IT contractors optimistic about pay prospects
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Monday, 30 November, 2009 | Tagged in Rates | Written by Crackerjacks
By David Watson
Click here for the full article on Computerworld
IT contractors are more optimistic about future pay rates than their counterparts in many other professions, according to a survey by specialist contract staffing provider Crackerjacks.
The survey, carried out in September, looked at contractors in a range of occupations, including IT. A total of 1053 IT contractors replied to the survey.
The result was that on average, IT contractors had an expected hourly pay rate of $66, up 4.8 percent from the previous survey, in March.
Of the 21 occupations surveyed only half registered an increase in pay expectations, and while IT didn’t register the highest increase – that went to retail and scientific, which both reported a 20 percent rise in expectations – the result is good news for the industry, says Crackerjacks managing director Tony Wai.
“It has been a hard year and the outlook for 2010 is better,” Wai says.
The increased pay expectations are a sign of increased demand for IT contractors, which is being driven by increasing project work, particularly in the private sector, he says.
“While there are some central and local government projects, there has been more of a push from the private sector.”
Different areas within IT are seeing more demand than others, he says, with specialist programming skills such as Ruby developers in demand, and business analysts are also sought-after.
On the other hand, “some of the more general skills, such as network administration and technical support, haven’t lifted as much.”
Wai says the upturn in contractors’ pay expectations may be a precursor to an upturn in the permanent IT recruitment scene.
“What we’re finding is that contract rates tend to be a lead indicator regarding permanent roles.
“In some professions, it is the other way around, but with IT, it is a lead indicator, because IT is a contractor-dominated market”.
While the past 12 months have been tough for contractors, many have remained employed by moving around the country or going overseas.
“Contractors have been fairly mobile and there has still been strong demand for good contractors.”
Comments from IT contractors who responded to Crackerjacks’ survey include:
“Rates have come down across the IT industry over the past year. It is an employers’ market; there are not enough contracts for all of the IT professionals seeking work.
“Businesses are also looking to pay less while still expecting a high level of skill when hiring.
“I am hoping that things will pick up in the New Year. It appears businesses are holding off to kick-off projects until 2010. Naturally, when this occurs, there will be a larger supply of contracts available in the IT industry.
“Particularly focusing on the banking industry, a number of IT projects are being shifted offshore to Australia.
“I have concerns that these projects may not return when things start to pick up again in New Zealand.”
Another respondent notes: “I personally entered the contracting market because of a redundancy; as a result, I have a view on both the contracting and permanent employoment markets.
“In my opinion, over the past two years there has been a 25% (approx) cut in remuneration across the board for permanent and contract jobs.
“It is my expectation that things will start to strengthen over the next six months and we are already starting to see glimmers of this happening.
“The permanent market has not turned yet – salaried jobs are still difficult to source and the remuneration offered for these roles is not what it should be, because it has not kept up with inflation.
“The contracting market is more responsive to change and is starting to strengthen.
“Looking at the IT industry in Auckland, I believe there will be surges of opportunities for individuals who possess specific skill-sets, but professionals who are more ‘generalised’ will still find it difficult to find work.
“Clients can afford to be specific about the person they hire, so naturally they will gravitate towards professionals with niche skills.”
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