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IT Contractors forecast 10% rate hike in 2007

Published on Jan 29, 2007 | | Contract Rate Checker

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More than half of the UK’s IT contractors expect an inflation-busting pay hike of at least ten cent in 2007. This is a key finding of the second annual Contractor Expectation Survey, carried out by JSA, specialist accountants for IT contractors. The survey aims to gauge the ambitions and plans of IT specialists for the coming year.

58% of JSA clients surveyed said they expected to earn at least a double digit rise in earnings, and of these, a third said they aimed to gain a 15+% rise in take home pay. Despite this, 50% of the contractors who answered the survey thought that, at best, the IT contractor market would stay static in 2007 and 9% thought it would actually shrink

The survey reveals a generally high satisfaction rate with contracting, with only 18% of respondents saying they would like to return to full time PAYE employment. On a scale of 1(being very unhappy) to 10 (being extremely happy) as a contractor, 77% rated themselves at 7 or above. However, at the same time, 80.5% would like to find more challenging work in 2007. IT contractors are also shown to be generally self-confident about their approach to work, with 95% claiming to be good decision-makers.

While 74% of respondents said that the current opt-out clause in the EU Working Time Directive, which permits member states not to abide by a maximum 48-hour working week, should be retained, 61% said they would like to work less hours, with nearly half saying they would like to spend more time with their families. This may be because 90.5% of respondents are married or with partners and 70% have children.

Participants in the survey were also asked whether they had knowledge of any of the ten programming languages which were recently highlighted as the ‘must have’ skills for 2007 by E-week.com. The results showed considerable skill shortages.

1. PHP - 6%
2. C# - 11.5%
3. AJAX (Asynchronous JavaScript and XML)- 9%
4. JavaScript - 17%
5. Perl - 7%
6. C - 15%
7. Ruby and Ruby on Rails - none
8. Java - 16%
9. Python - 2%
10. VB.Net (Visual Basic .Net)- 16.5%

Although some top IT freelancers are using talent agents to get highly paid positions, only 1.5% of respondents say they used such agents. However, 43% said they would consider doing so in future.

For the first time, the survey asked a number of questions about contractors’ working patterns and leisure time, which revealed that:

• Although only 12% regularly work from home, 62% have a dedicated domestic office
• Only 22% of those who work from home ever feel isolated
• 53% do not like having to work evenings and weekends.
• 60% have one major outside interest/hobby.Gym/fitness, golf and computer games are the most popular. Other interests listed include angling, horizontal aviation, steam railways, flying, racing, photography, landscape painting, ten pin bowling, snooker, rugby, badminton, travelling, DIY, property, martial arts, yachting, snowboarding, music and scuba diving.
• One in five prefer adventure holidays to ‘chilling out’
• The USA is the favourite holiday destination for 17.2%. Other favourites include France, (15.5%) South America,(8.6%) Caribbean(8.6%), Greece,(6.8%) South Africa, (5.1%) Austria, and Devon (3.4%). Others destinations mentioned include Portugal, Italy, Suffolk, Norfolk, Cornwall, Jersey, India, Maldives, Cuba, Malaysia.

Barry Roback, Chief Executive of JSA commented: “IT contractors have a strong sense of their own self worth, and the fact that they expect inflation-busting pay rises, is probably a realistic assessment of their current market position. This push on pay rates is likely to be further fuelled by the Treasury’s recent move to close down managed service companies, which will result in take-home pay being reduced for some under the proposed regime. This will inevitably lead to demands for higher gross rates, in order to leave contractors in the same net position, as happened after the introduction of IR35. One way or another, end-users are going to be asked to pay more for the services of IT contractors than they did in 2006.”