IT contractor pay 'exceeding what hirers can afford'

Application Analysts are leading the pack of contractors who can command pay premiums too hefty for some hirers to afford, Computer People has signalled.

According to the recruiter’s latest IT Monitor survey, rates for contract application analysts in June were some 27% higher than they were at the same time last year.

“A lack of skilled, available candidates is driving pay rates beyond some companies’ reach,” said Computer People’s managing director Roy Dungworth, reflecting on the Q2 survey.

Contractors who are senior managers are sitting on the next highest annual premium (12%), followed (in order) by those in tech support, business intelligence and web development.

But just as it has for every IT contractor, the pool of contracts for them has narrowed since the first three months of 2015, partly due to hirers adopting a “wait-and-see approach”.

Dungworth added: “While the demand for contract staff we witnessed during the recession… appears to be dropping off, the IT sector continues to...fill immediate gaps in strategic skills.

“Further proof of this comes from the steady growth of daily rates, which are currently outperforming advertised permanent  salaries.”

Yet contract placements via the IT agency have not kept pace with permanent positions, although they are still in positive territory (by about three per cent against last year).

As to demand on a regional basis, London is seeing the biggest “demand spikes” for software engineering, in contrast to tech support and web development, which declined in the capital.  

The market’s unpredictability (software engineering last year spiked regionally) may be why forecasts were ducked.“2015 continues to look stronger than 2014,” Computer People said.

“But don’t expect a smooth ride. While Q2 delivered an expected dip, what lies in store for Q3 is difficult to predict [especially due to]… the traditional summer slowdown.”