Contractor UK Market Report - Good rates roll on

It is a good time to be an IT contractor. The business pages might warble about double-dips and stumbling growth, and the public sector may be on the verge of a spectacular slash and burn, but at the coal face, IT directors have money, and enough work so that they can spend it.

Average hourly rates across the ten most commonly requested contract roles have jumped almost 15% in the last quarter, from £28.23 to £32.96 – their highest rates since the pre credit crunch report of March 2008.

Leading the surge back to surplus are project managers, whose rates have shifted to £38 from £30 in three months. This is perhaps the clearest indication that there are more projects ongoing than in some time, with rates back above the mid 2008 average of £37.50.

Another sign that we are in the middle of a particularly positive period is the progress being made in the rates of developers. Specifically, those using C# (up to £37.50 from £28.25) and .NET (£35 from £27.25). Again, this suggests an abundance of ongoing projects.

Alex Farrell is managing director of recruitment website "We have continued to see a rapid rise in the number of positions being advertised,” he says, “a real sign that the market is bouncing back." His own site backs up the idea that there are more roles available than last year. “The IT recruitment sector has remained steady since the beginning of the year,” he says, “We now hope to begin advertising an even greater number of roles towards the end of 2010."

His findings draw support elsewhere. CV Screen recently released figures suggesting a 47% increase in IT job vacancies compared to 2009.

Further figures, from IT rate trend watchers Salary Services, show an 11% quarter-on-quarter rise in the number of contract positions, and a total rise of 22% (up to 18,000 roles) since the beginning of this year.
CV Screen’s Matthew Iveson feels the good news is likely to continue. “Companies are more confident than they were 12 months ago,” he says “and are actively recruiting, particularly in eCommerce where we are seeing continued high demand.”

Web development continues to show good growth, he says, and, “in particular, candidates with experience of PHP expertise. There is also continual high demand for candidates with Java and .NET skills and we have also noticed a large rise in the number of SEO jobs.”

The positives from the world of development roles are re-inforced by Phil Handley, operations director at recruitment firm IntaPeople. "Firms are willing to make grand-scale changes to put themselves on a firm footing as the economy picks up,” he says. “And they’re turning to their IT departments to uncover new ways of reducing operational costs and writing more business.”

One means of writing more business seems to be through the world of CRM. Recent research from the National Computing Centre, which spoke to 100 firms from a sector split representative of the UK economy, found 33 organisations currently making changes to their CRM, with a further 44 planning to do so soon.

So far in 2010, most of the good contracting news has come from the world of finance, and that seems set to continue.
Figures from financial IT recruiter The JM Group recently showed permanent salaries nudging up 25-40% as a result of serious shortages of qualified talent. And that is being reflected in contractor rates too, according to giant group boss Matthew Brown. “With IT departments now struggling for capacity as workloads have increased, hiring has once again picked up,” he says. “Financial services businesses are facing huge regulatory pressure to make transactions more transparent and improve risk monitoring. Whilst one or two banks might be trimming back- and middle-office staff, that seems to be against the broader trend.”

But, contractors should not start planning extra-lavish Christmasses just yet. The most siginificant roles to fall in our figures for this month were business analysts, who have seen a stark drop to £27.13 from £32.25 in the last three months. Given that they are most in need when projects are being first planned, this could be seen as a troubling trend for the last quarter of the year.

Matt Farquharson

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