Is The Demand For IT Contractors Increasing In 2025?

In my last IT contract market update, I stated that in 2025 we will likely see a few glimmers of hope for improved market conditions and a conservative increase in demand for IT contractors. I am thankful to say – and I’m sure UK IT contractors will be happy to hear – that I’m able to report a similar level of optimism. Despite the continual decline and imbalance the IT contract market has experienced over the past few years, we are finally seeing stability and small amounts of growth for UK IT contractors in 2025.

Boosted by a stable economic outlook and many companies no longer able to keep delaying much-needed tech projects and upgrades, there are more opportunities out on the market for UK IT contractors at present, and I’m hopeful we’ll see this upwards trajectory continue as we move further into 2025.

IT contract market review

To give context to the changes we are seeing in 2025, it is important to briefly discuss how the market has performed over the past 5 years and the macroeconomic factors that we are still seeing the consequences of today.

Post 2020

Global economic, social and political changes have shaped the workforce post-Covid. In 2021 and at the start of 2022, we saw a candidate-led IT contract market with organisations keen to invest in digital transformation and the cloud as they adapted to the new ways of working post-Covid, with a particular focus on supporting remote working capabilities and the capacity to operate globally.

However, geopolitical turmoil and economic decline in the years since have heightened business costs and lowered profits. In the years between 2022 and most of 2024, the contract IT market saw demand for IT contractors decline month-on-month, with many facing longer periods out of work than usual.

2024

The first half of 2024 was a similar story of decline that we witnessed plaguing the IT contract market since 2022. During this time period at VIQU IT, we saw:

• The number of contractors out on assignment decrease
• The amount of live contract requirements fall
• A continuation of mass tech redundancies
• 325% increase in the number of CVs received between the period of 2022 to 2024

However, by Q4 2024 we saw this decline start levelling out. I certainly wouldn’t call it an increase or a return to normal, but a slowing down of the decline. I believe this was due to businesses starting to realise that IT projects cannot be delayed forever and whilst the economic situation hadn’t vastly improved, with elections won and budgets announced, there were no more surprises for organisations that could severely derail planned projects.

IT contract market Q1 2025

Hints of a better market and increased demand for IT contractors came in early 2025 as the REC announced an upwards trend in the market for contract tech roles. This was the first time we’d heard this since August 2024.

Whilst the UK economy did not grow in January 2025 and the predicted growth for 2025 has been reduced from 2% to 1%, the economic climate did not look as unstable as it did in previous years. February 2025 saw marginal growth of 0.5% and with predictions that the Bank of England will reduce their interest rates 3 times in 2025, this gave businesses hope of some much-needed relief. This improving economic outlook in Q1 2025 helped to install greater confidence in businesses and allowed them to invest in their tech teams once again.

As we advance through Q2 and approach Q3, there are rumblings of uncertainty from Trump’s ever-changing tariffs and how they could have a knock-on effect on the UK economy. However, currently, there are no signs that it will pull us back into a recession or cause the IT sector to go back into decline.

In the first half of 2025, we have seen signs of improvement in the contract IT market through our internal metrics, with a 10% increase in our contract book over this period. With the rise in employer costs only just taking effect in April, it will be interesting to see how much of an effect it will have on the contract IT market, with perhaps more businesses considering contractors over permanent employees.

Demand for IT contractors to continue rising throughout the rest of 2025

According to a recent survey, half of UK businesses plan on increasing their temporary workforce this year and this is certainly reflective of my conversations with clients. Many organisations I know are planning to take on more temporary resources than normal, and we do forecast our contract book to continue on an upward trend this year.

Alas, whilst we are predicting companies will increase their contract resources this year, we do not expect a return to the 2022 candidate-led market. There will still likely be high competition for generalist roles and some contractors may still struggle to secure the contracts they’d prefer to work over less attractive opportunities.

Contractor IT market trends in 2025

Technical specialists will do well

Technical contractors who specialise in a particular tech stack, or in a particular industry, will always do well, and in these times where competition for each role is so high, they are the ones who are standing out from the crowd and are securing opportunities with more ease. Companies want to hire individuals who can hit the ground running, and specialists with experience in niche areas will be able to do that.

Generalists will need to be proactive

Whilst opportunities are forecast to grow this year, the high amount of candidate availability means that contractors will need to continue to be proactive in their job search.

This might include:

• Investing in training and development opportunities
• Attending networking events
• Pulling on their network and contacts from previous workplaces
• Ensuring that they are selling themselves effectively
• Securing work that might take their contract careers in a better direction in an area that’s set for high demand in the future

Trending technologies in 2025

There are certain new and developmental technologies which are creating opportunities for contractors and tech professionals in the sector. In order to maximise their future job prospects, some contractors may like to start honing their skills or carve out a specialism in one of the following areas:

Agentic AI

Agentic AI systems are a growing development within AI technology. These systems have the ability to act without human intervention and have control over their actions and services. This emerging AI technology is quickly growing in popularity for use in self-driving cars, robotics and virtual assistants.

Job role examples: AI engineers, market learning specialists and AI product managers

Post-quantum cryptography

While quantum computing will not likely be fully developed until the next decade, it has caused concern in the industry of how it will affect our current cyber defences. Organisations have been urged to start planning for a post-quantum world and ensuring their defences are not relying upon encryptions that will be easily breakable by the new technology.

Job role examples: Security engineers, cyber security consultants, quantum security researchers, quantum network architects

Spatial computing

Spatial computing is an umbrella term for virtual reality, augmented reality and extended reality. It combines machine learning and the Internet of Things to create immersive experiences and blends the real world with digital. It has a wide range of uses from educational and workplace training to entertainment.

Job role examples: Spatial interaction designers, senior technical services engineers, senior python developers, spatial computing project managers

Overall, many contractors will find the 2025 IT market easier than previous years. Businesses are expecting to increase their investment in IT, so I believe we’ll see a jump in demand for IT contractors, particularly those with niche skill sets.

The past few years have, by far, given us the toughest market conditions we have ever experienced as a business. However, we are finally seeing a light at the end of the tunnel.

If you are an IT contractor looking for opportunities in 2025, VIQU IT is an award-winning contract IT recruitment agency, please get in touch with our team here.