As technology undergoes a period of rapid transformation driven by advancements in artificial intelligence, data analytics, cybersecurity, and cloud solutions, the need for skilled workers in the space is on the rise.
Businesses across various industries continue embracing new technologies to stay competitive and foster innovation. This surge in technological transformation has created a growing need for specialised talent—particularly those skilled in emerging technologies. But could this heightened demand translate into higher pay rates for IT contractors?
In this article, we explore the factors driving this shift and whether IT contractors can expect to see an increase in their rates in 2025.
Growing Demand for Tech Skills:
As we explored in our recent article, "The Most In-Demand IT Skills & How Contractors Are Bridging the Gap", the rapid pace of technological advancements, growing adoption of technologies across a wide range of sectors, and a growing skills gap means companies are increasingly looking to skilled contractors with specific expertise and knowledge, especially in high-demand areas such as AI, machine learning, cybersecurity, data analytics and cloud computing.
Currently, skills shortages prevail within the technology industry, with the recruitment agency Hays noting in their UK Tech Contractor Day Rate Guide 2024, that 87% of organisations they surveyed reported skills shortage challenges in the previous year. The report found the demand for talent to be particularly prevalent in the public sector, where (91%) of respondents cited such challenges compared to 83% in the private sector.
The Rise of Artificial Intelligence and Automation:
In recent years, AI and automation tools have surged in popularity and adoption across multiple sectors and roles across the globe, creating a shift in hiring trends. Recent research published as part of the 2024 Work Trend Index Annual Report by Microsoft in partnership with LinkedIn found that 71% of business leaders indicated a preference for hiring candidates with AI skills, while job postings referencing Gen AI or related skills and terms have increased dramatically in the last year, according to research by Indeed.
This is perhaps unsurprising given the uptake in the adoption of AI technologies. 2024 In their Labour Market Pulse Report, IDA Ireland, in partnership with Microsoft and LinkedIn, highlighted that all measured sectors in the report have seen an increase in AI skills. At the same time, Forbes highlights that 72% of businesses globally are currently using AI. In their UK Tech Contractor Day Rate Guide 2024, Hays highlights that over a third (35%) of UK businesses surveyed are investing in AI tools, while 37% plan to do so in the future.
The EU AI Act:
The increasing prominence of Artificial Intelligence has raised concerns regarding the risk and ethical implications of AI technologies. In 2024, the European Union was the first regulatory body to introduce a legal framework to regulate the technology. The EU AI Act, which took effect in 2024, focuses on creating a framework for safe and transparent AI use across various sectors. As this legislation continues to be rolled out, professionals with expertise in navigating this new regulatory landscape will be essential as businesses seek to ensure compliance with the Act while leveraging AI for strategic advantage, presenting opportunities for international contractors who demonstrate in-depth knowledge of regulatory frameworks governing such technologies.
Supply and Demand:
As the tech industry continues to face a significant skills gap, contractors with in-demand technical skills will find themselves in an advantageous position. The IT contractor market is expected to remain highly competitive, with employers eager to secure top talent. This increased need has been reflected in hiring trends, as evidenced by the 2024 report by Robert Half, which found that 65% of tech leaders surveyed are increasingly engaging skilled contractors. While permanent roles remain in demand, contractors are a great talent solution due to their ability to start quickly and provide specialised expertise with minimal lead time.
In their Ireland Technology Contractor Day Rate Guide 2024 the recruitment agency Hays reports that many businesses are increasingly turning to specialised contractors to address immediate skills gaps, meet growing demand, ensure staffing cost flexibility, and access skilled talent for one-off and time-sensitive projects. In fact, IT contractors skilled in AI technologies, data analytics, and cybersecurity are in particular demand as companies race to implement these innovations.
Increasing Rates of Pay:
As we have highlighted, technology has advanced rapidly, and organisations across the globe have been increasingly leveraging technologies such as AI and fraud detection, predictive analysis, personalisation, and data analysis. As a result of this surge in technological adoption, the demand for workers who possess in-demand skills and specialised knowledge and can display proficiency in AI technologies has risen significantly, meaning contractors can often demand higher rates due to increased demand from organisations facing skills gaps in their workforce.
In a 2024 report, Robert Half found of the companies they surveyed, 44% stated that they would increase starting rates for top candidates with AI, machine learning, and data science skills. Additionally, 37% would offer higher pay for professionals with in-demand cybersecurity expertise, while 30% said they would raise compensation for those with cloud computing skills. Hays' director for technology recruitment in Ireland, Robb Barr, highlighted in their Technology Contractor Day Rate Guide that day rates for contractors in Ireland have already seen an increase. Day rates for contractors saw an average increase of 1.4%, with more significant increases for Python, Java and R developers (2.4%) and those in cyber security 2.3%. This trend can also be seen elsewhere, with Hays UK highlighting in their 2024 Tech Contractor Day Rate Guide that rates for specific specialist fields have significantly increased due to increased demand for particular skills. This is particularly true for those working as information security architects within cyber and those working in software development, particularly in the banking and investment management sectors. Out of all the skills listed in the report, Intelligent Automation (IA) has seen the highest increase, with contractors benefiting from a 12% increase in pay rates as organisations expand and increase their investment in machine learning capabilities, leading to a surge in demand for workers who possess these skillsets.
Acting Fast in a Competitive Market:
With the rising use of AI and automation tools, companies recognise the need for workers who can work with these technologies to help streamline processes, improve efficiencies, and drive innovation.
As businesses compete for this limited talent pool, IT contractors with expertise in these high-demand fields may find themselves with increased opportunities and well-positioned to command higher day rates. However, the growing demand and continued skills gap suggest contractors who possess the in-demand skills and specialist knowledge will be acquired quickly. So it is vital that those in the hiring process act fast, begin the recruitment process early, and align rates, incentives and compensation with market trends and competitive benchmarks.
How the Experts at 3C Global Can Help You!
At 3C Global Group, we understand the complexities of international contractor engagement. Our expert team are on hand to provide recruitment agencies and businesses with fully compliant solutions that remove administrative burdens and mitigate risks for all stakeholders in the global hiring process—allowing you to hire and place top talent quickly and compliantly across borders.
Whether you're placing IT contractors in a new market or scaling your international hiring strategy, we provide the expertise, personal support, and tailored solutions to make global contractor engagement seamless. Contact 3C Global Group today to learn more or get started
Contractors, Ready to take up a new role but have compliance questions? Our knowledgeable team is on hand to assist with whatever your international contracting query entails. Whether it is employment structures, invoicing, insurance, immigration queries or more, our expert team is on hand to help. Contact us today to learn more.
Interested in learning more about the IT talent landscape in 2025?
Check out our previous article here to dive deeper into the skills that are most in demand and the growing importance of international contractors in the tech industry.
Want to see more of this kind of content?
Keep up with the latest insights, updates and trends with 3C Global!
📚 Explore our blog for expert insights!
📩 Stay updated with our latest news & industry trends 👉 Subscribe to our Newsletter Today!
