IT Contractors – demand on the rise?

Contractors under lockdown

It can’t be denied that the delay of the Off-Payroll legislation has given contractors a welcome respite and provided their clients with more time to implement processes for assessing status or look at alternative models. However, the Covid-19 crisis which prompted the postponement, has caused harm to not only the economy, but to contractors in particular.

As companies implement hiring freezes and spending cuts, many are reallocating internal resources and putting non-critical projects on the back burner which inevitably affects contractors. So whilst contractor demand was already dwindling due to Off-Payroll, the pandemic has pushed it deeper into negative territory. And to make matters worse, contractors operating through their own PSC cannot access the benefits of the Government’s Job Retention Scheme, other than possibly benefiting from a small salary.

IT contractors in demand

Yet there is a sliver of light on the horizon for contractors. The exclusion from the Job Retention Scheme demonstrates contractors’ independence and the “taking of financial risk” which are clearly IR35 indicators.

For IT contractors in particular, there is more good news. It seems that the UK’s tech industry will maintain resilience despite the Covid-19 outbreak. Accordingly to recruiter Robert Walters, in Q1 of this year, permanent job vacancies in the tech sector increased by +32.56%, and contract tech roles increased by +48.27% – when compared with the same period last year. They also state that the tech sector has experienced a spike in demand and no immediate impact has been felt regarding hiring freezes with tech job vacancies up.

Milestone-based projects on the rise

It would therefore seem that despite all the doom and gloom during this difficult crisis, IT projects are going strong, particularly for business-focussed or critical roles with tech. This is especially the case as remote working increases and digital infrastructure has become the focal point for many internal business structures. In the midst of such an unprecedented crisis, there has never been so much emphasis on improved security, CRM systems, website capabilities and enhanced accessibility and use of data. In the next few months, we should see competition increase in particular for qualified IT consultants, programmers and support staff to help companies facilitate the new way of working.

IT work is also particularly conducive to the SOW model as it is usually project-based with defined deliverables, milestones and acceptance criteria. As clients remain nervous of their responsibilities under Off-Payroll, despite the year’s reprieve, more of them are realising the benefits that a properly structured outsourced service can provide. So, if you are an contractor (IT or any other sector), delivering services under a SOW, this could be a great opportunity to bed down that model.


If we can help you with the legal, operational or financial aspects of working under a SOW, please contact info@wttlegal.co.uk