Australian IT contractor rates shift, niche skills rise

A new report from recruitment firm Hays indicates that Australian IT contractor rates have shifted in the last year, with specific niche skills experiencing significant increases and some generalist skills witnessing a decline due to oversupply.

The IT Contractors Rate Guide for FY24/25 released by Hays highlights that contractor rates have stabilised over the past 12 months. However, this stability comes with nuances, as specialised areas continue to rise while oversupplied generalist areas have seen rates drop.

Insights into the rapidly changing technology contracting market in Australia and New Zealand are provided by the guide, which notes notable shifts in contractor rates and growing demand in niche sectors such as cybersecurity and artificial intelligence.

Adam Shapley, Managing Director of Hays Australia & New Zealand, remarked, "The IT contractor market is now more nuanced than ever. Organisations are discerning in their hiring decisions, making it essential for both contractors and employers to understand market conditions to ensure they are getting the right value."

There has been strong demand for hands-on roles such as software development, IT architecture, and cybersecurity, with firms ready to offer competitive pay for seasoned professionals. Contrarily, positions in project management and business analysis have experienced more judicious hiring practices.

The report pinpoints the most significant rate increases among cybersecurity engineers, project managers, and front-end developers. This trend reflects the rising need for specialised skills in digital transformation projects across various industries.

Regional disparities are also evident with variation in contractor rates, highlighted in the guide. States such as Western Australia and the ACT are seeing higher rates due to ongoing transformation projects in mining and public sectors.

Federal Government IT contracts are reportedly shortening in duration. Where previously engagements often extended beyond 12 months, recruiters now observe contract terms between six and 12 months. Furthermore, ahead of the election in Queensland, there has been a stall in government hiring. Hays anticipates a significant uptake of programs in 2025 regardless of the election's outcome.

Shapley stressed the importance of soft skills for IT contractors aiming to secure roles, stating, "Employers are now prioritising contractors who can seamlessly integrate into teams, communicate clearly, and solve complex problems in real-time. Contractors who can demonstrate suitable soft skills will not only stand out but secure the most sought-after roles."

The Hays FY24/25 IT Contractor Rates Guide serves as a vital resource for both contractors looking to remain competitive and hiring managers searching for appropriate talent, offering detailed insights and rate comparisons.