Following the dollars: The rates contractors command

Published on the 05/05/2022 | Written by Heather Wright

And how businesses are coping…

There’s little relief on the horizon for companies using IT contractors, with a new report showing the daily contract rate for some of the most in-demand roles now hitting up to AU$1,800 in Australia and NZ$1,680 in New Zealand.

The Hays Technology Contractor Rates Guide for 2022/23, shows converging factors of enacted or accelerated digital transformation during Covid-19 restrictions combined with closed international borders adding to an already tight skills market. 

“Co-investment help grows the talent pool and is a win/win.”

Cybersecurity architects are commanding the highest prices, at AU$1,480 to $1,800 in Canberra, and up to NZ$1,600 across New Zealand’s main cities, where IDAM architects, enterprise architects are also among those commanding up to $1,600. Program directors in Wellington are among those garnering up to $1,680/day for their services, with the average coming in at $1,440.

The Hays report follows on from benchmarking by New Zealand’s Ministry of Business, Innovation and Employment (MBIE) which found rates of up to $1,500 a day for public sector contractors. That report didn’t include the highly specialist roles, such as hardware engineers, but found that nine out of 10 IT jobs usually pay more than $100 an hour.

Hays’ report, which includes interviews with a number of technology leaders, also highlights the changing skills required, and the approaches companies are taking to secure specialist skills, beyond just salary.

“Overarchingly we saw a number of organisations continue their migration to cloud-based services and adjusting their tech stacks to embed competitive advantage,” says Hays Technology regional director Robert Beckley. “However, new more advanced technology often means there’s an even smaller pool of talent to draw from, therefore putting even more pressure on more specialist skill sets.”

Matthew Tavendale, manager, service portfolio, National Digital Services at New Zealand’s Ministry of Health notes that Covid has transformed not just what the department does, but what its operating model looks like, and the roles needed.

“Pre-Covid-19 we wouldn’t have been hiring product managers or agile team facilitators,” he says in the Hays report. His team is now ‘significantly larger’ and predominantly made up of contractors and fixed-term staff. 

Others interviewed note how they’re reevaluating how they bring new skills into organisations, and exploring levers beyond dollars to attract skilled technology professionals.

Flexible working arrangements, formalised learning and upskilling programs featured highly, with graduate programs and interns also proving popular.

Eva Balan-Vnuk, CIO for SA’s Office of the Chief Information Officer, says her department is reconsidering the need for at least three years experience on any applicant’s resume and paying greater attention to growing traineeships and graduates. 

Toyota Finance Australia is using secondments to move staff into new roles and is taking a co-investment route for some of its training. CIO Colin Mapp says it has a program with suppliers where for three months Toyota Finance trains a person up on its account for no cost, then the next three months the cost is shared. 

“After six months of training they gain an entry level position – this co-investment help grows the talent pool and is a win/win,” Mapp says.

Andrew Simpson, Australia Rail Track Corporation (ARTC) applications and business intelligence manager, says his organisation is focusing on upskilling its permanent workforce and, when additional resource is needed, ‘tweaking’ contract terms to offer more certainty through longevity and embedding hybrid work and flexibility arrangements to suit people’s individual needs.
“This is especially prevalent in the field of information and data integration,” he says. 

“I think that the technology contractor market will remain constrained on the supply side a while yet, therefore employers and people seeking resourcing help will have to consider how to accomplish that slightly differently,” Simpson says in the report.

“While flexible working arrangements help, we’ve also had to be more flexible in what we’re seeking.”

ARTC has created new office spaces that promote collaboration and activity based work, allowing managers to take ‘an agnostic view as to where employees are physically located’, as well as offering recognition, reward and wellbeing programs in its attempts to lure workers. 

Hays meanwhile, is advising companies focus on retention of staff, including of contractors, personalising flexibility offerings for individuals.

Widening the candidate pool and accepting new staff who meet ‘most’ requirements and then upskilling and considering diversity in location, gender, culture and ability to not just expand the talent you can access but bring new ideas to the team is also among Hays’ key takeaways.

And with many contractors juggling multiple offers, Hays says a streamlined and efficient recruitment process is also key, along with ensuring your organisations purpose and employee value proposition are up to date and clearly communicated in the hiring process. 

“More and more contractors are just as interested in what they will be working on, as they are with who they will be working with,” Beckley says.

But while those with in-demand skills are no doubt enjoying their day in the sun, the Hays report issues a caution too, warning that all organisations have a limit to how high rates can go while still remaining viable and sustainable.

“Demand for your skills is high, and commands a premium, however, be careful to avoid burning bridges or pricing yourself out of consideration,” Beckley warns.

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