Well-lined pockets and no ties

They're freelance, they're ambitious and they're coining it. IT stringers can rope in pounds 1,000 for a week's toil.

Contract IT staff have breached the pounds 1,000 a week mark, making them among the best-paid workers in the country. Britain's huge - and growing - temporary contingent now earns double the salaries of the permanent- job population. Rates over the past year have risen at twice the level of inflation, pushing the freelancers further ahead in the earnings league.

The figures have emerged from the latest quarterly survey conducted by CSS Trident, the second-largest IT recruitment agency in the country, which drew the numbers from its own database. It found an average weekly income of more than pounds 1,000 among some 1,500 freelancers on current contracts.

The findings are corroborated by other studies of the market, which show that while companies may have shed the responsibilities of a permanent workforce in favour of "buy in'' expertise when they need it, they are much more at the mercy of market economics.

The annual Holway Report, the definitive snapshot of the British computing services industry, shows that the agency staff market grew by 22 per cent in 1995, and that average costs per employee went up by seven per cent - nearly three times the rate of inflation. Sally Carter, spokeswoman for CSS Trident, says contractors, who are mostly one-man bands, are growing increasingly bold at exploiting shortages by putting up their rates. "They are dictating rates to a large extent,'' she says.

In September last year, the growth rate of contractors' pay reached a peak, rising by 9 per cent in the previous year. While it has since levelled out, the most recent figures still show an annual rise of 6.2 per cent. Permanent staff rates showed a rise of 5.3 per cent, but from a starting point much lower than the contract workers.

"The lure of contract rates is attracting the interest of more staff in permanent positions,'' says Ron Moss, CSS Trident's managing director. "Almost a third of those registering with us are permanent staff seeking contract opportunities.''

A severe skills shortage has contributed to the rocketing rates. Although Mr Moss feels this has been exaggerated, he says end-users are having to compete with each other for good contractors, and "the right rate'' gets the best person.

One West London technical recruitment division, part of Ecco Employment, finds shortages of certain skills so severe that advertisements can fail to attract a single applicant. Dunstan Arthur, a consultant, says rapid technological advances take place faster than people can learn the skills to use them. Yet at the same time, old mainframe skills remain in demand.

Contractors can find themselves besieged by contradictory advice. One minute they are told to acquire as many new skills as they can; the next they are being told that they should have kept up with Cobol, CIX or Unix, software that was around before client-server was conceived.

"It is a trap and I wish I knew which way the market was going to go," Mr Arthur says. "A couple of years ago, the big thing was networking, so people spent the last two years learning about it. But at the moment in west London, we have more people with networking skills than we have vacancies.

"It is becoming increasingly difficult for people experienced in one field to transfer their skills to another. As technology advances, so the fields become narrower, and people are forced to become more specialised. The range of transferable skills in IT is therefore decreasing rapidly.''

Richard Holway knows from his research that 90 per cent of all money spent on IT goes on maintaining or running systems installed more than two years ago. He predicted rocketing rates months ago. "There is really a major IT skills shortage at the moment, across the board, and although a lot of people says it's only the latest technology, network management and so on, many conversations I've had say there's a shortage of Cobol people - people actually prepared to sit down and maintain Cobol programmes.

"When you consider that a lot of systems run for between five and 10 years, and they need to be consistently updated during that period for everything from legislative changes to changes in business practice, this remains the biggest area of work.''

Claire Mowat, managing director of JM Contracts, is seeing rates of up to pounds 1,500 a week for the "sexiest'' skills, including C++ and Sybase. ''This is a true supply-and-demand situation; the oldest rules of economics. Some people are almost in a position to write their own cheques, or run Dutch auctions and take the contract from the highest bidder.''

Because of these rates, she says, companies ought to ensure that skills transfer takes place from the freelance to in-house people - "otherwise they are still left with training costs for their own staff''.

Richard Holway's advice for the risk-taking IT freelance is to head towards the information superhighway as it stumbles, not always under expert guidance, to its feet. "This is the most rapidly growing section of the market. I know it's a buzz word, but if I had a son, I'd advise him to set up an Internet consultancy - not a service provider, but someone able to show people how to design their World Wide Web pages. The fees are high and few people can do it.''