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IT contractor demand ‘remained very high’ in August

Roaring demand for IT contractors was a touch fainter in August 2021, an index shows, but still came in at an extraordinarily high level not seen since early 1998.

In fact, given 50.0 signals monthly growth, the market adjusting from 71.3 to 71.0 indicates IT contractor demand “remains very high,” the index compilers, the REC, told ContractorUK.

The staffing body’s CEO Neil Carberry said August experienced “record levels” of candidate shortages, “super-high” rates of temp billings growth and “fast-rising” daily rates.

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‘Mercenary contractors’

Online, such premiums inspired a post last month on “rate-chasing contractors,” with an agent saying his client called contractors “mercenary” after they quit for better pay elsewhere.

But the agent, who places transformation and change contractors at London-based insurance companies, suggested that end-users themselves had only recently been exploiting record contractor availability.

“A lot of clients were keen to take advantage of the excess contractors during the pandemic, and rates were slashed so contractors had to flex if they wanted to pick up work.

“However [now, just] a matter of months [later],” the agent said, “the market has flipped on its head and there is an under-supply of quality talent on the market, driving rates back up.”

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‘Still a job-seeker’s market’

Writing in the August Report on Jobs by the Recruitment & Employment Confederation (REC), its co-authors KPMG confirmed that “it remains a job-seeker’s market.”

And the professional services firm’s Clare Warnes hinted that while the pendulum of demand may of course swing back to favour end-users, it will remain with candidates for the foreseeable.

“The winding down of the furlough scheme at the end of September…potentially bringing more job-hunters to the market, could…add fuel to the labour shortage fire,” she said.

‘Tight labour market for the next decade’

Also writing in the report, the confederation’s Mr Carberry said a number of factors meant that the labour market would “remain tight for several years to come.”

Taking to LinkedIn after the report’s publication, the staffing boss appeared to upgrade his forecast, saying that the tight labour market would be around for “the next decade.”

“Attracting and retaining staff”, continued Mr Carberry, “requires a serious assessment [by end-users] of why workers want to work with the firm; from management approaches to facilities, as well as pay.”

‘Cannot expect contractors to work for sub-market rates’
Agreeing that money remains a vital part of the mix, the London insurers’ agent said: “Clients have to be fair, competitive, and flexible with their rates and if not, cannot expect contractors to work on rates significantly under market rates.”

In August, automation testing was the only technology skill uniquely scarce in the IT contractor market.

Also in “short supply” according to REC agencies, on a temporary basis (but on a permanent basis too), were Development, Software Engineering, Technology/IT.

The agents said the full-time market was additionally short of applicants with Azure, C#, Data Science, Software, Digital, Social Media and CAD.

Source: Contractor UK

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Demand for IT contractors hits highest level since March 1998

The UK’s runaway demand for IT contractors smashed another record last month, soaring to 71.7 – its highest level since March 1998.

So not for 23 years has appetite for IT contractors been so sharp, although the peak in June represents only the fifth month in a row where the demand increased.

Unveiling these figures, the REC said the market was now “improving at the fastest pace we have ever seen,” but cautioned, “it is still an unpredictable time.”

‘Technology sector doing well’
Although the agency body was describing the labour market as a whole, the reading largely applies to the IT contractor market too where the buoyancy but also the pressures are similar.

For example, while IT is “doing well” as is most “skilled work”, it is “difficult to know what the picture will look like” very soon, because the furlough scheme is winding down.

Speaking before the figures but in a period covered by its Report on Jobs, the Recruitment & Employment’s Neil Carberry also said shortages were acute in IT, just as they were generally.

‘Slowing the recovery’
So acute that, against the backdrop of general candidate availability dropping to a 24-year low, technology was identified as one of four sectors requiring “more [government] support.”

“[It’s likely] needed to avoid slowing the recovery,” warned Mr Carberry, the REC’s CEO, pointing not just to IT, but also to Hospitality, Food and the IR35 reform-hit Driving sector.

“[The] HGV driver shortage [is] intensifying. [So in] summary, we see a labour market that is lumpy right now — with high and unmet demand in some sectors.”

He continued: “For the longer run, a tighter labour market and fast economic change is inevitable. So employers need to be thinking about their workforce strategy much more practically, and what their offer is — but not just on salary — also on terms, and the perm-temp decisions.”

‘In short supply’
Across the perm-temp IT space, the skills “in short supply” in June according to REC member agencies were BI, Development, IT, Digital and Technology.

Unique to the permanent technology staff market, the shortages were of Automation Testing, C#, Data, Media, Software Engineering and Technical Sales.

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Whereas specific to IT contractors, opportunities requiring CNC, Cyber, Scala and Java were the hardest for the agencies to place.

‘Agents working flat out’
Elsewhere in the June report, the confederation says both businesses and government should “take action” to “reskill and upskill”, amid recruiters currently “working flat out.”

Sounding definitely flat out, and exasperated at trying to raise an ‘Open for Work’ LinkedIn user, a tech boss posted: “Why is it OK for candidates to ignore messages and reach outs?

“I just don’t get it. You set your status as ‘Open to work’ which is a signal that invites people to contact you, and then you choose not to respond to messages. Not even a simple polite ‘thanks but no thanks.’”

‘Nine-stage interview’
But candidates sound frustrated too, especially if interviews turn into marathons. A software engineer said: “I pulled my name for consideration for a company I was interviewing with.

“This was a company I did the first three [interview] rounds with two weeks ago. [And] this was for a role I wanted. [But] I decided to pull my name for consideration, because they were [next planning on] working to schedule rounds FOUR to NINE of the interview process”.

A specialist in Enterprise Architecture, the consultant added: “For the types of jobs I’ve been looking for, the number of interviews has been getting higher and higher.

“Companies think they are building processes that ensure picking the right candidate. I don’t think that’s true. I think it’s due to fear of picking the wrong candidate.”

‘Baffled’
Not all of the interview stages are always face-to-face, however, as a Microsoft recruitment partner clearly forgot.

Taking to social media, the recruiter admitted: “A client just asked me to book second interviews and I was baffled! The candidates hadn’t even had their first interview.

“[But] then I remembered we had sent videos across as their first stage, using the client’s interview questions [and getting the candidates to answer them].”

Written by Simon Moore

Source: Contractor UK

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