Twice as many IT contractors are seeing rate increases as those seeing pay cuts, according to a study.
The research, conducted by contractor services provider SJD Accountancy, has found that 24.5 percent of IT contractors are reporting an increase in their daily rates. This is compared to 12.6 percent who are experiencing pay reductions, according to the survey of 611 IT contractors for the period July to December 2014.
Just three years ago, the opposite was true. In 2012, the firm found that 29.1 percent saw pay cuts, while just 17.4 percent saw rate rises.
Simon Curry, CEO of SJD Accountancy, said: “This very strongly suggests that IT sector pay should recoup lost ground this year and finally pass its 2009 peak.
“Having reduced spending on IT during the recession, businesses are now ramping up recruitment as investment in technology revives. Increased competition for the best candidates will inevitably drive up pay.”
IT contractors are also benefiting from renewals of contracts that were negotiated during the recession, Curry added.
“It is becoming much harder for the end client to agree contract extensions at the same rate now that contractors have considerably more choice,” he said.
The survey found that the current median annual IT sector pay is £36,148, 2.6 percent less than the peak of £37,094 in 2009. The difference is the smallest since the start of the recession in 2008. However, IT sector pay has yet to surpass pre-recession peaks.
Nonetheless, over half (51.2 percent) of IT contractors are ‘very positive’ about the state of the market, a significant increase on the 37.6 percent of IT contractors who said they were ‘very positive’ this time last year.
“Contractors normally benefit from improving market conditions before permanent staff, so this dramatic increase in confidence over the past 12 months looks set to translate into better pay and job prospects for all IT workers later in the year,” Curry said.
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