Contractor UK Market Report – Rates set year high

August for contractors can prove financially rewarding or thoroughly frustrating. Typically, it continues the general trends of July – higher rates, but fewer decisions being made – and magnifies them.

This August however is proving particularly lucrative for those in work – though this is unlikely to placate those awaiting sign-off on a contract, while their prospective programme manager soaks up some beach time.

Last month saw a year high for the average hourly rate among the ten most commonly requested roles – ranging from PM to analyst to UNIX consultant - in our market statistics. The July figure was £28.21, up 2% on the month before. August sees another 2% rise, edging up to £28.93.

This is reflected in the experience of recruiters and demonstrates the market's robust fortunes throughout 2005, according to Andy Heyes, manager, technical recruitment at Harvey Nash.

'We have seen an increase in demand for contract staff throughout July and August, typically 10% up from 2004,' he says. 'However, this has to be offset against key decision makers being on annual leave around this period. That said I believe the market is very healthy at the moment.'

The stand out mover in this top ten is the role of SAP consultant. Average SAP rates have rocketed from £34.83 last month to £41.76 this; an increase of 17%. Much of this can be explained by a run on SAP talent at the top end of the rate scale. Quoted rates for SAP Basis and SAP HR are both £100 per hour. SAP HR has seen an increase in the number of jobs posted of 20%. For SAP Basis, the increase was 7%. While these roles count for a small percentage of the total number of roles advertised, similar demand increases have been seen across all the more senior SAP skills.

Another big SAP mover has been ABAP. Contractors here can now command average hourly rates of £73.30, up 13% on just last month when the rate was £64.88. This comes as the number of advertised contract roles doubled over the passed three months, reaching almost 300. A sure sign that any slight increase in activity can mean a big payday for those with this rare skill.

The City continues to show steady growth, with average quoted rates there reaching £28.01. This marks an impressive 5% rise from £26.60 over the last six months and a slight rise on July's £27.85.

The movement has been noted in practice too, by Heyes. 'Contract rates continue to rise in the investment banking sector,' he notes, 'especially for contractors who have niche technology skills, like those with Agile methodologies on .net and Java or .net developers with Biztalk and Sharepoint.'

His reference to these last two technologies is bourn out by our figures, which show 496 advertised contract Biztalk roles, up from 392 three months ago, with a subsequent rise in rates from £31.16 to £33.93. For Sharepoint, there were 649 roles advertised in August, a jump in demand of 9% from 365 jobs three months ago. Median day rates moved from £300 to £325 over the same period.

Our figures appear to show a slight decline in the comms arena though. The rise of the average rate across the ten most commonly requested comms skills from £26.03 to £27.70 between May and June has fallen away slightly and currently sits at £27.07.

However, it is not all bad news. Heyes notes that, 'throughout the year we have seen an increase in demand for voice and data contract staff and subsequently their contract rates have increased.'

Our figures show an upward shift in rates for TCP/IP, moving slightly from £23.93 last month to £24.03 this.

Matt Farquharson


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