IT demand leapfrogs other sectors
Demand for freelance and permanent IT workers leapt ahead of rival industry sectors last month, according to the Recruitment and Employment Confederation (REC).
The Confederation's monthly Report on Jobs shows demand for IT freelancers overtaking the Engineering and Construction and Accounting and Finance sectors, to take sixth place, out of eight.
The permanent IT sector also jumped ahead to fifth place, leaving the Accounting and Financial; Executive and Professional and Nursing and Medical sectors trailing behind.
Both freelance and permanent IT sectors ranked eighth last month, where they have almost invariably resided throughout 2001 and 2002.
Author of the report, Richard Harding, said although the IT sectors' apparent hike up the league tables appeared to represent growth, the reality is that demand within the sector is continuing to fall.
"Nevertheless," he added, "there is good news...
"The sectors that IT has 'overtaken' are experiencing more dramatic falls in demand. But the fact the rate of falling demand for IT workers is becoming more subdued by the month potentially means the IT sector will break through the 'no change' barrier to enter actual growth in the third quarter," he explained.
"The IT sector will enter actual growth in the third quarter if there are no surprises in the meantime" - Richard Harding, REC Report researcher
The freelance IT sector rose two places to take sixth place in November. However, the following month it sank back down to eighth place.
The climbing of both the freelance and permanent IT sectors, by more than two places, has not occurred simultaneously since Summer 2001.
In the rest of the report this month, recruitment consultancies indicated a further rise in the average hourly rates of pay for freelance workers across all sectors. However, the rate of increase eased for the sixth successive month to the weakest since December 2001. Agencies attributed this to 'growth of worker availability outpacing that of demand,' as well as to 'pressure from clients to reduce rates in the face of strong competition.'
There is more about the behaviour of IT freelancers' rates in relation to supply and demand at agencies in the UKTECH feature: 'The Agency Low-down - Part 2: Rates and Margins.'
No surprises means upturn by Q3, REC says
Availability of freelancers across all sectors rose for the twentieth consecutive month running in December. However, the rate of improvement eased for the third month in a row from the recent peak seen in September to the slowest since June 2001.
Agencies' weekly billings for freelancers rose for the 12th month running in December. But, the rate of growth was marginally less marked than the previous month's four-month high. Agencies' demand was again the strongest for workers at the lower end of the labour market.
Only CAD Programmers were listed as being in short supply in the freelance IT sector.
In the permanent sector, staff placements rose for the tenth consecutive month in December. Nevertheless, the rate of growth was only modest and less marked than has been seen in the previous two months. Agencies generally linked hesitancy at client companies to hire new personnel to 'the uncertain economic outlook for 2003.'
Growth of average pay rates for permanent employees remained subdued. Nevertheless, permanent salaries rose for the third month in a row, with the rate of increase the fastest since June.
Gareth Osborne, REC's new Chief Executive, said: "Although there was a slight growth in demand for temporary workers and freelancers, it was not as high as expected for December. Meanwhile, whilst there was a rise in the availability of people looking for work, pockets of skill shortages remain.
"Looking forward to 2003, it will be interesting to see what impact the NI increase has on jobs. The public sector continues to underpin demand which in the longer term is not a healthy situation given the continuing retraction of private sector employment."
The 'The Agency Low-down - Part 1: Where the work is...', quotes examples of agencies having much success in placing freelancers in the public sector at the moment, as mentioned by the new REC chief.
According to Jobstats, the average rates advertised are £21 per hour for IT freelancers and £35,600 per annum for employees.
The five most popular skills:
Management 32.9 per cent - £25 per hour, £40,400 per annum
Support 25.8 per cent - £17 per hour, £31,400 per annum
Analyst 18.7 per cent - £23 per hour, £35,000 per annum
Design 17.5 per cent - £30 per hour, £38,400 per annum
Finance 15.5 per cent - £31 per hour, £43,800 per annum
The five most popular locations:
London 27.2 per cent - £22 per hour, £41,100 per annum
City 6.4 per cent - £20 per hour, £47,900 per annum
Berkshire 4.6 per cent - £16 per hour, £38,500 per annum
Surrey 4.2 per cent - £20 per hour, £35,800 per annum
South East 3.8 per cent - £34 per hour, £38,800 per annum
(Note: Hourly rates refer to freelancers, annual figures to permanent workers)