Contractor pay rates heading upwards

Survey finds greater demand is driving the trend

IT contractors’ hourly rate expectations have increased from $68 to $72 on average in the past six months, according to a survey by contractor placement specialist Crackerjacks.

In March, the firm analysed data from 2600 IT contractors on its books and found that for most IT roles, expectations of what the contractor will charge had gone up since the previous survey, in September.

Notable rate expectation increases include business analysts (up from $72 to $77), network administration (up from $82 to $92), project managers (up from $94 to $99) and software developers, whose anticipated rate was up from $68 to $71.

Crackerjacks managing director Tony Wai says the increase is being driven by the fact there are now more projects on the go.

“Talking to our clients, they are finding there is a drive towards trying to create greater efficiencies and productivity gains,” Wai says.

An example is that many firms are engaging in projects such as creating portals, which is driving demand for software developers.

“Looking at the number of contractors in that area, it is clear that software developers are being sought to get those projects underway and completed.”

Website developers also reported an increase in rate expectations, from $43 to $47.

Wai says the tentative economic recovery is causing many firms to re-think tight hiring policies they maintained during 2009.

“A lot of it is coming from companies going through the economic cycle and not being sure during the past 12 months where they are going.

“In the past six months, they have realised the world does have some certainty and that they need to make decisions about implementing strategic technology and getting people on board to do projects that create efficiencies.”

The much-vaunted skills shortage is still apparent, he says, but only in certain areas.

“It is there, but a lot of companies know who the good candidates are, and it is the ones with skills and experience that are commanding the high rates.

“The market has lifted generally, but there are some sectors within the market that haven’t seen it, such as those who are still junior and not what the market needs.

“For example, junior developers aren’t as in-demand as senior ones, those with experience in functional areas.” Wai says IT is the current “boom area” in contracting.

“It has the highest volume of contracts coming through”.

Crackerjacks also provides contractors for other industries.

Hourly rate figures quoted in the survey are at a direct rate, which is to say the amount the contractor invoices the client.