Freelance IT climbs further ahead of other sectors

This month's REC Report on Jobs shows the freelance IT sector has climbed to take second place out of eight sectors.

The Confederation's monthly Report on Jobs shows demand for IT freelancers and permanent staff overtaking other sectors, continuing a trend which began at the beginning of the year.

Whilst the freelance IT sector now sits in second place, after Nursing/Medical Care - up from sixth place the previous month - the permanent IT sector maintained its position in fifth.

Both sectors habitually sat in eighth place out of the eight sectors for most of 2002.

Average weekly billings received by recruitment agencies from contract workers rose for the thirteenth month in a row in January. The rate of growth eased slightly compared to the previous two months, but nevertheless remained solid.

Consultancies reported that sustained growth of billings again reflected clients' preference for flexible workers in an uncertain economic environment.

However, agencies' margins on contract workers declined for the twenty-first successive month in January, as increased pressure from clients to reduce rates and strong competition continued to squeeze margins. Despite easing marginally, the rate of decline of margins remained marked.

After accounting for seasonal factors, average hourly rates for contract workers continued to rise in January. Nevertheless, despite being the fastest seen since last August, the rate of growth of pay rates remained modest. Recruitment agencies reported that higher pay rates were again paid to workers with certain key skills, although the rate of increase was subdued by high availability.

The only key freelance IT skills reported to be in short supply were: 'Programmers.'

The number of people placed in permanent jobs by recruitment consultants rose for the eleventh successive month in January. However, the rate of increase eased sharply and was weakest in the current upturn in staff placements.

The availability of suitable staff to take up vacant positions rose for the twentieth month running in January. The rate of improvement in staff availability was the slowest seen since June 2002, but nevertheless remained marked.

Average salaries awarded to people placed in permanent jobs rose for the fourth month in a row in January. Nevertheless, with consultancies generally reporting good staff availability, the rate of increase of salaries remained subdued and, in fact, was the weakest since last October.

Key permanent IT staff skills reported to be in short supply were: 'IT Sales Staff.'

Brett Walsh, Head of UK Human Capital at Deloitte & Touche, said: "January's Report on Jobs survey showed a further deceleration in the rate of growth of demand for staff, which led to weaker increases in permanent placements and temporary staff billings. Nevertheless, good staff availability continued to hold down wage pressures. Meanwhile, the Press Recruitment Advertising Index - the most widely recognised indicator of demand for staff at the upper end of the job market - recorded the slowest rate of decline in job ads for twenty-one months."

Gareth Osborne, Managing Director at REC, said: "This month's figures are the weakest since last October and reflect economic uncertainty. With employment falling and growth in demand weakening, business confidence doesn't look like it's returning in the short term. Without the option of flexible working, the employment figures would look much worse, demonstrating its importance to the UK economy and workforce."

According to the IT freelancers' jobs statistics site, Jobstats:

The five most popular skills are:

Management 32.2 per cent - £24 per hour, £39,600 per annum
Support 25.5 per cent - £17 per hour, £31,400 per annum
Analyst 19.0 per cent - £20 per hour, £35,000 per annum
Design 16.8 per cent - £30 per hour, £37,700 per annum
SQL 15.9 per cent - £30 per hour, £33,500 per annum

The five most popular locations are:

London 27.6 per cent - £24 per hour, £40,600 per annum
City 5.9 per cent - £31 per hour, £46,300 per annum
Berkshire 4.3 per cent - £25 per hour, £37,500 per annum
Surrey 4.1 per cent - £18 per hour, £36,200 per annum
South East 3.6 per cent - £31 per hour, £39,000 per annum

The latest hourly rates are:

10 per cent of adverts offered more than £40 per hour
25 per cent of adverts offered more than £32 per hour
50 per cent of adverts offered more than £21 per hour
75 per cent of adverts offered more than £13 per hour