Software development in 2022 will continue to move towards cloud-based solutions, as the cloud will continue to play an important role in helping businesses with their speed, agility and security, writes Matt Collingwood of IT recruitment agency VIQU.
For software development entrepreneurs in 2022, paid opportunities will be increasingly remote and increasingly lucrative in the year ahead.
(More) Software Development Market Forecast
And in the 12 months of 2022, we further expect more indie developers to use tools like Toptal to bid for work.
But we also anticipate that wherever announced, software development contracts will remain more likely than many other IT contractor assignments to be outside of IR35.
We will return to these important points later.
Six software development contracts that taste like 2022
But with a nod to some of them below, here are six of the best software developer contract opportunities on offer right now in 2022:
- Full Stack Developer (.net Core / C#) – 3 months initial – Remote work – Excluding IR35
- .Net developer (.net Core / C# / Azure / DDD) – 6 months initial – Remote work – Excluding IR35
- Front End Developer (React / Redux / Typescript) – 6 month contract (Initial) – Excluding IR35
- Full stack developer – Cookie compliance project – Remote / occasional travel – Initial contract of 3 months – Excluding IR35
- Senior PHP Developer – 6 month initial contract – Remote work / London
- Development Project Manager – 3 month contract – Leicester / Remote – Excluding IR35
Where is software development and where in 2022
Now, a little about me, just to let you know that I’m in a good position to predict what’s next in the software development market for entrepreneurs.
I started my career in IT recruitment over 25 years ago, when I had a penchant for recruiting for coding languages like COBOL and PASCAL.
Although the software development landscape has changed significantly since then, my passion for software development has not changed. That’s why I opened my own IT recruitment agency in 2014, where one of my main goals was to build an internal development team to help the agency’s clients.
Over the past five to ten years, I have observed that the skills gap within the development market has increased dramatically. For example, a few years before covid hit, I vividly remember an article written by APSCo stating that a whopping 97% of companies were complaining about development hiring issues!
Fast forward to today, and businesses still have no choice but to adapt to the current skills gap in the marketplace. But recently, we’ve seen some recruiters establish some very innovative strategies to attract and develop development talent, through apprenticeships, coding academies, and more. For example, one of the UK’s largest Microsoft Gold product companies now runs a sponsored degree program to obtain top development talent. before they even start university.
Software Development Shock: Agencies Not Part of the Solution
These companies are doing what they can to reduce the skills gap. But generally (I’m going to say the unspeakable now as an agency boss) — I think recruiting companies do not help solve the problem. They add to it. By moving existing developers from client to client, agencies are doing nothing to help the market.
Striving to be different, we’ve tried to do our part through our International Worker Scheme, which brings highly skilled developers to the UK via the Skilled Worker Visa route (formerly known as Tier Sponsorship 2).
Some of these imported workers will help lead development in 2022. And that continues into cloud-based solutions, reflecting the fact that the cloud will retain its key role in making businesses faster, more agile and more secure.
Two-thirds of software development contracts? They are now at a distance
As I also touched on at the start, remote work in the software development space is here to stay. According to our database, 38% of developer entrepreneurs were working remotely before the pandemic, up from 65% at the start of 2022.
Remember that there was already a movement towards remote work in the development market before the pandemic. Covid only accelerated it. The pandemic has helped companies see the clear benefits of working remotely, especially for hard-to-find development talent. Companies can now expand their recruitment network, either within their region depending on whether the contract requires office visits, or across the UK if the position is entirely remote.
Thus, location no longer needs to be a factor. Indeed, since the start of the pandemic, the commitments we place with 100% remote customers have double. It’s a clear indicator of where the IT market is going, and I see it as a huge benefit for the software development market in particular.
IR35, rates, outlook…
If it’s not where they work, it’s how much they’ll earn, and under what status, that entrepreneurs will continue to demand in 2022. On both fronts, there’s good news.
IR35 is going in the right direction for software developers. In fact, at the start of 2022, only 22% of our contracted developers were in IR35, compared to 78% working outside of IR35. Interestingly, in comparison, when looking at all other areas of IT outsourcing in Q1 2022, just under half of that percentage was working outside of IR35.
Also, auspiciously, software developer pay rates for contractors have increased by 12% over the past year. And we expect to see prices increase further this year, especially on extensions.
This inbound surge is due to the fact that, overall, we expect very strong demand for outsourced software developers in 2022. Here’s an interesting and related statistic. Comparing the first six months of 2021 to the last six months, our ad response is down 80%. Sounds bad, right? But no, that just underscores the fact that IT talent, especially highly skilled professionals like developers, are in such demand that they don’t even need to bother to move forward to find their next role!
Auction sites to flourish
In 2022, we expect to see more developers using tools like Toptal to bid. From speaking with a number of recent users, they like the simplicity of transactions, in addition to the straightforward dialogue with customers. However, I’ve also heard that this can be a frustrating platform to use when the chosen bidder/developer is often selected solely on price. As platforms like Toptal are global, developers in some countries reduce the base rate a developer in the UK would charge.
Do platforms like this make recruitment agencies redundant? Absolutely not. There are a lot of limitations and inconsistencies in using tools like this. However, I see the appeal for developers looking for short-term work or an extra way to earn money on top of their contract or permanent job.
So ultimately, how much do software development contracts pay?
And since money talks, let’s finish with some tangible goods! Here are the latest rates for the six hot software development contracts I shared up top – and remember, they’re all outside of IR35.
- Full Stack Developer (.net Core / C#); £350 to £400 per day.
- Net Developer (.net Core / C# / Azure / DDD); £400-500 per day.
- Front-End Developer (React / Redux / Typescript); £400-500 per day.
- Full Stack Developer (Cookie Compliance Project); £350 to £400 per day.
- Senior PHP Developer (London) £500 to £550 per day.
- Development Project Manager (Leicester / Remote) £500 to £525 per day.