Higher fees tempt contractors

Lucrative fees have tempted an increasing proportion of UK IT workers into becoming contractors, according to silicon.com's 2006 Skills Survey.

The survey found that freelancers who have no desire to become permanent employees now make up 10 per cent of the IT workforce - up 2.6 percentage points since last year.

Rising pay is one of the factors that has lured workers into the contractor lifestyle and the Skills Survey revealed more IT contractors are now earning high annual fees.

This year 13 per cent of contractors earned more than £110,000 - up from five per cent in 2005 and two per cent in 2004. The percentage of IT contractors bringing in £70,001 to £110,000 also rose to 26 per cent in 2006 - up from 17 per cent in 2005 and 10 per cent in 2004.

But it seems the workers who want to become contractors have already done so, as the percentage of permanent employees wishing to make the move to contracting has fallen back to seven per cent of the IT workforce after three consecutive years of gains from 2003 to 2005.

The majority of workers - 68 per cent - remain permanent employees who do not want to change their status.

Meanwhile the percentage of the workforce which is unemployed and claiming benefits hit two per cent this year, up slightly from 1.8 per cent in 2005 but down considerably from the post dot-com bust days of 2004, when unemployment hit 5.3 per cent.