Tight supply and increasing demand have pushed prices for IT contractors skyward, new figures have confirmed – yet while Sydney may be Australia’s largest city, it’s not the place where contractors can make the most money.
That prestigious honour goes to Canberra – where, the newly released Hays Technology Contractor Rates Guide 2022 found, contractors across most of the 65 studied IT specialties were routinely charging more than their colleagues in Sydney, Melbourne, or anywhere else in Australia.
Network architects, for example, are charging an average of $1,200 per day in Canberra, compared with $1,060 in Sydney, $1,000 in Hobart, and $900 in Perth.
Service delivery managers are commanding an average $1,040 per day in Canberra versus $950 in Sydney, while ERP/CRM developers are averaging $1,095 per day compared with $980 in Sydney and $910 in Melbourne.
Unsurprisingly given ongoing discussions about the cyber security skills gap, cyber specialists were the best-paid consultants overall.
Cyber security architects took the mantle as Australia’s best-paid consultants – charging $1,600 per day in Canberra and $1,350 in Sydney and Melbourne – while cyber security engineers are billing an average of $1,200 per day in Canberra, $1,000 per day in Sydney and Melbourne, and $840 per day in Adelaide and Perth.
Even less-expensive contractors are charging appreciably more in Canberra, with Level 2 desktop support consultants charging $410 per day in Canberra versus $350 per day in Sydney – a surplus of 17 per cent in the government-focused ACT market.
Critical to sustain transformation
Despite the premium prices, digital transformation-minded organisations have little recourse but to pay up.
The South Australian Government, for example, made a pre-pandemic commitment to overhaul South Australia’s data-centre architecture and ran into challenges from surging demand during the pandemic.
To ensure they could continue the transformation despite the pandemic’s disruption, IT strategists doubled down on their use of contractors to access hard-to-find skills.
“There’s a lot of work for my team and across the government, and we require more people with very specific technical expertise to help expedite this move,” explained SA Government chief information officer Eva Balan-Vnuk.
“These projects, when compounded by an extremely hot tech contractor market and current migration limitations in Australia, mean we’re finding it hard to source all of the skills and talent that we need.”
Other organisations are tapping contractors to deal with the natural ebb and flow of project work.
“The ICT sector in this country… is fundamentally a contractor-based industry,” David Fredericks, Secretary of the Department of Industry, Science, Energy and Resources (DISER), told a recent Parliamentary Economics Legislation Committee hearing, “and in many ways our intersection with that industry impels us to rely on contractors in the ICT sector.”
Contractors are invaluable for providing “surge capacity [due to] the management of a lot of grants that tend to ebb and flow,” Fredericks said. “We frequently find ourselves using contractors in order to be able to deal with a wave of work that is coming through the grants process.”
Show me more than the money
Yet while money may get contractors in the door, experts warn that the contractor-employer relationship needs to be about much more than money to work for everyone involved.
“All organisations have a limit to how high rates can go while still remaining viable and sustainable,” notes Hays Technology regional director Robert Beckley, “and so are exploring levers beyond dollars to attract skilled technology professionals.”
Contractors are, for example, increasingly interested in the details of projects they are working on – and choose their projects based at least in part on what skills they can potentially learn while there.
Companies should consider how to keep contractors engaged and interested in the projects they’re working on – “the broader value exchange on offer,” as Beckley puts it – so they don’t walk once their 6-month or 12-month term expires.
It helps to communicate the company’s purpose and employee value proposition throughout the hiring process, he adds, noting that “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.”
Ultimately, Beckley advises, contractors need to be careful to remember that they’re in it for the long haul – and to avoid gouging clients or burning bridges.
How long can this last?
“While I make contingencies around searching for the absolute best (for example in leadership positions), in many cases I prefer speed and agility coupled with the right attitude,” said Alberto Simognini, head of enterprise services with financial-service firm Latitude Financial Services, who notes that 70 per cent of his 250-strong extended workforce is comprised of contractors.
Extended border closures have choked off a supply of overseas talent and “this has driven a considerable increase in salaries and daily rates,” Simognini said, warning that the money on hand “is further driving less loyalty and employment has become even more transactional.”
“It’s natural that some contractors are trying to take advantage of the short supply market… but there is a threshold. At some stage the market will slow down and possibly even turn back because this isn’t sustainable for businesses – and I wonder how sustainable it will be for the Australian economy.”