How is the contracting market in 2023?

All the daily conversations I have with clients or with candidates always reflect and evaluate the Contracting marketHow are you seeing it? Where is the opportunity? What skills are in demand? How are the rates?  

Given my role and the industry we are in, we are always keen to hear our clients take on things as our demand will be driven by them. With all the talk of layoffs and the talk of an impending recession, it did feel like things would inevitably slow, which they did – on the permanent side of the recruitment world. Subsequently, we saw an increase in the flow of new contracting requirements coming in. This occurred from November through to the end of January and could be attributed to several factors such as year-end, budgets, and all the other usual reasons.  

The expectation is that in times of uncertainty permanent headcount requirements can always be paused. This is true. Being the eternal optimist and working on the contracting side of the business, I am of the opinion uncertainty can be good for contracting. This has certainly been the case since November. A recent conversation with a senior figure in a large consulting firm has reinforced this viewpoint. Albeit some clients may choose the consultancy route over the contractor route.  

The demand is remaining consistent across the PM/BA skillsets as well as the Software Engineering. Noticeable increases have been seen in the DevOps skillset in the last 6 months also – although this may not surprise many.  

Additionally, a publication from Contractor UK echoes our own experience in the market for January, leaning toward cautious optimism.  

What we have seen in 2023 so far  

  • Contractor renewals are extremely high with above 95% being renewed.  
  • The number of requirements coming to us is maintaining. 
  • Lead time has lengthened from interviews to offer – could be due to hesitancy in the market in general. 
  • Candidates converting from permanent roles to go contracting have reduced (albeit not significantly). 
  • Demand for 12-month contracts is at an all-time high. 
  • Supply of 12-month contracts is not at an all-time high.  
  • Rates are maintaining. 

Now, why am I writing this article? I guess it is to try to convey a sense of optimism in the market that is currently seeing lots of layoffs from Big Tech. While this is no doubt a very difficult transition period for those affected, I am speaking purely with my contract recruitment hat on. Outside of the fact that while there may be a slight softening at some stage, we are seeing signs of the contractor market maintaining for the foreseeable.  

Job trends 2024

I am having more conversations with clients who are looking to explore or even just gather more information on the contractor market and process given some of the challenges around permanent headcount. My role is to advise and present the contractor route as a solution to our clients who still require projects to be delivered.  

If this is you then do reach out, even if it is just to gain a better understanding of the area. We can provide a turnaround within 24 hours depending on the complexity of the request. Enough of the sell for now.  

Demand is still there if you are thinking of becoming a contractor and leaving the security of a permanent job. Just do your research and speak to the agencies (or rather our recruitment company 😊) to get a feel for what’s on offer. 

Kenneth O’Connor

Head of Contracting