Merger mania pushes up the cost of freelancers

Government contracts and merger work requires skills

IT chiefs could face higher wage bills for contract staff this year, as most IT freelancers expect fewer gaps between periods of engagement and greater earnings.

According to a study published by contractor specialist Giant Group this month, almost three quarters of IT freelancers predict that their pay packets will rise over the next 12 months, indicating increased confidence in the technology sector. Only just over half of respondents expected increased earnings when the firm carried out a similar study in 2004.

Furthermore, only three percent of the 2,500 respondents predicted a fall in pay, compared with 20 percent two years ago.

The forecast of higher wages is partly due to the fact that temporary staff now face fewer gaps in employment. Only three percent currently go more than 90 days before finding a new project, compared with 13 percent in 2004.

Matthew Brown, managing director at Giant, said that the government's push to enhance public services and online provision together with new activity in the City have improved the outlook for IT contractors. "The rise in mergers and acquisitions has meant more demand for IT workers to help merge the parties' systems, for example," he added.

Brown also pointed out that in certain cases, the public and private sectors are competing for the same contractors, so freelancers are out of work for less time and salaries are pushed higher as a result.

"Organisations are also undertaking lots of project work and are realising that the flexibility [of having freelance staff] is a good thing," Brown added.