IT Contract Rate Hikes? Issues for Recruiters and End-Clients

There have been a number of articles written recently implying that IT contract rates globally but more specifically in the UK are on the increase. Along the lines of: . Suggestion is that this isn’t an across the board increase but it is noticeable nonetheless.

This is going to pose issues for both recruiters and end-clients.

Recruiters are not going to want to lose placed candidates, as candidates jump ship in order to cash in on increases elsewhere. So they are going to have to be able to confront their clients and somehow convince them that they are going to have to pay current market rates rather than 2009 rates. Quite a difficult proposition when the client knows the recruiter has a vested interest in any rate increase.

End-Clients quite obviously don’t want to face increased labour costs as they struggle out of the recession but on the other hand don’t want to lose valuable contract staff in the midst of current projects. Are the demands for increase rates not only viable but also realistic? They will understandably be loath to believe the recruiters spiel about an upswing in the contract market.

Be interesting to see how this plays out in both the short and long term. My feeling is that short term the End-Clients should be able to stave off rate increases for those in-contract as contractors will still be uncertain of their ability to quickly secure higher paying contracts. However, for any new hires they will have to stump up the higher rates as the market picks up pace.