Skills shortage in IT ‘could cause surge in contractor demand’

Friday 6 June 2014

Recruiters have warned that skill shortages in the IT sector could boost contractor demand, as many firms are reluctant to offer permanent contracts.

The Recruitment & Employment Confederation’s (REC) latest monthly report on jobs demonstrates that growth in the demand for permanent IT employees dropped from 69.6 to 68.5, while the market for temporary professionals rose from 63.7 to 64.

According to previous months, demand for permanent IT job candidates has fallen for the second month in row, while the number of their skills on the ‘scarce’ list has nearly doubled. This means a window of opportunity has opened for IT contractors as they come with the skills companies need and are only temporary employees.

Further research from the REC and KPMG revealed that employers are finding it challenging to fill certain roles, even though over two million people are still unemployed.

In response to the skills shortage, Bernard Brown, partner and head of Business Services at KPMG, said candidates are failing to offer the appropriate assets to companies or are “preferring to hide in the shadows”. This is causing employers to become frustrated as progress is stalled.

“Trying to fill vacancies in the current climate must feel like wandering through a hall of mirrors for the UK’s employers. No sooner are they in a position to reflect the improving economy by creating roles and offering tempting salaries, than the search for talent seems to reach a dead end, with candidates either preferring to hide in the shadows or failing to offer the appropriate skills,” he continued.

Mr Brown also believes salary packages have a part to play in the shortage of appropriate candidates, as prospective employees want firms to “widen their offer” in order to attract them to vacant positions. He adds that this could mean employers need to reshape roles and working arrangements to suit staff needs or they risk being trapped in a continuing cycle of “unfilled roles and unfulfilled workers struggling to cope with increasing workloads.”

Kevin Green, chief executive officer of the REC, said: "The creation of these jobs, combined with the return of job fluidity, is creating a dynamic labour market. However, the big issue remains that employers are finding it hard to find the talent and skills they need.”

Traditionally, this vacuum of talent represents an opportunity for temporary workers and IT contractors that can come with the skills sorely needed in the industry.

Recruiters at Harvey Nash have also commented on the scarcity of skills, adding that when starting new projects, around 60 per cent of UK IT leaders can identify a gap in expertise on their team, a gulf that “is hindering progress”.

This situation is weighted heavily in the favour of IT contractors, who could easily plug the skill shortage hole that employers are currently experiencing. These individuals may also be able to ask for increased pay rates as they could be viewed as a necessity while employers attempt to find suitable full time candidates.

By Victoria McDonnell

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