IT contractor jobs market sinks to four-year low in November

A further blow in prospects hit IT contractors in November, as their demand sunk below when the UK tentatively reopened from covid.

In fact, staffing body the Recruitment & Employment Confederation says IT contractor demand stands at 41.2, compared with 42.8 in October.

Despite being tiny, the monthly fall is the fourth in a row.

And it pushes demand for contract IT staff further away from the point of growth on the REC’s index (50.0).

‘Accelerated slowdown in hiring activity’

Standing at 41.2, the score represents not only the lowest reading of 2024 for IT contractors but also the lowest since June 2020 (29.9).

It means that the last time demand for technology skills on a temporary basis was lower was when the UK was in lockdown from covid.

The cause of November’s “accelerated slowdown in hiring activity” is October’s Autumn Budget “increasing employee costs,” says KPMG.

‘Sharp shock’

Co-author of the REC’s Report on Jobs, KPMG’s Jon Holt said hirers used November to “weigh up the prospect” of paying more for staff.

But the ‘weighing’ hurt recruitment, as the RoJ shows the total number of new job openings fell in November at the fastest pace in four years.

REC’s Kate Shoesmith blames the historic vacancy drop on employer NICs rising from April; the chancellor’s “sharp shock”, she said.

‘Tough budget for employers’

Neil Carberry, also of the Recruitment & Employment Confederation, agrees that the 1.2% rise in National Insurance caused the four-year low in new roles.   

But the REC’s CEO hinted the adverse effects could have been foreseen since October 30th; may not last, and could boost temps.

“It should [not] be a surprise…that firms took the time to re-assess hiring needs in November after a tough budget for employers,” Carberry began yesterday.

“[Our] panellists noted a lot of firms pausing processes…so this [reduction in new employment opportunities] may be temporary.

“A big test is whether those roles switch back on in January. [And] uncertainty [in the meantime] means turning to temp.”

‘Lower pace’

Carberry acknowledged the temp markets still “shrank” in November, yet “at a lower pace” than October and at “a far lower pace than perm.”

The IT contractor jobs market going beyond merely favouring clients (no growth in IT contractor demand has occurred since August 2023), by now consolidating their upper hand may explain some of November’s online posts.

‘Competitive salary’

Zing Learning’s Zoe Holland posted about a “competitive salary” role in London that, upon application, eventually revealed an annual salary of £26,000.

A coach to leaders seeking high-performance teams, Holland said based on a single person’s typical outgoings, the role left a monthly take-home of £249.

Poor pay in the eyes of candidates could tally with poor quality in the eyes of end-hirers.

“I spoke to the fourth hiring manager [today] who expressed issues with the quality of candidates,” says an Agile recruitment specialist.

‘Poor CVs’

The specialist, Sanches Clarke, said the managers complained that:

“CVs are poor or not even aligned with Agile… [and] the understanding of Agile and the ‘why’ behind it, is just not there.

“[The candidates also gave] surface-level or scripted answers in interviews, [with] no real context or experience shown.”

‘Lot of unsuitable candidates’

Fleet Space’s Mitch King took to LinkedIn to tell his followers of “a lot of unsuitable” candidates applying for jobs.

It is one of a list of truisms that King advises despondent job applicants to write on a post-it on their monitors to encourage themselves to still apply.

Cautioning that LinkedIn counts every click of the ‘Apply now’ button (King said he received 460 applicants versus the 1,000 that the ad displayed), he said:

‘Apply if you have what the job advert is asking for’

“[Remember] the number isn’t accurate. [And even then a] lot of unsuitable people apply for jobs.

“A lot of people from the wrong locations apply [but], if you have what they are asking for, apply.”

Michael Washmon, a Dynamics 365 techno-functional architect, hinted that recruiters must shoulder some of the blame for the ill-equipped coming forward.

‘Ads featuring endless buzzwords’

“People apply for jobs they aren't even remotely qualified for. I've been asked to ‘apply’ to developer jobs and won't because I'm not a developer,” Washmon wrote.

“The other problem is the long list of ‘requirements’ in ads featuring endless buzzwords. They often read like a technical university 4-year course syllabus.”

In November, REC member agencies said they were short of CNC, Cyber Security, Developers, Full Stack Developers, Platform Engineers, and “Technical”, on both a full-time and contract basis.

‘Short supply’

Temporary job recruiters further reported a “short supply” of candidates for Data Engineering, IT infrastructure Python, Technical Admin and Technical Design assignments.

REC’s full-time staffing firms were short of AI Developers, CAD, Digital, LLM Developers, QA Automation, SMT Engineers, Software Architects, Software Engineers and Technical Sales.