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IT contractors prosper from Brexit uncertainty

Since the Brexit vote, IT contractors have seen higher pay rates and longer contracts, which indicates businesses’ caution over permanent recruitment

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IT contractors have seen their pay rates increase and are working on longer projects since the UK’s EU membership referendum, in a hint that business are being cautious about the future.

With uncertainty over prospects for businesses when the UK leaves the EU, hiring contractors is less risky than making long-term investments in permanent staff.

The figures, from accountancy firm Nixon Williams, which questioned 600 IT contractors, show that 20.5% of them have seen their daily rates increase, compared with 19.5% just before the referendum on 23 June last year. Meanwhile, 16.6% of contractors have recently had their rates reduced, compared with 18.6% before the referendum.

Derek Kelly, CEO at Nixon Williams, said the current uncertainty was likely to be less damaging to contractors than to permanent employees. “Employers are likely to be reluctant to commit to permanent hires, and any business transformation projects related to Brexit will be of limited duration and will require highly specialised skills, making them ideal for contractors,” he said.

In terms of the IT skills most in demand, the survey found that cyber security skills were top of the list. Kelly said a predicted shortage in cyber security skills would lead to multiple contract offers and bidding wars for people with the right skills.

“As ever, IT professionals with the right skills will find themselves in demand and able to negotiate rate increases,” he said.  

Just over 30% of IT contractors said they felt negatively about the UK leaving the EU. This was down from the 37.8% who said so just after the referendum result.

The survey also found that more IT professionals are contracting for positive reasons, rather than because they are struggling to find permanent work.

Separately, the soon-to-be-introduced IR35 anti-tax avoidance reforms could prompt a mass walkout of IT contractors from the public sector, research suggests.

The changes, due to be introduced on 6 April, will see public sector organisations assume responsibility for deciding how limited company contractors should be taxed. At present, the onus is on contractors to declare themselves “outside” of IR35.

As previously reported by Computer Weekly, the changes are known to have prompted walkouts at a Ministry of Defence agency, months before their formal introduction.

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