Recruiter Hays sees flat rates ahead for most tech contractors

Recruitment firm Hays survey in its guide of over 60 IT contractor roles show that rates are flat, and if inflation is taken into account, indicate a small drop for the 2023-24 financial year.

Hays pointed to large staff cuts at the major technology companies such as Google, Meta, Microsoft, and Amazon as one driver for daily rates being flat; in Australia and New Zealand, Hays said that large organisations having finalised extensive digital transformations and enterprise resource planning projects was another driver.

Due to this, change and project managers are not in demand as much as in the recent past, and command lower rates.

Hays said typical rates in the ERP and customer relationship management space have dropped by 11 per cent as businesses' digitisation has moved to maturity.

Business analysts and have seen their daily rates top out, Hays noted.

Offshoring, a trend that was reversed during the pandemic is also making a comeback, Hays said.

This is down to remote work having demonstrated feasibility of utiliising talent irrespective of geographic location.

Also, tight local job markets have motived organisations to search wider for capacity and capability.

The outliers among tech contractors are security penetration testers, who have seen rates go up by 12 per cent.

Software developers and testing/quality and assurance managers are also enjoying higher rates, at six and 6.6 per cent respectively, Hays noted.

In light of its recent findings, Hays is recommending contractors to keep their skills up to date, protect against automation through artificial intelligence, and be flexible with where they work.

Contractors should also look for projects that interest them, for more satisfying work, and to keep up with market rates to gauge what their skills are worth.

The flattening of contractor rates doesn't change that the shortage of technology skills will remain for some time, Hays said. 

To attract contractors in arears that are in demand, business should be flexible working location arrangements, promote interesting projects, and create a world-class employee experience.