.

'Leaning on temps'

He says the “main takeaway” of July was UK plc “leaning” on temporary workers, as the wider “economic picture” made many hirers too “cautious” to permanently add to headcount.

In the REC’s Report on Jobs, Claire Warnes of KMPG echoes: “Recruiters told us that their clients aren’t yet confident enough in the economic outlook to commit to permanent hires.”

KMPG’s skills and productivity partner, Warnes says the reticence to take on new employees in July led to the “steepest pace of decline” in full-time placements since June 2020.


But the REC spoke of another factor contributing to “uncertainty” which dampened the permanent market even further.

Yet the factor may also be behind demand for freelance techies now moving out of the red and into ‘the black’ -- last seen in April 2023, albeit then at a more solid reading of 53.3 (anything above 50.0 indicates monthly growth).

“The scale of companies reshaping themselves, while hiring in other areas [is significant],” explained Mr Carberry, the confederation’s CEO.

“Recruiters report that the quickest rise in labour-supply since… [December 2020] has been driven by an increase in redundancies.”


Agencies in London felt the candidate availability surge the most, which was “driven” by redundancies from firms "reshaping" themselves, so “hiring in some areas, [while] letting staff go in others,” he reiterated.

But on IT contractor hiring, REC agencies reported shortages of Automation Testers, Developers, Software Engineers, Data Professionals and Tech/IT candidates.

Full-time techies in “short supply” included Analysts; Cloud Engineers, Developers, Software Engineers, Technical Managers, Data Scientists, and Cyber Security officers.

'Hire for potential, not just skills'

The two long lists of scarce technologists coincides with one senior recruiter going online to encourage decision-makers to ‘hire for potential, not just skills.’

“A candidate’s prior experience may seem the most important consideration, but fierce competition and rapidly evolving ways of working are calling for more strategic hiring approaches,” said the agent, Harry Gooding, a director of Hays.

Taking to LinkedIn, he explained: “Proven experience can be a comforting safety net, but it doesn’t guarantee that a person will be suitable for a role – either today or in the future.

“[That’s why] organisations are recognising the need to hire more broadly, looking past certain CV shortcomings and hard-skill requirements, to secure professionals with other desirable attributes, from problem-solving to adaptability.”

'CV shortcomings'

Referring also to ‘CV shortcomings’ in July 2023 was VIQU recruiter Storm Robertson.

“If you are a job-seeker…increase your response rate… [by having] the area you live on your CV; your contact information not in a header or footer for ease of someone calling you, and make sure [your] skills are listed under the roles, so we know what you have done and can do.”

Robertson added: “These first three tips are a no-brainer [but then also] include ‘achievements’ that are yours. Make sure where possible they are quantifiable.

“[And finally be sure to] remove information you cannot discuss or skills you have never done. A lot of the time you can [spot over-embellishment of skills] as a recruiter, especially if you know your industry, and the players.”

'You have a problem'

But a post by Matthew Wohl of the Wohl Group indicates that shortcomings in July may not have been the preserve of candidates.

Taking aim at employers apparently not getting the basics right from the outset, Wohl, an aerospace and robotics recruiter vented: “If candidates are turning down [your] interviews, rejecting offers or not meeting with you in the first place, then you have a problem.  

“In the age of social media and Glassdoor reviews, you better be on your ‘A-game’ from start to finish. No one wants to work for a company that doesn't interview well, doesn't onboard after that, and doesn't have a safe work environment”.

'Proper UK industrial strategy long overdue'

The REC issued an appeal as well, but it was aimed not at employers -- but at chancellor Jeremy Hunt ahead of his still-unscheduled Autumn Statement 2023.

Mr Carberry said: “[Report on Jobs for July 2023] emphasises again that sustained positivity in our labour market rests on economic growth and investment in the UK. A proper industrial strategy that tackles the big issues we face, and which fully encompasses workforce thinking around skills, transport, access to work and immigration is long overdue.”

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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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