Economic wage growth strengthens as economic contraction eases within urban centers
In a recent report by recruitment agency Clarity Resourcing, it has been revealed that day rates for IT contractors in the City of London have seen a significant increase since 2009. This rise can be attributed to several factors, including renewed investment in financial services, regulatory compliance requirements, and a skills shortage in the industry.
The report indicates that the increase in day rates is not uniform across all IT contractor roles. For instance, ETL and BI developers have reported rate rises of more than 50%, significantly higher than the average increase. However, day rates for audit and programme test managers have declined slightly.
The current trend for IT contractors' day rates in the City generally ranges between £450 and £1,000 per day. Factors contributing to these rate levels and recent changes include seniority and specific expertise, flexible working trends, project type and sector, IR35 legislation, and market demand and supply dynamics.
Higher day rates apply to contractors with niche experience or seniority, enabling negotiation towards the top of the range. Increased demand for flexible or remote working has led some employers to level rates irrespective of location, slightly reducing the London premium. Public sector projects may fix rates around £500 per day due to procurement rules, while private sector or fintech roles might pay more for specific skills. Many contracts are offered inside or outside IR35, impacting take-home pay and hence influencing daily rates contractors seek or are offered.
High demand for technical skills such as data analysis, BI development, and digital product management continues to support strong contractor rates. However, it's essential for contractors to compare their day rates against the wider market to ensure they are competitive and attract top talent.
Clarity's managing director, Adam Sztuka, advises organizations to monitor market rates to attract top talent. The budget cuts during the recession had a negative impact on IT contractors, but the current trend suggests a recovery and continued growth in the sector.
While the report does not provide specific figures for the increased day rates, a 3% per day increase over a three-month period is considered significant. It's clear that the IT contracting market in the City is experiencing a period of growth and change, with day rates reflecting this trend.
[1] FlexJobs [2] Computer Weekly [3] The Guardian
- The rise in day rates for IT contractors in financial services sectors, such as ETL and BI developers, can be linked to the increase in demand for technical skills like data analysis and BI development, which are crucial for businesses in the technology industry.
- The current trend of higher day rates for IT contractors in London is due to a combination of factors, including niche experience or seniority, flexible working trends, specific expertise, and market demand and supply dynamics, but it's essential for contractors to stay updated on market rates to ensure they are competitive and attract top talent.
