Are IT Contract rates on the slide?

IT Contractor Pensions
See why pensions are the "last great tax break" for IT Contractors - Find out more.

Are IT Contract rates on the slide?

Published on Sep 23, 2008

With the media reporting 24/7 doom and gloom on the UK's economic prospects, is there any evidence that rates have started to drop within the contracting industry?

A glance at IT Jobs Watch would suggest that the average daily contract rate for most IT skill areas is lower than it was last year.

According to the job market site, the generic "analyst" role has seen a 2.16% drop over the past 12 months, whilst "developer" roles are down by 5.97% (but they are still recording an average £401 daily rate over the past 3 months).

Similarly, job ads related to "SQL" have displayed daily rates 5% lower than the same time in 2007.

IT Contractors into "Radianz" should be happy however, since their average daily rate has rocketed by 196% over the past year. Similar rises have been recorded for niche skill areas, however the sample sizes are very small.

Jobstats also suggests that average contract rates are on the way down again.

Having risen rapidly in the run-up to the millennium, average contract rates sank equally fast before bottoming out in early 2003 at between £25 to £30 per hour.

Since 2003, rates have steadily risen each year before flattening out towards the end of 2007. Now, the median rate seems to be ticking down - it is currently at the £36 level, an 11% drop on August 2007.

Although the Jobstats graphs are reliant on data from recruitment ads placed on job search sites, they do represent a good overall picture of rate trends.

It is probably too early to say whether rates are going to drop significantly over the next year or so, but for now rates seem to have flattened out with modest declines in many skill areas.