How has the South West Tech Contract Recruitment market changed

As the New Year has finally arrived, we’re focusing on all things tech talent here at TechSPARK. Throughout January, expect to find features covering everything from salary insights, to responsibly addressing the skills gap and highlighting some of the best places to work in the South West. For all of this, we’re delighted for Recruitment Agency, ADLIB, to be sponsoring the month.

To kick things off, ADLIB has broken down the ways in which the South West tech contract recruitment market has evolved.

It’s hard to believe that it’s been almost 2 years since COVID-19 caused the biggest disruption to the UK labour market seen in modern times. One of the questions that we are still asked regularly is: “How has the tech contract recruitment market changed?”

We’ve recruited contractors for the web industry during the recovery from the dot-com bubble bursting and the Financial Crisis. Whilst there are significant key differences between those recoveries and the current pandemic, we have seen some similar trends emerging in the UK’s tech and web design contract market. Here, Ben Halligan, ADLIB’s Contract Delivery Manager shares his take:

In the months following the first period of lockdown, there was a massive influx of available or furloughed candidates. As the months progressed, recruitment worked its way back onto the agenda, and by September 2021, it seemed to be top of the priority list. This increased demand, combined perhaps with a deeper sense of loyalty (for employers that were supportive) – has led to a noticeable shortage of applicants, both generally and within contract recruitment.

Experienced contractors tend to have well-polished CVs and great track records. However, fewer applicants and fewer people in the marketplace inevitably result in a decrease in the number of quality CVs for each role. We have had situations in competitive markets where a quality CV has been enough to secure an offer of a contract.

In the immediate aftermath of lockdowns and various restrictions, contractor rates took a hit to the tune of around 20% on average. In the second half of 2021, that has been regained with roughly an extra 10 – 15% added on top (potentially more for certain roles). If we took an average Senior Developer at £500 p/day as an example, they may have been forced to drop to £425 in 2020 but now be earning £550 in 2021. Also, a noticeable impact of IR35 seems to have been to drive the average daily rates higher – with clients typically picking up the bulk of the extra tax and Natioal Insurance.

The number of contract vacancies and rates may be on the rise, but we haven’t seen the return of 6 month plus contracts just yet. Perhaps this has been influenced by the introduction of IR35 to the private sector & we’ll see longer initial bookings in 2022. Our average initial contract length has been 3 months but over 95% are extended at least once.

When permanent staff were working reduced hours or were furloughed, several our clients were offering 3 or 4 days per week to new contractors. Many projects have now fallen behind and the recent preference has been for full-time, 5 days per week for contract roles.

Because clients and recruiters are now receiving fewer CVs, it may be time for clients to be a little more flexible with the skills and experience required. The rise of remote working has made the market extremely competitive and if a contractor can “do the job” it’s probably worth making them an offer, even if they don’t quite tick every box.

When companies had furloughed staff and/or were making redundancies, decisions to bring in contractors typically needed to be made at a very senior level. It’s still an uncertain time for many businesses, however, the sign off process has eased a bit in recent months.

At certain points in 2020, it seemed as though the permanent recruitment market had ground to a halt. In some ways this worked to the advantage of contractors, clients being able to bring them in to solve short term needs. Even though permanent recruitment is now in full swing, the overall level of demand for resources has increased. A successful contract market needs a high level of overall demand to fuel it, and therefore, we are hopeful of a buoyant 2022 for ADLIB Contract.

Over the last 2 years, there have been a variety of new products and services developed in response to COVID-19. Other businesses have had the opportunity to develop a remote working model and adapt their offering to suit their customer base in changing times. We expect those types of businesses to continue to provide well-paid, stable contract opportunities throughout 2022.

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