Is The Demand For Temporary IT Recruitment Rising?

IT professionals working at a computer happy in the knowledge that temporary IT recruitment market is rising in demand

Whilst recovering from the aftershocks of the pandemic, temporary IT recruitment has seen dizzy heights and dark lows in recent years. The dynamics of the workforce and the strategies businesses are taking to technology have faced seismic change in the years immediately following 2020, and we’re still adjusting now.

After the initial effects of the Covid pandemic, the sharp rise in the use of the cloud to support remote workforces, and later the expansion of AI technology to increase productivity, motivated businesses to undergo large digital transformations, which created a high demand for permanent and temporary IT workers. However, the ensuing recession and cost-of-living crisis felt both in the UK and abroad at the end of 2022 / 2023, often enabled a hesitant and cautious attitude from businesses towards investing in IT projects and engaging temporary IT professionals and contractors. Will the rest of 2024 and 2025 be better for the temporary IT recruitment market?

The state of temporary IT recruitment: Why was 2023 such a poor year for temporary IT workers?

It is generally agreed that the UK IT recruitment market faced a technology recession in 2023.

Tech layoffs gained significant momentum in 2022, and they continued to plague the market last year as well. Firms such as Etsy, Spotify, Amazon, LinkedIn, Meta and many more made mass tech redundancies. The hundreds of thousands of IT professionals who were laid off then flooded the market.

In comparison to the years leading up to 2022, where we experienced a candidate-led market and businesses needed to work hard to attract top talent, it switched to a client-driven market. Fewer IT jobs were available, meaning more professionals were competing for each position. In fact, last year, statistics showed that IT contractors, especially generalists, struggled to find work, with 21% of contractors reporting that they were between roles.

Additionally, due to the tech recession, the number of start-ups fell. Statistics showed that global start-ups reduced by 40% and were at a 5 year low. At the time, most experts put this down to investment in tech falling by 57% in the first half of 2023. The high interest rates at banks caused investors to put their money in the bank and they chose not to invest in often temperamental tech start-ups. All of this caused a snowball effect which led to fewer projects and a reduced need for temporary IT professionals.

Rising hope in the first quarter of 2024

Like the difference between night and day, Q1 was a fantastic quarter for many in the tech sector in comparison to 2023. In fact, it was the best performing quarter for VIQU in 3 years. The UK tech market saw an 11% rise in new tech incorporations – a 5 year high. The ONS also announced that in the quarter, the UK finally emerged from its recession, with 0.7% growth.

All of this meant that Q1 24 was a much more hopeful quarter for the temporary IT market. In fact, contractors starting new contracts via VIQU grew by 23% between January and May 2024. Our data also showed that the number of temporary IT job seekers approaching us for a job fell by 22% in the quarter than Q3 of 2023, which suggests that more IT contractors were either on assignment or not looking for work.

Whilst we did not see any change in pay rates in Q1 of 2024, that is not necessarily a bad sign as they had been declining throughout 2023, so whilst a plateau in rates was not great for temporary IT workers, especially those struggling to find work, there was not a continuation in the decline.

A decline in fortunes for temporary IT workers …

Unfortunately, the good news of Q1 did not last. Whilst inflation fell to 2.3% in this period, the lowest in 3 years and close to the Bank of England’s target of 2%, we found that businesses continued to take a cautious approach to their hiring in this quarter. Although, inflation was still significantly lower than Q2 23, where inflation was at 8.7%, other macroeconomic factors affected the market.

The Russia/Ukraine conflict as well as anxiety over the potential impact of the UK and US election results meant that the IT recruitment market slowed during this quarter. At VIQU, we found that our performance was only around 80% of what we achieved during Q1 24.

Whilst official statistics from the ONS will not be released until August 2024, I believe that the economy shrank in this quarter.

What does the future hold for temporary IT recruitment?

Whilst issues that plagued the IT market as a whole in Q2 2024 remain in part, we’ve seen evidence of increased growth in previous last two quarters of this year.

There are big tournaments planned in the next 2-3 months, including the Euros and the Olympics. These events often help to boost the economy massively with more people spending money, which results in higher confidence.

Furthermore, whilst businesses have been cautious about starting IT projects up until now, I have spoken to many clients who have informed me of their plans to kick-off projects as summer begins. After all, IT projects are not something that can be put off forever and many projects overhauling legacy tech have been delayed too long.

This prediction is further corroborated by surveys that show that 42% of businesses in the tech sector are planning on hiring new employees in Q3. Time will have to tell if this comes to pass.

Predictions for next year

Along with the last two quarters of 2024, I’m expecting great things for 2025. With interest rates expected to drop further, this will likely relate to higher investment and more funding for businesses and start-ups. This is great news for temporary IT professionals who may find more projects available to engage with. The market may seem uneasy now, but I am confident that we will see a much more positive end to 2024 and a better 2025.


If engaging the skillsets of temporary IT workers is part of your business plan for the rest of 2024 consider contacting our team. VIQU is an award-winning IT recruitment agency with years of experience helping organisations secure great IT talent. For help and assistance in finding the best talent for your business, get in touch with our team here.

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