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IT contractors proving too expensive for some businesses

There has been plenty of reporting on the fact that the skills shortage has enabled contractors to command higher rates, with some sectors seeing record highs in the costs of bringing in flexible workers to meet their business needs. A recruitment agency which has seen this trend emerging and growing momentum in the recent months […]

By Alex Graham on 13 Aug 2015
Read time: 2 minutes

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There has been plenty of reporting on the fact that the skills shortage has enabled contractors to command higher rates, with some sectors seeing record highs in the costs of bringing in flexible workers to meet their business needs. A recruitment agency which has seen this trend emerging and growing momentum in the recent months has noted that application analysts, as one of the contracting disciplines that are most in demand, are now able to charge rates which may be beyond the reach of some potential clients.

Computer People, a firm who specialises in placing candidates in such roles, have conducted an IT Monitor Survey which has revealed that the rates commanded by application analysts working on a contract basis have increased by 27 per cent over the last twelve months. They believe that a lack of qualified and experienced candidates with current availability was driving the pay rates ever upward, with some companies finding that they are unable to afford skilled flexible workers as a result. Daily rates are regularly exceeding the advertised rates on offer, with businesses vying to attract the best and brightest amongst the pool of those who are available.

Senior management contractors are enjoying the second highest rise in rates, with a 12 per cent increase in the cost of hiring them, with tech support, business intelligence and web development following them respectively. This is all despite some hirers choosing to ‘wait and see’ when it comes to taking on even temporary staff, meaning that there has been a slight slow-down in the number of roles available compared to the first quarter of 2015.

Regional demand has seen some sizeable spikes in the number of positions on offer for software engineers, although there was an overall decline in the total roles available to qualified tech support and web development contractors. The general unpredictability of the market has been cited as one potential cause for the fact that accurate predictions have been so difficult to make, although 2015 still appears to be stronger than 2014 was on the whole.

Experts are already warning that a summer slowdown is a longstanding tradition, so any drop-off in numbers over the last couple of months is to be expected, and not necessarily a sign of a general downturn in demand. With hiring managers and many contractors taking holidays over the summer, there is always likely to be a slight dip in the rates that new staff are taken on.

Anyone who is contracting in the technology sector and wants to ensure that they are making the most of the rates currently available should speak to a specialist IT contractor accountant who could help them to save money on their bills and maximise their take-home pay. For details of the services we offer, our friendly staff are always on hand, so call today on 01253 362062 or email us at contractoradvice@nixonwilliams.com.

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We will never share your data with anyone without your permission. Read our Privacy policy to see how we use your data.