Pay growth for IT contractors is outstripping increases in permanent salaries, a specialist technology recruitment firm has found.

Computer People’s latest IT Monitor report reveals that contractor rates increased by 3.9% between June 2014 and June 2015. That’s compared to average year-on-year salary growth in the permanent market of 3.01%.

The number of contract role vacancies increased 3.29% year on year.

Reflecting on the findings, Computer People managing director Roy Dungworth said: “The IT sector continues to use flexible, contract employment to fill immediate gaps in strategic skills.

“Further proof of this comes from the steady growth of daily rates, which are currently outperforming advertised permanent salaries.”

He added that the scarcity of skilled candidates had created a “war for talent” that continues to drive pay for IT professionals well above the UK average.

So which roles and skills are hot in the IT contract market? Assignment rates for application analysts leapt 26.6% during the course of the year, and by an even more impressive 29.4% between April and June 2015.

Other contract roles witnessing impressive year-on-year pay growth included senior management (11.6%), technical support (7.5%), business intelligence (7.2%) and web development (6.9%).

In terms of the number of contract vacancies available, the strongest annual growth was in technical architecture (37.8%), followed by network engineering (22.9%) and database development (21.1%). 

Computer People says regional demand spikes for software engineers have been limited to London during the first half of 2015. In contrast, web development demand was more evenly spread – spiking across the East Midlands, North West and Yorkshire.

Admitting that future trends are difficult to predict, Mr Dungworth concluded:  “What isn’t in question is the gap between the skills and experience in the market, and needs of UK IT businesses.

“Good news for those hunting better jobs, but an undeniable challenge for those looking to hire.”

Neil Armitage, Operations Director at Umbrella.co.uk, added: “The fact that contractor rates continue to outperform permanent salaries shows that businesses are still happy to pay a premium for the expertise of highly skilled professionals who operate on a project / contract basis.”