IT contractor pay rises on the horizon

According to www.contractoruk.com new research from a UK computer jobs agency confirms what many IT contractors have suspected since the onset of the downturn – that freelancers have been hit the hardest.

ReThink Recruitment says 98% of IT contractors saw their rates cut or frozen in 2009, compared with 71% of IT staff who suffered the same fate with their salaries.

And although more contract IT jobs are emerging, the agency said, such roles are unlikely to compensate the pay dip, as 83 per cent of clients plan to keep rates steady.

Permanent IT staff appear better placed, given that the proportion of clients set to freeze wages in the IT department is slightly less, at around more than half of respondents.

But following two years of cuts in IT rates and salaries, pressure on end-users to peg back pay is beginning to abate, said ReThink director Michael Bennett.

According to the firm, although IT directors will keep a tight rein on pay, only five per cent of IT contractors will see their hourly rates downgraded again in 2010.

The outlook signals a significant improvement since 2009, when one in four IT departments cut the pay of contractors, in some instances by as much as 25 per cent.

“Contractors are more vulnerable to market fluctuations, so it’s no surprise they have been hardest hit by the recession,” Mr Bennett said.

“That said, with the job market now tightening rates for contractors should rise ahead of pay increases for permanent staff.”

However, any pay increases for IT staff, contractor or perm, will be “subdued,” as the computer jobs market has only just finished bottoming out.

Those measured pay rises are most likely to go to candidates skilled in C#,.Net, Java and LINUX, as demand for such expertise has leapt over the last quarter, the agency said.

“Good quality candidates with the right skills are already difficult to find,” Bennett reflected. “As IT departments begin hiring again they will increasingly have to poach personnel from rival organisations, which will fuel rapid pay rises.”