Day rates are rising for contractors across the UK, particularly for roles within the cyber and cloud areas of technology, according to new research found in Hays’ UK Tech Contractor Day Rate Guide 2023.

The findings reveal that almost two thirds (61%) of employers increased contractor day rates over the last year, which is the same amount (61%) of employers who predicted that their contractor rates would increase last year.

Overall, there was a 3.3% average day rate increase over the last year and cyber roles continue to see the highest day rate increase, by an average of 5.8%, followed by cloud roles (5.2%). In the year ahead, 65% of employers expect day rates across the technology sector to increase again.

Skills shortages continue

Tech talent is in high demand, as 9 in 10 organisations faced skills shortages last year and over half (53%) of employers expect to face a shortage of suitable applicants in the next 12 months.

Cloud and infrastructure (53%), data and analytics (42%) and cyber security (38%) continue to be the most in-demand specialist skills sought after by employers, which has remained the top skills employers most need since last year.

The research also found that AI skills uncertainty is emerging, as 85% of organisations do not have access to the right skills to enable their investment in AI. Many (69%) contractors are eager to future-proof their careers, and plan to upskill in AI in the future.

Importance of flexible working

Aside from pay, being able to achieve a work-life balance is most important to contractors today (47%). When considering a new role, 78% of contractors say the opportunity to work from home or remotely is an important consideration.

Ian Storey, Director at Hays specialising in Technology, comments: “As our research shows, whilst we have seen a softening in overall demand for IT contract resource, day rates do continue to rise.

“Whilst most were below inflation rates, we did see strong rate rises in key technology niches, due to the continued high demand for niche skills in the UK market, as well as the cost-of-living crisis becoming an even more significant factor.

Recommended

• “Bronze Age to Space Age”: Ancient Cremation Site Found at Spaceport
• What are the Benefits of Investing Rural Scots Mobile Connectivity?
• What’s the Current State of 5G, 4G, and 3G in the UK?

From an employer perspective, there are currently more contractors available in the market than 12 months ago, hence a better opportunity to access niche talent in key areas.

However, employers must take note of what contractors prioritise most today and highlight their flexible working offering and organisational purpose, in order to compete for top talent in a skills-short market.

With the recent emergence of generative AI, contractors who are proactive in upskilling in AI could gain a competitive edge in securing positions. Positively, over two thirds (69%) of contractors plan to upskill in AI; these professionals will benefit from developing AI skills to help future-proof their careers.”