State of the Market

[jamesbrown]

This might not be the most ideal question since obviously I can search and find the answer myself, but I'm interested in knowing what would be a competitive rate for someone inside IR35 in this particular market. I haven't had any experience with rates for those inside IR35 before, so I'm curious to hear others' opinions in case I decide to explore this option.

In what particular market? There will be people around here on T&M rates ranging from perhaps £200 pd or less to over £2k, which doesn't really describe a market in any meaningful sense, whether inside IR35 or not. You may have more luck in asking about percentage increases in rates for inside roles, but that likely depends a lot on supply/demand too with bigger increments where demand is high and supply is somewhat limited, such as high end roles in industries that are very risk averse and mostly offer inside roles (e.g., banking, pharma).

[JustKeepSwimming]

This might not be the most ideal question since obviously I can search and find the answer myself, but I'm interested in knowing what would be a competitive rate for someone inside IR35 in this particular market. I haven't had any experience with rates for those inside IR35 before, so I'm curious to hear others' opinions in case I decide to explore this option.

You have given next to no information.

IMO, in financial services, a competitive inside rate would be anything above the TC of the perm equivalent which is what they seem to offer. There isn't really a 'risk premium' (I guess you could argue getting a guaranteed bonus and money instead of benefits you may not want).

[andromedan]

Yes, sorry for being so vague with my previous post. It's for the public sector for a senior frontend role. I was at my previous contract at 650+ outside but it ended in June after 6 months. I think the recruiter quoted me a similar daily rate of 650 (gross rate including employer's and employee's NI, taxes and statutory costs) but it's inside. I would assume around 750 or 800 would be a good rate inside but that may be wishful thinking on my part.

I have 0 requests to do interviews even with 400 outside contracts right now so I'm thinking of expanding my options instead of burning my warchest that took a big hit during the pandemic.

[fiisch]

Yes, sorry for being so vague with my previous post. It's for the public sector for a senior frontend role. I was at my previous contract at 650+ outside but it ended in June after 6 months. I think the recruiter quoted me a similar daily rate of 650 (gross rate including employer's and employee's NI, taxes and statutory costs) but it's inside. I would assume around 750 or 800 would be a good rate inside but that may be wishful thinking on my part.

I have 0 requests to do interviews even with 400 outside contracts right now so I'm thinking of expanding my options instead of burning my warchest that took a big hit during the pandemic.

An inside day rate is better than no day rate - in the BA contract world, I'm seeing outside contracts for £6-700, inside rates at £750-800. Not sure if that helps, but having experienced an inside gig through the pandemic, in my experience the inside rates offered generally are not enough to compensate the financial disincentives of working inside IR35.

One way of "improving" the appeal of inside gig is if you're intending to throw a significant chunk into a pension.

[GJABS]

I've recently started a new hybrid contract in the city of London for a large financial institution as a SQL developer, on a rate of £350/day. This is quite low I think. It was advertised as £400/day (which I thought was low - I was making that 12 years ago), and at the point I was offered the role the service provider intermediary (the agent) dropped it to £350. Since I had had no other interviews after several months on the bench I decided I had better accept it.
Fortunately the role is going well I think (touch wood), is interesting work, so I'm keen to hang on to it if I can.

What is interesting is that after I started the role, the client said to me that they had found it difficult to find anyone, surmising that the market for contractors was strong. I was the only person they had interviewed who they thought could do the job. I replied that I had found the market fairly quiet (an understatement).
I wonder why they dropped the rate then? (I didn't ask).

Is it possible that the intermediary is overcharging the end client such that the end client thinks they are paying a market rate, but the low rate paid to the contractor causes a lack of good contractors prepared to accept the work?

The rate I receive is not subject to IR35 because I am treated as a temp employee rather than a contractor, with the pay directly to me as an individual rather than to a Ltd company or an umbrella company. On top of the £350/day the intermediary pays the employers NI, and payrolls me as an employee (deducting tax and employee NI from the gross rate, paying me net weekly). I guess the £350 is the equivalent of £392 as a gross-fee IR35-caught contract adding on the employers NI. Payrolling me as a temp employee seems like a sensible move because it cuts out the umbrella company "middleman", saving on their fees.

I have a family member who lives in London, where I stay during the week when I'm onsite to save money. Were it not for that fact I might find myself paying £70/night for a cheap hotel in Zone 3, which I would have to fund from my after-tax pay.
I get the bus into the office rather than take the tube as it is cheaper.

So the market is quiet at the moment, very quiet, with rates down in the basement. But it is darkest the hour before the dawn, and things will get better.

[JustKeepSwimming]

I've recently started a new hybrid contract in the city of London for a large financial institution as a SQL developer, on a rate of £350/day. This is quite low I think. It was advertised as £400/day (which I thought was low - I was making that 12 years ago), and at the point I was offered the role the service provider intermediary (the agent) dropped it to £350. Since I had had no other interviews after several months on the bench I decided I had better accept it.
Fortunately the role is going well I think (touch wood), is interesting work, so I'm keen to hang on to it if I can.

What is interesting is that after I started the role, the client said to me that they had found it difficult to find anyone, surmising that the market for contractors was strong. I was the only person they had interviewed who they thought could do the job. I replied that I had found the market fairly quiet (an understatement).
I wonder why they dropped the rate then? (I didn't ask).

