SJD Accountancy

Demand for IT contractors higher in 2015 than 2014

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The slight drop in demand for IT contractors in December 2014 has been followed by a rise in demand for their services in the first month of 2015. After significant falls in recruitment for IT contracting positions towards the end of 2014, there were fears that this could be the start of a trend, but the market has rallied in the last month.

The drop has been attributed to planned breaks for Christmas when demand for contractors is often lower due to office closures and staff absence leading to projects being put on hold or postponed. It is not clear whether demand will reach the level it was at before December hit its downward trajectory, but experts are cautiously optimistic that the potential is there.

Other experts agree, such as Kevin Green, chief executive of the Recruitment and Employment Federation who thinks that 2015 will have many people feeling better off than they did in 2014. He based this comment on the fact that recruitment is at a record high whereas there is still a significant skills gap and he also references the falling levels of inflation as a contributory factor.

The lack of qualified and experienced candidates is proving beneficial to newcomers to the affected industries who are able to command higher rates of pay and better opportunities. The IT market has specifically had a shortage of temporary worker who are seeking jobs in business analysis, SQL and Java, so any contractors with those skills who are seeking work should be in a good negotiating position. The market for permanent jobs has also seen shortages in those areas, with additional unmet demand for candidates with web development skills, experience with video game technology and PHP.

Whilst demand in these areas might be high, this will not necessarily be reflected in rates continuing to rise indefinitely, according to experts. There will come a point where it simply isn’t financially viable for companies to pay more and more to overcome the skills gap, so there will have to be a plateau in the future. However, this does seem like it might be a considerable way off given that this prediction comes along side further reporting that the number of contractors in all sectors dropped off in January. London was particularly hard hit with an above average decline in the number of available personnel for contracting roles.

If you are considering becoming an IT contractor and you want to know more about contractor tax or the ins and outs of setting up a limited company then we have plenty of advice and information in our guide to  Life as a Contractor.

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