Where IT contractors should look beyond London

If you were to ask aspiring IT contractors where the majority of new technology jobs are being created, it’s highly likely they would say 'London,' writes Michael Bennett, a director at ReThink Group.

It’s a London thing, right?

But a fresh report by Tech Cities Job Watch has found that over a quarter of the latest computer roles are advertised in cities outside of the UK’s capital. Specifically, an analysis of over 54,000 permanent and contract IT opportunities advertised between October and December 2014 found that a number of cities including Bristol and Manchester are fast becoming ‘tech hubs’. So with this in mind, I’ll explore in this piece what’s behind the shifting geographical demand and reveal some of the tech contractor skills that are particularly sought-after outside of London.

The Magnificent (Digital) Seven

Currently, 1.5 million professionals, or 7.5% of the overall workforce, operate in the digital and technology arenas with 74% of digital firms being based outside of London.  So where are these three-quarters of the UK’s tech-led ventures that are NOT in the capital? Well, the ‘clusters’ boasting the highest average company revenue are in Manchester, Belfast, Sheffield and South Wales. Or if as a tech candidate you want choice and lots of competitive offers for your skills, try Brighton, Berkshire, Cambridge and Edinburgh, as these areas show the highest density of digital firms.

This is a drastically different picture to the one painted just a decade ago where the vast majority of digital and technology firms were based in London. Today, we’re even hearing that start-ups in Liverpool and Bournemouth are now exceeding the capital in terms of rate of growth. If this is true, what could have possibly prompted this change?

Rise of the IT regions – how it’s happened

Firstly, it goes without saying that the wider growth of technology has meant that a company’s actual location is far less important that it once was. The significance of being close to other like-minded businesses is the reason hubs like California’s Silicon Valley and East London’s ‘Silicon Roundabout’ have thrived (albeit London on a much smaller scale). But with the growth of new forms of technology, being close to competitors is no longer of such importance to digital firms.

The high cost of property and general expense of living, trading and getting staffed-up in London has also been a factor. The capital has notoriously high property and rental prices and this has prompted many IT businesses to consider setting up shop in an alternative location. Organisations have also grown to increasingly recognise the value of talent that simply prefers to live away from London and have relocated many of their shared services centres, partly for this reason. But when you get out to the shires or shores, which IT skills are going to be snapped at by the locals?

What’s hot

As with much of the digital arena, mobile specialists are the most keenly sought-after by firms who want to bolster their offering to reflect the increasingly mobile-centric market. As of the end of 2013 there are more internet-connected mobile devices than people in the world and research suggests that global mobile usage overtook fixed internet access sometime in the latter part of last year. Consequently, we’re seeing businesses taking on contractors with experience of undertaking large-scale mobile projects, particularly in the South West region which is home to a number of burgeoning app development firms.  

Mobile and Web development

However, demand for talent with experience in this area is so widespread that it’s naive to point solely at cities like Bristol and Bournemouth as being at the forefront of this demand. Firms across the UK have sought mobile contractors to lead large-scale development projects and it’s likely this demand will continue for the foreseeable future. In fact, as of the second quarter last year, mobile and web development roles make up almost two-thirds of the UK’s digital vacancies, highlighting the considerable need for experts in these fields.

Cloud

Another area of the IT labour market where there has been considerable demand for talent is Cloud Computing. Indeed, a number of major technology firms such as IBM and Microsoft have aggressively built up their offering in this field and now require specialists who can develop, test and provide support for their cloud solutions. As above, demand for experts is countrywide, as firms in a range of sectors need specialists who can help them to make the transition from traditional data storage to the cloud. In this instance though, the majority of Cloud opportunities have so far stemmed from the capital, where the appetite for suitably skilled contractors has been bigger than anywhere else in the UK.

Security

Possibly the most widely-known of all the tech fields that require specialist contractors is Cyber Security. High profile ‘incidents’ have helped this become the case. For example, the world witnessed the breach of Sony’s online defences that resulted in a number of exclusive films being leaked before their release dates. But the electronics behemoth is of course far from being the only organisation that has improved its virtual defences. It’s all good news if you’re skilled in this area. Indeed, a crippling shortage of cyber security specialists has pushed contractors’ day rates up by 16%, while the number of permanent vacancies is said to have doubled over the past year. This too is a field where demand largely stems from London and is most visibly reflected in salary increases across the capital. In particular, permanent salaries in other regions grew by approximately 10% in 2014, but London pay rose by 14%. And for contractors right now, we’d say that the £500 day rate reached in December is still intact, positioning them as joint-first in the rate stakes of the 10 most in-demand IT contractor skills.

Big Data

Lastly, it’s no secret that one area where there has been considerable and sustained demand for talent is Big Data, which also offers its temporary practitioners about £500 a day. The field has been called everything from the “next frontier for innovation” to the “new oil” and businesses of all shapes and sizes have sought expert contractors who can harness and utilise platforms like NoSQL databases. However, research shows that three in five organisations lack the skills to ethically, responsibly and compliantly use their customers’ data, which has led many to seek expert contractors. But bear in mind that Big Data contracts, while paying handsomely on paper, show the largest fluctuation in pay, suggesting that many businesses still aren’t entirely sure what to do with the masses of information at their fingertips, or how to value those who can harness it for them! Demand for these specialists has been spread across the country and is “holding all sectors back,” research for EMC Corporation has found. That said – if you’re big on Big Data get yourself to the North West, as it appears to have a particularly strong market for contractors who can aid big data-led change management projects.

Final thought

While prime minister David Cameron proposed his vision for a ‘Tech City’ that could rival California’s Silicon Valley back in 2011, the growth of the digital arena has meant demand has been spread across the entire country. Rather than a tech city, Britain could be on its way to becoming a ‘Tech Nation’.