‘Hesitant’ hirers kept IT contractor jobs market from growing in May 2024

Demand for IT contractors in May declined at a slower pace than in April but it still didn’t grow.

In fact, with no growth since August 2023, the appetite for IT skills on a temporary basis fell in May for the ninth month in a row.

'On its way back'

But Neil Carberry of the REC, which measures the IT contractor demand, now says the market “looks like it’s on its way back.”

REC’s CEO, Carberry was talking of the jobs market overall but his ‘on its way back’ remark potentially fits IT contracting’s trajectory, too.

Demand for IT contractors in May was 45.3, convincingly up on 44.4 a month ago -- in April, and also up on 45.0 in March.

The market for contract IT skills (still shrinking given that growth starts at 50.0), now sits just behind where it was in February (45.4).

'Downturn'

It means the big turnaround detected in IT contractors’ prospects at the end of Q1 has taken until now to turn into anything tangible.

It also means the Recruitment & Employment Confederation was wrong in April to say March was “the bottom of this downturn”.

LinkedIn users sharing their IT contract search experience will likely say the REC’s May Report on Jobs is right in one key area, however.

'Hesitant, and stalling'

It says clients may be technically able to hire but are “hesitant,” so they are “still stalling on hiring decisions,” said KPMG’s CEO Jon Holt.

To some of the LinkedIn users in the tech sector, ‘hesitancy’ and ‘stalling’ may feel like an understatement.

“In three months I've applied for about 150 positions,” says a former Head of DevOps, whose LI profile declares “looking for my next challenge.”

“[Only] four reached out for an interview. Of those, one stopped after three rounds of talks; one ghosted me after one round…[and] two [I’m still] waiting on the hiring managers.”

'Temporary tech jobs market still hasn't healed'

Another job-hopeful who is also in the DevOps space, but searching too for Cloud and Security contracts, reflected:

“As a contractor, I was out [of work] for five months in 2023… [and] here we are a year later, and the market [still] hasn't healed yet.

“[It] means lots of people, good people who were previously doing well in life are close to, if not over the line of financial ruin. This is a terrible time for many high-quality workers.”

'It's not your fault'

A technology recruitment agent who places BI, Data, Analytics and Azure contractors, Billy Hadfield, moved to reassure all types of techie:

“Couldn't tell you how many times I've been asked by candidates, ‘How's the market?’

“The one thing I am telling everyone [is] ‘IT'S NOT YOUR FAULT.’

“Of course, there's always more you can do -- re-write your CV; reach out to old managers, network with recruiters.”

'Businesses have to do more to regain candidate confidence'

A consultant at Venturi, Hadfield continued of the period covered by the REC’s data:

“If you are beating yourself up, wondering why you aren't getting interviews, feeling like you're taking one step forward and then being knocked two back. Just take a deep breath. I can 100% assure you, you are not alone.

“When things do eventually get better, and trust me they will, businesses have to do more to regain the confidence of candidates.”

'Changes after the initial scope meetings'

The requirements of a role suddenly changing mid-way through the application process is contributing to the confidence dent.

“This week I have been in discussion with two roles …[but] both changed after the initial scope meetings,” began an unimpressed IT contractor, with 25 years’ freelance experience.

“One changed from ‘occasionally on a single site’ to ‘full time on multiple sites.’ The other changed from an ‘SC’ role to a ‘DV requirement.’”

Further denting confidence is the rates being put up for quite demanding roles being massively down on historical levels.

'Project Support Manager up to £110 a day'

Advertised via an agency, a “project support manager” role has been slammed for offering a paltry “up to” £110 a day, for example.

“Some may have to takes these rate through necessity,” says a business analyst, who observed that accepting the £110 role inside IR35, via an umbrella, could pay out less than the minimum wage.

“But you can guarantee that [whoever accepts this project support role] will jump ship at the first chance they get.”

'Hit the ground running'

While contractors leaving clients in the lurch is known to undermine trust, some end-users aren’t even warming up to the ‘t-word.’

One IT contractor was all but told he couldn’t be trusted to “hit the ground running” quick enough because he’d been benched too long.

“When does the length of time being unemployed become a limiting factor in getting a role?” asked the contractor, whose previous assignments include ‘Head of IT/Digital.’

“The reason I ask is that I was basically told by a company’s hiring manager that this was the reason my application for a role was not going forward.”

“They had concerns that I would take longer to get back up to speed and that they needed someone to 'hit the ground running' [straight away].” 

'Clear improvements in most key measures'

Positively for the former head of IT, the REC says May 2024 saw “clear improvements” in “most key measures”.

Report on Jobs also says that among permanent staff in the IT/Computing sector, a total  of 12 candidates were “in short supply.”

The 12 were; Analysts, Data Architects, Data Engineers, Data Professionals, Developers, Software Architects, Software Engineers, general Technologists and Technicians, and techies skilled in Digital, Software, and Java.

Among temporary staff, the REC’s agencies struggled in May to find six of them, notably for Data, Data Engineering, Development, Technology, Software, Technical and Technology contracts.

The IT contractor market was additionally short of Automation Testers, Data Scientists, IT Support Specialists and IT generalists.

'Lagging, but caution may be starting to abate'

“Though [they are both] still lagging some evidence of a turn in [the] construction and IT [sectors]” was seen in May, said the REC’s Mr Carberry. 

Speaking after the report was published, the agency staffing boss continued to his followers online:

“There is potential energy stored in the economy, as employers are feeling more confident.

“Political certainty and falling interest rates should add to lower inflation and help this turn into movement over the course of the rest of the year.

“[Our] members report that clients are ready to hire, but hesitant. These numbers suggest that caution may be starting to abate.”