IT contractor demand ‘marginally better’ in September 2025

The UK's shrinking market for temporary IT and technology jobs moved towards growth in September 2025 for the first time in four months.

Sharing with ContractorUK the data from its hiring index, where monthly growth occurs at 50.0, the REC scored IT contractor demand for September at 43.7.

'In the red'

The reading by the Recruitment & Employment Confederation (REC) means IT contractor demand in September was still 'in the red,' with fewer new roles than in the previous month.

But the REC's full dataset (which contains the 43.7 index score for September) shows that the rate of decline in the stock of new contract IT roles has eased, as in August it was 42.9.

August also continued a downward trend that has hurt IT contractors since May 2025 — a month-on-month narrowing in the pool of new freelance tech opportunities, REC data show.

'End-of-quarter hiring crunch'

But the month when decision-makers, stakeholders and job candidates are typically back from their summer holidays — September —stops that rot.

Historically, September is also one of four months of the year where an end-of-quarter hiring 'crunch' occurs, largely due to IT contractors being taken on in three or six-month stints.

With apprehension over the economy, Employment Rights Bill and Autumn Budget 2025 all unchanged since August, seasonality is the surer engine of the tiny improvement for IT contractors.

'Very little positive economic news'

Jon Holt, chief executive of KMPG, said the REC's index for September 2025 mirrored the "very little positive news out there on the economy in recent months."

"[Add in] lots of speculation about the budget, it is understandable that employers are cautious with their hiring," Mr Holt says.

Neil Carberry, chief executive of the REC, said he has "hope" that the jobs market and economy "may be moving towards calmer waters."

'Hirers need Autumn Budget 2025 to be pro-business'

But appealing to the chancellor ahead of her Nov 26th statement, he said that "failing vacancies" offered "a reminder that what is really needed is a shot of confidence…to get things going."

"The economic picture is still challenging for employers, with pressures beyond their control," continued Mr Carberry.

"A genuinely pro-business, pro-growth Autumn Budget next month could provide much-needed relief, by avoiding unaffordable tax rises on business, committing to real practicality on the Employment Rights Bill, supporting flexible work and reforming public sector hiring."

'Higher business costs and taxes are the key drivers of today's hiring slowdown'

Carberry was speaking after a downbeat jobs update from the Office of National Statistics (ONS).

"There's no sugar-coating it — the UK jobs market is cooling," Louise Rayner, founder of contractor services provider NumberMill, said of the stats.

"[The ONS] data show payrolls falling, slower wage growth, rising unemployment, and fewer vacancies."

Pointing the finger at Rachel Reeves' Autumn Budget 2024, Rayner said "one of the key drivers" of the hiring "slowdown" was "higher business costs and taxes."

'Employer NICs goes up, employment and vacancies go down'

"Employers are [still] feeling squeezed by [April 2025's] increases in National Insurance Contributions, a higher minimum wage, and rising social security charges," she said.

Seb Maley, chief executive of Qdos, has also unpicked the ONS's September 16th 2025 update.

"Employer NI goes up. Employment falls, along with job vacancies," he says.

"[So] naturally, many firms are turning to freelancers and contractors.

"Engaged compliantly off-payroll, [such workers] can help businesses mitigate these costs and navigate this climate."

'Thirty-six per cent of employers to hire additional contract talent'

Robert Half, a recruitment agency, was quoted on September 1st 2025 as saying 31% of employers plan to hire "additional contract talent" to plug IT skills gaps in the next six months.

But the agency's full findings, now obtained by ContractorUK, in fact state that slightly more end-hirers — 36% — will invest in IT contractors over the next two quarters.

The positive finding positions contractors slightly behind full-timers, however, as the agency found that an even bigger chunk of the end-users — 45% — intend over the same period to hire permanent staff.

'Open to new career opportunities'

Declaring themselves online as "open to new career opportunities," an engineering maintenance analyst is on the lookout for work regardless of its type or duration.

"There are so many people still looking for work that I'm beginning to wonder whether it's worth even posting a post looking for work on LinkedIn anymore," began the analyst.

"But here goes…I'm ideally looking for a permanent or outside IR35 contract positions in the UK…or residential openings overseas on a project basis."

'Absolute garbage positions inside IR35'

Like the concerns about the economy, Autumn Budget and Employment Rights Bill, IR35 status is an ongoing aggravating factor.

"[Leading staffing agency's] technology [division is] still putting out absolute garbage positions inside IR35," fumed a cloud architect.

"[For example] this….£36k permanent-role-equivalent, but [it comes] with no holiday entitlement, no sick pay, no employment rights, [is] for 3 months, [and I'd be] required to be fully onsite. I ask you, why is this allowed!?"

'£90 a day, inside IR35'

Similarly wondering in annoyance at both agencies and the off-payroll working rules, another IT contractor in the period covering the REC's data shared:

"I was offered a local service-desk position at £90 a day, inside IR35. And the agency wondered why they weren't getting any contractors to accept the role?!"

Nick Tailor, a cloud infrastructure consultant, says yesterday's self-employed are up against new forces, players, and platforms.

He wrote on social media: "If you look at all the platforms that are the most widely used [today] to make money with views or selling something…they are all 100% by design for fully-remote and self-employed.

"[Users of the following can and often do] all make way more money than [a conventional] 9-5 — YouTube; Instagram, TikTok, Fiverr, Upwork, Snapchat, WhatsApp, Telegram, OnlyFans, Fanvue, Shopify, Wix, WooCommerce, Amazon, Lazada, Shopee and Facebook."

'Multiple CV copies to multiple agencies and companies'

A Linux specialist says he's having to draw on his "over 25 years' experience" of professional freelancing to land a contract.

But in September, his efforts were in vain.

"I went to an [IT] Security meet[-up] and gave away multiple printed [copies of my] CV — to multiple agencies and companies. [But I got] not one contract on the back of it."

'Cybersecurity is a priority recruitment area for employers'

But the Robert Half findings indicate that the Linux specialist is at least looking in the right area.

In fact, "Cybersecurity" tops the agency's list of in-demand skills, with 48% of the end-users identifying it as a "priority" for recruitment.

Robert Half also found that 42% of the employers are actively planning to hire IT security experts in the coming months.

'Organisations willing to pay premiums for cybersecurity skills'

"Cybersecurity is no longer just a technical concern; it is a business-critical priority and organisations are willing to pay a premium to secure the expertise they need as threats continue to grow," says Robert Half regional director Craig Freedberg.

Despite the agency's bright forecasts for both full-time and contract job candidates, Freedberg acknowledged the pressures.

'Employers should consider upskilling, reskilling and tapping into new talent pools'

He says: "Businesses are navigating challenging macroeconomic conditions and rising employment costs in the UK which can make investment decisions even more difficult.

"To stay ahead, employers will need to look beyond traditional hiring strategies and consider upskilling, reskilling and tapping into new talent pools.

"As we move into the final quarter of the year, businesses should use this period not only to reassess their tech capabilities and strengthen hiring strategies, but also to prepare for navigating an increasingly complex and challenging digital landscape."

'Technology skills in short supply'

REC agencies placing IT contractors in September reported shortages of Data Engineers, Full-Stack Developers, IT Operations Management, IT Support Specialists, PowerPoint, and Software Engineers.

'Marginally better'

Speaking on Friday, the REC's deputy CEO Kate Shoesmith said: "Anecdote is telling us the labour market is getting marginally better, but [only] marginally. Which puts the spotlight on what the chancellor can do — and can take away".