Is it possible that the intermediary is overcharging the end client such that the end client thinks they are paying a market rate, but the low rate paid to the contractor causes a lack of good contractors prepared to accept the work?

The rate I receive is not subject to IR35 because I am treated as a temp employee rather than a contractor, with the pay directly to me as an individual rather than to a Ltd company or an umbrella company. On top of the £350/day the intermediary pays the employers NI, and payrolls me as an employee (deducting tax and employee NI from the gross rate, paying me net weekly). I guess the £350 is the equivalent of £392 as a gross-fee IR35-caught contract adding on the employers NI. Payrolling me as a temp employee seems like a sensible move because it cuts out the umbrella company "middleman", saving on their fees.

I have a family member who lives in London, where I stay during the week when I'm onsite to save money. Were it not for that fact I might find myself paying £70/night for a cheap hotel in Zone 3, which I would have to fund from my after-tax pay.
I get the bus into the office rather than take the tube as it is cheaper.

So the market is quiet at the moment, very quiet, with rates down in the basement. But it is darkest the hour before the dawn, and things will get better.

Looking at the data things won't improve until 2025+.

I follow most big companies in the financial sector, all have cut their rates by about 20% from 2022. It's the nature of the beast for contractors (although its the same for permies, instead of offering top of the salary range they are now offering middle or below). Recruiters are getting absurd number of applications but vast majority are 'spray and pray'.

IME you have to take what clients say with a pinch of salt. Last week I had interview feedback from a relatively small company that I was 'More suited to a junior role', whilst granted I'm not 'old' my experience speaks for it's self, ie, reporting directly into several international bank national board level executives and budgets in the 10s of millions and many dozens of resources.

Fortunately I have stumbled upon an old client's project that is right in my wheelhouse. Significant pay cut but would solidify a new skillset (that I actually find interesting_. Considering there is a half dozen senior managers who would vouch for me at the company I probably just cry if I don't get it. FTSE 100 are ***** though.

[Fraidycat]

What is interesting is that after I started the role, the client said to me that they had found it difficult to find anyone

£350 a day is about £85K a year and some void period at end if you don't walk into another role.

£80K (£40per hour) was the going rate in the City in the mid 90s, 30 years ago!

They are not going to get many or any good CVs for that rate. If you are any good then they got lucky.

[fiisch]

Another contractor turned permie considering a return - but having contacted my network of reliable agents, there seems to be a wealth of BA contracts in the insurance world with rates of £6-700pd, mostly outside IR35. Certainly, enough to give me confidence to hand in my notice in the morning and start applying.

Rates compare favourably to my current permie salary of £98k - I know many would stay stick with the security of the perm job, but the politics is driving me bonkers and the work is truly soul-destroying and in a slightly different area to that which I enjoyed previously as a contractor... I've been agonising over this decision for much of 2023, but I think ultimately working as a contractor suits me much better.

Handed my notice in on Thursday (which I think wasn't wholly unexpected but not taken particularly well) and phoned a couple of agents I know to be useful. Had three interviews since Friday so fingers crossed... The market seems red hot to me - perhaps this is industry dependent going by some other recent comments on this thread, but I've managed to stir up plenty of interest without applying in anger/visiting the job forums. I'd love to say that's because of the quality of my CV and sparkling personality, but I've only been a BA for 7 years so it's more likely reflective of the market rather than my CV.... I also know that from the other side of the table, we struggled to find good quality BA's this year offering £600p/d outside IR35.

I must admit though that I am finding the process of getting a contract emotionally draining - I don't get nervous before interviews anymore (I've had too many over the span of my career for that) and I'm only in the early stages of looking having recently given notice, but I've really not been myself this week. I'm lucky in that I don't suffer with any mental health/anxiety issues *touches wood*, but this week is the closest I've ever come to having feelings of anxiety. Maybe it's anxiety over leaving the relative security of a perm position, but in my head I'm very comfortable with my decision (or at least I think I am!).

[TheDude]

Handed my notice in on Thursday (which I think wasn't wholly unexpected but not taken particularly well) and phoned a couple of agents I know to be useful. Had three interviews since Friday so fingers crossed... The market seems red hot to me - perhaps this is industry dependent going by some other recent comments on this thread, but I've managed to stir up plenty of interest without applying in anger/visiting the job forums. I'd love to say that's because of the quality of my CV and sparkling personality, but I've only been a BA for 7 years so it's more likely reflective of the market rather than my CV.... I also know that from the other side of the table, we struggled to find good quality BA's this year offering £600p/d outside IR35.

I must admit though that I am finding the process of getting a contract emotionally draining - I don't get nervous before interviews anymore (I've had too many over the span of my career for that) and I'm only in the early stages of looking having recently given notice, but I've really not been myself this week. I'm lucky in that I don't suffer with any mental health/anxiety issues *touches wood*, but this week is the closest I've ever come to having feelings of anxiety. Maybe it's anxiety over leaving the relative security of a perm position, but in my head I'm very comfortable with my decision (or at least I think I am!).

I'd have got a contract first then resigned - assuming you don't have a ridiculous notice period.

[fiisch]

I'd have got a contract first then resigned - assuming you don't have a ridiculous notice period.

I am subject to a ridiculous 3 month notice period...

I suspect there will be some flexibility in that if and when I secure a contract, but I thought it'd be better to give notice and say "I am going to do X" rather than "I've got a contract and I need to be gone by XX"...