Specialists in IT contracting enjoyed strong demand in January and February this year, but new data from the REC suggests that the hiring spree is cooling off.

In March, demand for contractors specialising in the IT skills market dropped to 52.5, a small but detectable fall-back from February’s score of 53.9 (the highest score in six months). In March 2011, IT contractors had topped the poll of most sought after temporary candidates, reaching a score of 63.8. They have now slipped into third place out of seven categories, narrowly missing second place, which went to freelance engineers.

However, PAYE umbrella techies need not feel personally affronted: the latest REC/KPMG Report on Jobs suggests contract billings in toto fell last month at a rate faster than that seen for over two and a half years. Demand for permanent IT experts remained strong, especially in areas such as CAM, CAD and development skills where there are full-time shortages.

The REC’s member agents believe that the slight depression in temporary contractor billings can be attributed to the cumulative effects of the Agency Workers Regulations. Recruiters for contractor and permanent staff frequently reported that hirers have responded to the AWR by converting formerly temporary roles into permanent ones.

Acknowledging the slight decline in temporary appointments, the REC’s Director of Policy and Professional Services, Tom Hadley, said:

“This may in part be linked to employer uncertainty over the Agency Worker Regulations, although it could mainly be due to the fact that increasing business confidence has resulted in more employers being prepared to take on permanent hires rather than temporary or contract staff.”

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