Growth in IT contractor demand grows again, amid ‘sense of optimism’ in January 2023

Demand for IT contractors in January 2023 grew by a solid three index points.

The reading, by the Recruitment & Employment Confederation, means growth in IT contractor demand has now increased for two months in a row.

Published in the confederation’s Report on Jobs, the reading also means that IT contracting passed with flying colours “the test” which the staffing body said January represented.

‘Sense of optimism’

In fact, following the short month of December, and a flaky November where temporary tech skills demand came close to falling flat, January is cause for “a sense of optimism.”

REC’s Neil Carberry elaborated on his verdict: “This will reflect activity that may have been delayed from the autumn, but it is another sign of firms feeling confident to hire.

“Even if they are leaning more to temporary hiring than normal in this uncertain environment, that is the power of our temporary work market.

“It gives us a way to ensure firms can grow and people can build their careers even when the picture is uncertain.”


As well as “uncertain,” the jobs market is still “volatile” according to professional services firm KMPG, which co-authors the monthly report.

Despite the cost of living continuing to place upwards pressure on pay, and job security causing low candidate supply, KMPG’s Claire Warnes agrees that January’s billings are “reason to be cautiously optimistic”.

“I am on the job market [and] I am available,” a security manager declared proudly, continuing the optimism, despite being one of Zoom’s 1,300 laid-off staff.

Keeping positive, the manager, Stephanie Jaros continued: “I want to thank Zoom for the opportunity to learn from amazing experts in an insider risk operational environment.”

‘Softer demand’

Reassuringly for the contractor, ‘demand is there’ but it’s just “softer,” says Mr Carberry, the REC’s chief executive, posting online after the report’s publication.

And in the current labour market, which he said could be seeing a “shallower slowdown”, REC’s member agencies are seeing “firms struggling to hire to drive growth.”

“People that tend to become star performers are those for whom the new job represents some kind of logical career progression, or a [total] change of direction,” says a recruitment copywriter, advising end-clients on what ‘growth’ candidates might look like at interview. 

“These people tend to work harder because they’ve got something to prove. And, believe it or not,” continued the copywriter, Mitch Sullivan, “people who work harder have a habit of becoming star performers.”

‘Bring about stability’

In Report on Jobs, KPMG’s skills and productivity partner Ms Warnes said: “Recruiters and employers should be thinking creatively about how to attract and retain permanent hires to bring about stability.”

“Firms should be working…to get their offer [to candidates] right,” reinforced the REC’s Mr Carberry.

“But there’s room for government to support businesses to drive growth too– a case we will take to new secretary of state for business, Kemi Badenoch. On infrastructure, skills, mobility and welfare to work, there is much we can do to drive business success and people’s prosperity.”

‘Spring Budget 2023 should put the people stuff first’

On skills, the permanent and contract markets in January both had a “short supply” of the following eight — CAD; Cyber Security, Data Engineering, Data Professional, Development, Software and IT/Technology.

Unique to full-time opportunities was a scarcity of Python and Software Engineering.

Also in January 2023, unique to contract opportunities was a scarcity of Data Science, Digital, Technical Sales, SAP and Media.

Referring to Jeremy Hunt’s March 15th statement, the REC said: “Ahead of the Budget, the chancellor should put the people stuff first across the whole of government. Every department has a role to play in getting growth going – and that starts with enabling our labour market.”

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