Why day rates are on the rise for contractors in cyber roles

Our UK Tech Contractor Day Rate Guide 2023, which received responses from almost 800 technology contractors and employers, reveals that nearly two thirds (61%) of employers increased contractor day rates over the last year, resulting in a 3.3% average day rate increase. Crucially, it's cyber roles that continue to see the highest day rate increase, by an average of 5.8%, so what are the reasons behind this trend?

Cyber-attacks heighten demand for talent

Although cyber-attacks are driven by many different motives, financial services are a stereotypical target for hackers to fraudulently acquire funds.

Cyber security has long been a top priority for many organisations. However, the sheer volume, scale and frequency of successful cyber-attacks we are witnessing today across all sectors, including public and private sectors, has further increased the demand for talented cyber professionals. News coverage of cyber-attacks also creates awareness of the tangible cyber threat amongst a wide audience.

Our research found that cyber roles in financial services lead the way in terms of day rate rises, with contractors seeing a 9.3% increase compared to last year. Although cyber-attacks are driven by many different motives, financial services are a stereotypical target for hackers to fraudulently acquire funds. Financial service organisations have tended to pay higher day rates as they are used to dealing with risk and the cyber-threat only exacerbates this, so employers are eager to access talent to help protect financial assets at hand.

With the cyber threat here to stay, the demand for talent is ever-growing, but persistent and widespread cyber-attacks are not the only reason for the increase of contractor day rates in this area.

Ongoing skills shortages

Whilst cyber-attacks are a contributing factor to the increased demand for skilled cyber contractors, arguably it's not solely the threat of cyber-attacks that increases the rate, it's the lack of available talent out there in the market to address the growing demand from organisations. According to our research, the majority (90%) of employers experienced skills shortages last year when trying to secure tech contractor talent. One way to compete for contractor talent in a skills-short marketplace is to offer an attractive day rate, and the significant increase in day rates for cyber roles reflects this.

Day rates unchanged by geography

Cyber is still a niche skill set and the talent pools to meet the demand are scarce, hence these contractors are very valuable to organisations across the UK and are being paid accordingly.

Over the last 10 years, the demand for cyber skills has continually risen across tech throughout the UK; combined with the change in working environments as a result of the COVID pandemic, day rate differentiation due to location has levelled. Whilst the pay gap in the cyber domain was beginning to close before the pandemic, it was certainly a catalyst for this levelling of day rates regardless of geographical location. The cost-of-living crisis has also inevitably impacted the day rates being offered to contractors today.

Whereas a few years ago contractors could command more for working in London, contractors from Edinburgh to Birmingham are now on a level playing field as a result of a rise in remote and hybrid working, as well as the sky-high demand for strong skillsets. For instance, our guide shows that the typical daily pay rate for a cyber security analyst in London (￡600) is the same as the day rate for the equivalent role in the Midlands (￡600) and South East England (￡600). Cyber is still a niche skill set and the talent pools to meet the demand are scarce, hence these contractors are very valuable to organisations across the UK and are being paid accordingly.

Work-life balance in the cyber world

There is a considerable risk of burnout amongst cyber contractors, who often work long hours and may have to deal with stressful situations if a major cyber incident happens.

Whilst pay is important, especially considering the uncertain economic climate, being able to achieve a positive work-life balance is a crucial consideration for almost half (47%) of contractors. Employers should offer flexible working where possible to help facilitate this; 78% of contractors say the opportunity to work from home or remotely is an important consideration for a new role.

There is a considerable risk of burnout amongst cyber contractors, who often work long hours and may have to deal with stressful situations if a major cyber incident happens. Particularly in a market with short supply, it’s vital for employers to keep an eye on the mental health of professionals working in this area, or risk making skills shortages worse if burnt-out cyber contractors decide to leave their jobs. In a candidate-led market, cyber contractors are more open to declining opportunities that don’t align with their values or meet their expectations when it comes to things like flexibility and pay.

Ultimately, cyber contractor day rate rises are a complex notion of cyber-attacks, talent shortages and a large number of organisations looking to advance their cyber systems.

Previously featured in Contractor UK.