Constant digital transformation and continued business growth mean technology contractors will continue to be highly sought after this year and beyond. Organisations are competing for talent in a short-skilled market, causing day rates to increase by an average of 2.8% in the last year.
Activity levels set to rise
It’s a positive outlook for almost all (95%) organisations surveyed in the Hays Technology Contractor Day Rate Guide 2019 who engage contractors, as they expect their activity levels to rise or stay the same in the year ahead. Close to three quarters of these (71%) expect their organisation’s activity to increase.
As organisations expect to grow, an increased use of tech contractors is on the agenda. 41% of organisations who engage technology contractors expect to do so in the next year, up from 35% last year. This is higher than the 35% of organisations across industries who plan to use contracted staff in the next year, revealing the extent of the demand for technology contractors.
Day rates rising to fight competition
Alongside rising business activity levels, day rates for technology contractors increased by 2.8% in the last year, up from 1.8% the year prior. This rise in rates is set to continue throughout the year as over three quarters (77%) of those who plan to engage with contractors said they expect to further increase day rates in the next 12 months.
Developer roles have seen some of the highest pay growth across almost all UK regions as organisations focus on improving internal and external user experience, as have Java developers where demand is often outstripping supply. Development roles in digital technology have seen pay rise by 4.9% since last year.
Functional testing roles, especially test analysts and senior test analysts, have also seen significant day rate increases, as have QA analysts whose roles are increasing in complexity. Contractors working in cloud and infrastructure roles saw a 3.8% average day rate increase, largely driven by ongoing demand for more specialist skillsets in roles such as server support engineering.
Skills shortages continue
The heightened demand for contractors is due to continued tech skills shortages faced by many organisations in the last year, with almost all (94%) stating they experienced a deficit when hiring. Despite increased hiring of contractors to cope with this deficit, the negative impacts of skills shortages are already being felt. 61% of organisations state that skills shortages are impacting their ability to deliver projects, and 54% say they have affected organisational productivity.
These shortages show little sign of reducing, as almost two-thirds (65%) of users cite a shortage of suitable candidates as the primary challenge they anticipate when engaging with contractors over the next 12 months. This is closely followed by 60% who expect to face competition for talent from other organisations, an increase from 55% last year.
James Milligan, Director of Hays Information Technology and Digital Technology said:
“Constant introductions of digital projects in the workplace means more organisations engaging with contractors to support their business activity. Organisations may still be exercising caution, keeping day rates consistent for year-on-year for project and change contractors, but roles essential to digital projects have seen significant rises in day rates which are only set to increase.
Although day rates are an important factor for technology contractors, maintaining a positive work-life balance should also be a key consideration for staff and organisations. As over half (60%) of tech contractors say their work-life balance is good or very good, organisations should bear in mind that flexible working options, including home or remote working, will appeal to tech contractors.
Private sector organisations are urged to be aware of reforms to IR35 legislation and make sure they are adequately prepared. Learning valuable lessons from the public sector will ensure those in the private sector who expect to engage freelance or contract staff this year can mitigate risks to their organisation, potential cost increases and loss of key talent.”
-Ends-
For more information contact:
Helen Flannery, PR Manager, Hays
T: +44 (0) 203 0400 282
M: +44 (0)75 5579 70401
E: [email protected]
About the report
The day rate information included in the Hays Technology Contractor Day Rate Guide 2019 has been compiled using information gathered from Hays offices across the UK. It is based on job listings, contract placements and candidate registrations. The recruiting trends and benefits data is based on survey findings of over 660 technology contractors and those engaging them. The survey was conducted in 2018 and completed by organisations of all sizes and sectors.
About Hays
Hays plc (the "Group") is a leading global professional recruiting group. The Group is the expert at recruiting qualified, professional and skilled people worldwide, being the market leader in the UK and Asia Pacific and one of the market leaders in Continental Europe and Latin America. The Group operates across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments. As at 31 December 2018 the Group employed 11,700 staff operating from 262 offices in 33 markets across 20 specialisms. For the year ended 30 June 2018:
– the Group reported net fees of £1.072 billion and operating profit (pre-exceptional items) of £243.4 million;
– the Group placed around 77,000 candidates into permanent jobs and around 244,000 people into temporary assignments;
– 19% of Group net fees were generated in Australia & New Zealand, 26% in Germany, 24% in United Kingdom & Ireland and 31% in Rest of World (RoW);
– the temporary placement business represented 58% of net fees and the permanent placement business represented 42% of net fees;
– Hays operates in the following countries: Australia, Austria, Belgium, Brazil, Canada, China, Colombia, Chile, the Czech Republic, Denmark, France, Germany, Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Romania, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA