UK demand for IT contractors took a big step towards growth in October 2025, in line with a contract tech staffing boss yesterday reporting to ContractorUK a "clear and sustained" uptick.
Recorded by the Recruitment & Employment Confederation (REC), the step measures only 2.5 index points, and it failed to elevate demand for freelance technology skills out of 'the red.'
But the REC index of temporary Computing/IT jobs now showing a score of 46.2, compared to 43.7 in September, represents the largest swing towards growth since February 2025.
'Broader base of demand forming, including for IT roles'
ContractorUK obtained the full index from the confederation yesterday.
According to the index (which scores growth at 50.0+), October's reading represents the second month in a row where the rate of decline in IT contractor demand has slowed.
Cue REC's chief executive, Neil Carberry, explaining that "Report on Jobs" for October 2025 shows "a broader base of demand forming….[including] for IT roles."
'Clear and sustained increase in IT contractor demand'
Ben Broughton, boss of IT jobs agency Primis Talent, confirmed yesterday to ContractorUK: "We've seen a clear and sustained increase in contractor demand across the UK and US.
"Clients who were cautious through 2024 are now restarting strategic projects, but are choosing flexible, interim talent rather than committing immediately to permanent headcount.
"This is especially true across data, AI, cloud, product and GTM [Go To Market] functions, where speed-to-hire and specialist skills are critical."
'Rise in temporary hiring overall indicates that opportunities are increasing'
On the back of the REC data, KPMG chief executive Jon Holt said an Autumn Budget 2025 "that builds business confidence" could now be "a catalyst for renewed hiring."
"We know…that chief execs remain upbeat about their growth prospects, and the [overall] rise in temporary hiring indicates that opportunities are increasing.
"[But] there just aren't enough strong signals currently for bosses to commit to building their workforce on a more permanent basis," said Mr Holt.
'Better, but don't kill it, chancellor'
In more informal comments he made (including in a social media post), REC's Mr Carberry said the "TL;DR" of the jobs report was just six words — "Better, but don't kill it, chancellor."
Carberry also emphasised that recruitment agencies "aren't exuberant," rather it "is just" that the UK jobs market turned "more stable" last month.
IT contractors were warned twice in October 2025 that the market is also client-led.
'Recruiters receiving more applicants per role'
"It's an employer's market right now and [even us] recruiters are feeling it," began hiring leader Jim Ludlow.
"Many TA [Talent Acquisition] teams are seeing application volume surge as recruiters are getting more applicants per role, but more doesn't always mean better.
"A recruiter's biggest stressor is a lack of qualified candidates, followed by competition and the expectation of more requirements [from clients] ahead."
'More roles I'll have in future for contractors'
Matt Collingwood, who places IT contractors for a living, confirmed that candidates still aren't calling the shots.
"Currently, we're in a client-driven market, where contractor supply significantly exceeds demand," began Collingwood, boss at VIQU IT.
"In a contractor-driven market, the dynamics flip. High-calibre talent is scarce, and recruiters must focus on talent engagement and retention.
"[Today, though], the more time I spend working with clients now, the more roles I'll have for contractors [tomorrow]."
'Contractors now getting nervous about renewals'
But two other recruiters don't sound overly optimistic about candidate prospects this month, next month, or even in New Year 2026.
"We're fast approaching the time of year where contractors will get nervous about renewals," began the first recruiter, Tom McGuire.
"December and January are always notoriously difficult months as the market slows down and decision-makers are on annual leave."
'Contractors may have to start exploring other opportunities'
A manager at JAM Recruitment, where he hires contractors for aerospace and defence companies, McGuire added:
"Contractors…[will want to] head into the new year with a level of security.
"[Yet] when renewals are delayed, contractors may [have to] start exploring other opportunities. This increases the risk of losing them to [the] competition".
'Shilly-shallying around Autumn Budget 2025'
However, before December and January, there's November — the budget month.
Speaking after the REC spoke of a 'broader base of demand including for IT roles now forming,' a veteran recruiter for finance companies, Jeanette Robinson, moved to manage expectations.
"Sadly…I don't think this will hold up in November's report due to…shilly-shallying around the budget," she said.
"Most recruiters I speak to have just seen everything stop. I'm working like a demon to get anything out of this market. We need certainty and a sense of knowing where we are going".
'The contractor model needs to be respected and supported at Wednesday's budget'
An IT/cloud and infrastructure consultant also appealed to Rachel Reeves ahead of her statement on Wednesday.
"This isn't about special treatment — it's about fairness," the consultant started.
"If the government and industry want a flexible workforce to keep delivering digital transformation, cloud adoption, and innovation at pace, then the contractor model needs to be respected and supported, not eroded."
'Bigger chunk of contractors and interim consultants will continue into 2026'
Primis Talent said transformation contractors were hired in October 2025, albeit to manage and mitigate potential missteps, technical or otherwise.
"Contractors are being used to de-risk transformation," Mr Broughton said yesterday.
"They're also being hired to cover gaps while permanent [staff] searches run, and to give leadership teams more agility with their budgets.
"Our expectation is that this shift towards blended workforces – with a higher proportion of contractors and interim consultants – will continue into 2026, as organisations balance growth ambitions with ongoing economic uncertainty."
'Fragile confidence now needs a boost from the chancellor'
Issuing a similar outlook, REC's Mr Carberry spoke of "a little light on the horizon" while warning that "firms can't wait forever to get on with their hiring plans."
"[This] fragile confidence needs a boost," he continued, seemingly appealing to the chancellor.
"The last time we were here was just before the October budget last year, when the employer NICs rise killed all the momentum in our labour market. Avoiding that happening again this month is key for Rachel Reeves — only growth in the private sector can close the fiscal gap."
'Technology skills in short supply'
Member agencies of the REC's technology sector group reported 19 skills "in short supply" on a contract basis in October 2025.
Ten of the 19 were scarce on a full-time basis too — specifically, CNC; Cyber Security, Data Engineers, IT, IT Infrastructure, Senior IT Engineers, Software, Software Developers, Software Engineers, Technology.
The nine skills uniquely scarce for IT contracts were AI/ML Engineering, AI/ML Project Management, Automation Testing, Data Architecture, DevOps IT Engineering, Electronics/Hardware, Engineering, General IT, and Technical Management.
