IT contractor demand jumped in August to its highest level since April

Demand for IT contractors increased in August 2023 for the four month in a row -- to its highest level since April.

The Recruitment & Employment Confederation (REC) scored IT contractor demand last month at 51.9, compared with 50.1 in July; 48.6 in June, 47.6 in May and 53.3 in April.

Any score over 50.0 indicates monthly growth, the REC says, indicating that while the market for temporary IT skills has only been out of ‘the red’ for two months, its rate of growth has steadily increased for four.

‘Squeezed budgets’

This consolidation for the IT contractor jobs market goes against the overall temporary market in August, when billings “slipped for the first time since July 2020.”

In the REC’s Report on Jobs, KMPG’s Claire Warnes continued: “Squeezed budgets [and an economic outlook keeping businesses cautious] mean there’s little room to bring on short-term staff.”

But later in the report, and in line with August data for the technology sector, Warnes acknowledged that “certain sectors...are bucking this trend.”

‘IT sector needs temporary workers to support more projects’

“As the appetite for tech and AI expertise keeps increasing, the IT sector needs temporary workers to support more projects,” she said.

According to Report on Jobs, AI development was one of 18 technology skills in short supply in August, in the permanent market.

Artificial Intelligence Developers were not “in short supply” in the IT contractor market however, but general Developers were.

‘Infrastructure and data engineering contractors in short supply’

REC member agencies, whose feedback informs the list of scarce skills, identified “IT Infrastructure” and “Data Engineers” as candidates uniquely scarce in the contractor market.

The contractor market was also short in August of general IT and Technology candidates -- but so too was the permanent market, which was also shy of Cloud Engineers, Cyber and BI.

The remaining skills which were similarly hard for the confederation’s full-time tech staff agencies to source in August were Analysts, Developers; Data Professionals, Skilled E-Commerce, Software Architects, Software Engineers, Technical Sales, Technical Support as well as applicants skilled in Social Media and CAD.

‘Tech jobs market remains favourable to those looking for a new role’

For IT contractors considering moving into any of the 18 skills (overall) which the permanent market is lacking, the conditions are good.

“If you’re looking for a new role -- the market remains in your favour,” said Warnes, KPMG’s skills and productivity partner.

“Starting pay continues to be driven up by inflationary pressures and a high demand for candidates with specific skills across many sectors.”

‘Rising pay drivers’

REC’s chief executive Neil Carberry cautioned that the “drivers” for rising pay are “more to do with companies’ pay settlements for existing staff, rather than market demand.”

Put another way, individuals who found new jobs in August 2023 are “benefitting from rises that many firms put in place for their teams earlier in the year,” he said.

“This is a market where employers are recruiting -- but not at the levels they once were,” says the REC’s deputy CEO Kate Shoesmith, also similarly alluding to 2023’s peaks for IT contractors like April, and January (55.0).

‘Flat economic outlook’

Shoesmith added: “The challenge in this [current] market is how to navigate the uncertainty caused by the flat economic outlook.

“Both individuals and businesses find it difficult to know which move to make next. [And] we're lacking the guiding vision for the future.”

With Autumn Statement 2023 clearly on his mind, too, is the REC’s Mr Carberry.

“A focus on effective skills reform will be vital to addressing shortages overall in all the shortage-sectors,” he said.

‘Temporary staff keeping NHS going’

Carberry was speaking after the August jobs report showed demand for permanent healthcare staff rose for the 37 month in a row.

He said temporary staff were “keeping employers going” in the healthcare sector, including in the NHS, where “agencies have been unfairly blamed for failures of training and procurement practice from NHS England.”

Matt Collingwood, boss of IT recruitment company VIQU says recruiters are culpable -- although on different grounds.

‘Ghosting and no-show interviews -- by agencies’

“In my 26 years of navigating the recruitment industry, I've found that the most unreliable candidates are often recruitment consultants themselves,” he began last week.

“The number of instances where recruiters who let themselves down truly amazes me. Ghosting, no-shows for interviews, and last-minute ‘changes of plan’ have become all too common.”

Likewise taking to LinkedIn about interviews in August was technology, digital and change recruitment director Tom Delaney.

‘£50 voucher for attending panel interview’

“[Believe your organisation is] standing out in the race to securing top talent?” asked the co-founder of Delaney and Bourton, addressing end-users.

“[Well,] check this out, which I pinched from [a research services firm’s] job advert. ‘Panel Interview: We'll hold a panel interview that evaluates skills required for the role. You'll meet with more of our team and may be asked to complete a presentation or task. You'll be compensated with a £50 voucher for completing the task because we know your time is valuable!’”

Delaney suggested candidates would hope such a “great initiative,” or just the underlying principle of being paid to attend interviews, becomes “the norm in the future.”

Profile picture for user Simon Moore

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.
Printer Friendly, PDF & Email

Contractor's Question

If you have a question about contracting please feel free to ask us!

Ask a question

Sign up to our newsletter

Receive weekly contractor news, advice and updates.

Every sign up will be entered into a draw to WIN £100 Amazon Vouchers.

* indicates required