Why UK IT contracting is now ruthless, punishing — yet not insurmountable

As contractors in IT approach the final weeks of 2025, it's worth taking a hard look back. This year has arguably been one of the toughest of my 26-year technology recruitment career.

The temporary IT jobs market in 2025 has been ruthless —  plain and simple, writes Matt Collingwood, managing director of VIQU-IT.

But what's behind the struggle that a lot of IT contractors are enduring? Well, unlike previous technology hiring downturns, there isn't a single problem to blame.

Legacy is why IT contracting is in a perfect storm

To my mind, it's a legacy issue.

Challenges and obstacles that have been building for years are now colliding, creating a perfect storm for IT contractors, who are simply trying to secure work.

Some of these problems are within our control; others are entirely external.

The inconvenient truth is that unless IT contractors, their clients and us tech recruiters face these challenges head-on, the temporary IT/Computing jobs market will continue to punish those who are unprepared, complacent, or unwilling to adapt.

Six-month tech hiring plans are the new norm

The legacy of covid, combined with rising costs, including inflated employer taxes, higher corporation tax and biting inflation, has squeezed company profits to the bone.

This spike for HMRC, amid squeezed bottom lines for almost everyone else for whom revenue matters, has led to businesses no longer planning for the long term.

Whereas once our clients (companies and organisations that we supply IT contractors to ) would confidently look 18 to 24 months ahead for their staffing, most now plan their hires for only the next six months. Or 12 months is the absolute maximum which we see.

Uncertainty prevails, amid a near 10-year low in biz leader confidence

This short-term mindset signals uncertainty.

Businesses need stable prices and economic confidence to invest in new products, services and projects. Without these conditions, growth stalls, innovation flatlines, and business suffers.

In fact, while I'm sure it's a stat that Rachel Reeves won't cite in next Wednesday's Autumn Budget 2025 speech, according to the IoD, its Economic Confidence Index for business leaders fell to -74 in September 2025. The Institute of Directors (IoD) said the drop marks the lowest reading since its confidence survey began almost a decade ago.

Where is tech contractor recruitment right now?

The reality 'on the ground' for tech recruitment and contractors is harsh. Clients are hesitant to commit to and take on new projects that require contract or freelance expertise.

Instead, employers are waiting for the dust to settle.

But if the environment does not stabilise, I fear we may see:

 The worrying rise of unethical 'IT contractors'

After almost 30 years in technology staffing and recruitment, one trend stands out to me as deeply worrying.

It's the rise of rogue and unethical 'IT contractors.'

These impostors who pose as professional contractors (so really they're not genuine contractors in my book) are still thankfully a small minority in the UK technology industry.

But their growing prominence should not be ignored because they are now causing some clients to lose faith and confidence in contract resources as a staffing option for IT departments.

Two IT contracting ruses that must be stamped out

Unfortunately, some practices in the IT contracting marketplace now border on the absurd.

I want to outline and expose two:

Polygamous working is where contractors sign agreements that promise their "full availability," while quietly they go off and work for multiple clients simultaneously.

It's outright fraud.

And before anyone jumps down my throat, let me be clear. Personal Service Company contractors in IT and other sectors are absolutely entitled to have multiple clients. Having multiple contracts is perfectly legitimate as a technology services contractor, and I would even encourage it, particularly where the limited company director is operating on an "outside IR35" basis.

However, there is a line that cannot be crossed.

If a contractor signs a contract, agreeing that they personally will be available to provide services between specific hours, where the client expects them to meet certain obligations — and then the contractor agrees to the same for two other clients simultaneously — invoicing for hours of work they cannot possibly have delivered in both places at once, that's fraud.

How are IT contractors unethically using Fiverr?

Secondly, there are the Fiverr-using contractors (N.B. it's not just Fiverr, other project and skills marketplaces are used too as part of this ruse, but in my experience, it's mainly Fiverr).

This is where the contractor has secured professional-level work in the UK on the written understanding that they would personally provide services, albeit remotely.

But then, secretly, the UK contractor outsources the work overseas to someone they've met online, such as on Fiverr, and the contractor pays them a small fee to complete it.

We recently had a major retail client who discovered that individuals were accessing their network from India, and downloading sensitive customer data.

Fiverr-using contractors like this are hurting all IT contractors' reputations

It emerged that an 'IT contractor' had subcontracted the work to someone he found on Fiverr, with no subcontract in place and no oversight. He gave the Fiverr user his login access rights without the client's knowledge or consent.  It constituted a serious security and compliance failure, putting both the client and their customers at significant risk.

Such ruses are undermining the trust that hiring managers need to have, and indeed used to have, with remote workers and contractors.

The controversial truth here is uncomfortable; the contractor market is being punished by the unethical minority, who are peddling the two scams outlined here.

