There looks set to be a surge in IT professionals opting to become contractors, as it has been revealed that a growing number of specialists in the field are choosing to work for themselves.
Research from professional services consultancy firm Procorre shows that self-employment in the industry has increased by 48 per cent over the past five years, with the number of contractors rising from 143,000 in 2009 to 211,000 in 2014, making the sector the fastest-growing in terms of workers opting to become their own boss.
Contractors have always been highly sought after in the IT sector, even more so as technological advances take place and the world becomes increasingly reliant on computerised devices.
However, as the IT industry evolves and different areas require workers with specific digital skills to carry out one-off or short-term tasks, contractors in the field are only going to find themselves in even more demand.
For example, analysis from recruitment site Technojobs showed that cyber security contractors are increasingly sought after, with a 100 per cent rise in demand for individuals with such expertise between December 2013 and December 2014.
Many people tend to opt for contracting due to the significant benefits it can bring, including the ability to negotiate their own pay rate and working hours, as well as the high level of flexibility it provides, allowing for a successful work-life balance.
Yet in this case, Procorre suggests it is more the needs of businesses than personal choices that are driving the shift in employment status for IT specialists.
The firm found that more and more companies are increasing their spend on IT, bumping the area up in their budget priorities, following a period of cost-cutting when it was not necessarily seen as the most important factor to focus on.
But as the country's economy recovers, businesses are beginning to recognise that upgrades are needed to their current systems to ensure in-house efficiency and customer service can both run as smoothly as possible.
Relationship manager at Procorre Sophie Sarratt commented: "It is estimated that investment in IT will be one of the fastest-growing forms of capital investments for businesses, which is a big turnaround after IT budgets were frozen for so long."
She went on to add that many firms' systems may not be up to the job if upgrading them has not been a priority over the past few years.
Ms Sarratt explained: "Many businesses will not have upgraded their IT infrastructure, which is now outdated and in desperate need of an overhaul to bring it up to scratch.
"Continued failure to address this may end up hitting a business' productivity and eventually profits. Businesses will require IT specialists for the project management of the upgrade, as well as contractors with a high level of technical skill to help build the project."
What's more, Procorre found that IT workers with expert knowledge of apps are increasingly sought after, particularly in light of the fact this sector is estimated to be worth in the region of £4 billion in the UK alone. This is expected to increase to £31 billion by 2025, indicating that demand for employees with skills in this area could be set to soar.
A similar situation applies to the field of mobile commerce, as a growing number of businesses are starting to invest in improving their websites and social media channels to allow their products and services to be purchased via mobile devices.
Furthermore, another area influencing the shift to more IT contractors being required is that of cloud computing. Data security and storage are becoming increasingly important issues for firms throughout the world, meaning more are taking advantage of backing information up via the cloud, therefore resulting in professionals with skills and knowledge in this area being required.
Ms Sarratt also provided an insight into what she believes the future will hold for IT contractors, explaining she thinks demand for their skills will only continue to increase, while the coveted nature of their expertise will be so sought-after that candidates will be able to pick and choose which jobs they take on.
"As Silicon Roundabout continues to attract global investment, there will be further opportunities in the technology sector requiring the expertise offered by IT contractors," she stated.
"Their highly-prized skills are in short supply, so IT specialists are able to make the most of high demand for their talents and maximise their earnings."
IT contractors who suddenly find themselves taking a higher wage home due to their increased demand may benefit from working as a limited company contractor and utilising the services of an accountancy service provider. Working as a limited company contractor is the most tax efficient way to work because as the director and shareholder of the limited company, the contractor is allowed to draw some of their funds as a dividend rather than being paid a full salary so overall their tax burden is reduced.
A credible accountancy service provider, such as PayStream, will determine the IR35 status of a contractor before they offer this service as an option. More information on our Limited company services can be found here.