IT contractor demand in June 2024 dwindled due to general election 'pause'

General Election 2024 derailed two months in a row of IT contracting heading back towards growth, a downbeat REC is signalling.

The Recruitment & Employment Confederation says IT contractor demand in June was 43.6, on a scale where 50.0 is growth.

Obtained yesterday by ContractorUK, the REC’s full dataset for IT contractors shows July 2020 was the last time demand was lower.

So not since the recovery from covid, when IT contractor demand was a fragile 41.6, has appetite for contract IT skills been weaker.

‘Focus on temporary appointments’

Perplexingly, the temporary labour market as a whole in June 2024 returned to ‘the black,’ the REC said in Report on Jobs.

Jon Holt of KPMG, which co-authors the report, said June saw hirers delay permanent hiring but “focus on temporary appointments”.

The REC’s Neil Carberry confirms in the report that such a focus was enough to return temp demand, overall, to “positive territory.”

‘Political noise’

But Carberry also said that aside from the temp upturn, led by the Midlands and the North, June was notable for its “political noise”.

KPMG’s CEO, Mr Holt confirmed, by saying employers ‘hit the hiring brakes’ seemingly due to polling day on July 4th and in the run-up.

“The general election period causing some uncertainty…[has meant that] permanent hiring has taken a particular hit,” he says.

“[But positively for candidates] lack of demand means competition for the few roles available continues to drive pay growth.”

‘Short supply tech skills’

Despite the competition and narrowing IT contracts pool (it was a wider but still shrinking 45.3 in May), six IT skills were “in short supply” in June.

Scarce on both a full-time and contract basis, the six were Data Engineering; Development, Full-Stack Development, Technical Roles, Technology and Cyber Security.

A senior SOC analyst told his LinkedIn connections last month that cyber security assignments were appearing in his feed thick and fast.

‘Ton of cyber security jobs’

“There's a ton of cyber security/engineering jobs in the defence sector at the moment,” the analyst began.

“So using my [skill of gathering publicly available data] I've come up with a handy, non-exhaustive list of UK organisations currently hiring”.

According to the REC’s member agencies, June also saw shortages of IT freelancers available for C#, Java, and IT infrastructure contracts.  

‘IT operations and helpdesk among weakest performers’

Last month, Indeed.com said “IT operations and helpdesk” roles were one of the “weakest performers” across its platform.

In an update on June 27th, the job board said the volume of new IT operations and helpdesk roles had fallen by 19% since Dec 31st 2023.

Indeed’s economist Jack Kennedy also identified “software development” as a poor performer, albeit less so, at 10% down over the same period.

Software Engineering was one of eight technology skills uniquely scarce in June for full-time positions, according to Report on Jobs.

The other seven were; CAD, Cat5 Engineer, Data Architect, Project Manager, Front-End Developer, Technical Designer and Technical Sales.

‘Job-seeking process is an abyss’

Seeking a senior role in software quality, assurance or engineering, but so far in vain, one dejected candidate shared:

“The whole [job-seeking] process is an abyss.

“Random applications? No response. Referrals from senior executives? No response. Generic résumé? No response. Custom résumé? No response.  

“There is a very dramatic lack of hope in job-searching right now. No matter what you do, you can’t get past the fake jobs, the hundreds or thousands of applicants, and the hiring managers holding out for the unicorns”.

‘LinkedIn isn’t helping’

Uploading to LinkedIn but criticising the business network at the same time, the dispirited software job candidate continued:

“LinkedIn is not helping. But it’s a Catch-22. You’re supposed to get somewhere by using the platform but the platform is a never-ending feed of hopelessness and people losing it all. It’s torment on your mental health. And here I am adding to it.”

The software worker admitted to trying but failing at freelancing, making him feel like he has “no real prospects anymore”.

He explained: “The last contract I was hoping for is hanging by a thread based on what I found out last Friday.

“The last full-time role I’m interviewing for told me they want to go forward with interviews but they’re really looking for someone ‘less senior,’ which means it likely [won’t] work out. I don’t care about a less senior role. They do, because they think I’m a flight risk.”

‘Clients on pause during election campaign’

At the REC it’s all eyes on next month, now that a new government is bedding in.

“[Our member agencies] say that this felt like clients going on pause during the election campaign,” Mr Carberry said of June, updating his own followers online.

“One to watch [is therefore] next month. Taken altogether, I don't see a deviation here from the picture of the last few months. Labour markets tend to lag the economy, and a turn is starting to happen.”

The REC’s boss added: “[But] the election clearly had an affect on employer thinking. With uncertainty not [altogether] out the way, and interest rates likely to fall in August, we'll be looking for the market to improve across the summer.”