Why 'It's not me, it's you' isn't helping, and frankly, is getting old…

I have written for ContractorUK for many years (at their invitation), and I've always shared my opinions with the best of intentions, even when they have upset some! What I am about to assert will, likewise, provoke strong reactions, but I feel it needs to be put on the record.

Too many contractors feel resentful and blameless for the position they find themselves in.

The negativity around struggling to find assignments, feeling trapped inside IR35, or frustrated by poor rates, becomes self-perpetuating.

N.B. In fairness regarding daily rates, they somehow don't seem to have grown in almost a decade for some temporary techies.

The easy target to blame here is everyone else. Agencies, clients, the market. Matt Collingwood, surely?!

But are all IT contractors really doing enough themselves?

The unenviable position of long-term, jobless, tech generalists

Let's take the example of long-term contractors who find themselves on the bench.

Many such contractors are generalists, hands-off, lower-to-mid-level technologists who have moved across multiple sectors and various project types. While that breadth of not insignificant experience might have been snapped up in the past, today, clients want specialists.

What sort of freelance IT contractors do employers really want?

Companies want techies who can hit the ground running, in a niche or along the cutting-edge of a technology.

Competition for assignments is tougher, client expectations are higher, and UK contracting operates on an entirely different level, which is almost at breakneck pace in the technology sector, thanks to the effects of AI and Automation.

Based on what I'm seeing in tech recruitment, and with 2026 just a breath away, specialisation is now the key to survival for IT contractors.

Let me outline my interaction with a technology jobs candidate who initially didn't want to hear this message whatsoever.

'No tech jobs out there anymore, thanks to cheap overseas labour'

The contractor was a freelance programme manager, insistent on there being "no jobs out there anymore."

And there was too much "cheap labour from overseas," he regularly told me, causing his usual opportunities to evaporate.

Over time, I helped him shift his perspective.

We worked together to focus on his skills; on selling himself effectively with a fresh CV and LinkedIn strategy, and I encouraged him to approach the temporary technology jobs market differently.

The result? Within a few weeks, he secured two offers in quick succession.

Self-belief and adaptability. Have you checked yours?

Belief in oneself and a willingness to adapt are key for IT contractors.

When so many obstacles seemingly gang up on you, self-belief and being adaptable — traits of individuals I know who have contracted in IT successfully for decades — can sometimes get neglected, as you simply devote all your energy to battling the perfect storm.

To those contractors who aren't my reformed PM contractor just yet, it's at least time to stop blaming others.

The ruthless IT contractor jobs market is competitive, yes, but it still rewards those who specialise, learn, adapt, and sell themselves effectively.

IR35 has smashed UK IT contracting, and some clients are to blame

There's another inescapable truth of IT contracting right now: IR35 reform in the shape of the Off-Payroll Working (OPW) rules has crippled countless contractors.

The changes of April 2017 (in the public sector) and April 2021 (in the private sector) have created a market where many skilled, limited company professionals are now frozen out of work.

As someone who lives and breathes contract IT recruitment, I spend my days talking to clients about their:

In short, I try to create opportunities wherever possible. But increasingly, clients are paralysed by fear. Risk-averse and unsure about IR35 compliance, many end-users simply will not take contractors on, or will apply IR35 inconsistently. Unfortunately, those OPW missteps create wider problems for both HMRC and the contractor market.

Some recruitment agencies are failing contractors

Pockets of the UK recruitment agency market are consistently failing the contractor community, too.

Before 2020, roughly 33,000 recruitment agencies were operating in the UK. That is a staggering number, and on a per-capita basis, the UK has more recruitment agencies than any other country in the world!

The effects of the 2020 pandemic and the basic supply and demand dynamic cleared out many staffing agencies, and arguably, these agencies didn't belong in the first place.

However, this 'agency clear-out' left many contractors unpaid and understandably angry. In addition, lots of contractors are becoming increasingly frustrated by the declining level of service and care provided by many recruiters, which, in part, can be blamed on the IT contracting market currently being client-centric.

IT contractors, the labour market's new commodities?

With AI-driven convenience leading to a surge in job applications to get through and mounting pressure to generate leads, map out clients and deliver placements, the sad truth is that contractors are often treated as mere commodities.

Until all recruitment agencies recognise that their long-term success relies on nurturing and supporting a strong contractor community, those agents or firms that are consistently giving recruitment a bad name will continue to fall short — and so will the market as a whole.

But make no mistake, the UK's temporary market for technology jobs will shift again. It always does.

Power, professionalism, and punishment

When demand for tech skills on a temporary basis rises and supply tightens, the power will swing back to contractors.

And contractors have long memories. They will remember which recruiters provided poor service, who failed to communicate, or who treated them as expendable.

Moreover, when that power returns, the UK's professional contractors will 'pick and choose' carefully. Those recruiters who earned respect and trust will thrive; those who didn't will be left behind. The market rewards loyalty, professionalism, and genuine partnership — and it punishes those who fail to provide it.