What is the salary gap between contractors and permanent employees in the Irish STEM market?

The Irish Science, Technology, Engineering, and Mathematics (STEM) landscape is experiencing a significant shift towards contractual work, with many skilled professionals opting for consulting, freelance, contracting, or temporary positions over traditional full-time employment. This trend, while present globally, holds unique characteristics and implications for the Irish job market. Why is this growth happening, and what could it mean for the future? 


Delving into the Dynamics Behind the Contracting Surge 

The surge in contracting work within Ireland's STEM industries can be attributed to several factors. Employers increasingly turn to contractors for their projects, drawn by the advantages of flexibility, cost-effectiveness, and the ability to access specialised skills on-demand. For many companies, contracting offers a flexible solution to address fluctuating workloads and specific project needs without the long-term commitments associated with traditional employment. 

Internationally there is a general trend toward an increase in the use of contingent workers, including contractors, across various industries, including STEM. A 2023 report by ManpowerGroup predicted that the global temporary workforce would reach 36.4% by 2025. There’s a similar trend in Ireland. A 2022 report noted a 24% increase in temporary staffing positions from 2021 to 2022, with a particularly high demand in tech and engineering. 

Simultaneously, STEM professionals themselves are embracing contracting roles, enticed by the fact that they can better manage their own schedules to maintain a better work-life balance, project-based nature, and potentially higher compensation that such arrangements afford. This trend reflects a shifting preference among some professionals who value autonomy and the opportunity to work on diverse projects over the stability of traditional employment.  

Most organisations, about 72%, have at least 10% of their workforce are made up of contractors, and nearly half, or 46%, have between 26-50% contractors. This means that it's quite common for businesses to have a mix of both employees and consultants working together. As both employers and employees adapt to the changing landscape of work, the role of contractors in Ireland's STEM sectors continues to grow, shaping the future dynamics of the industry. 

Money-Talks: How much more do contractors earn? 

The data paints a clear picture: compared to their permanent employee counterparts, highly skilled contractors enjoy a substantial financial advantage. In 2022, their annual earnings averaged a massive €123,572, more than double the average perm employee salary of €46,813. This translates to a remarkable 2.64 times higher income! And it gets even better when compared to equivalent employee roles in their field. The latest CSO data reveals that such employees earned approximately €72,444 in 2022, meaning high-skilled contractors out-earn them by an impressive 71%. 

The project economy itself presents further opportunities for financial growth. Professionals working in this space raked in an average of €126,971 annually, while perm workers earned slightly less at €118,534. Even this lower figure, however, still exceeds the average employee income. 

  • Pharma: This industry witnessed a significant jump in daily rates for male contractors, with a 15% increase from 2021 to 2023. The average daily rate went from €466 to a staggering €536. Women in the sector also saw a 20% increase, albeit starting from a lower base. 

  • Medical Devices: This sector experienced moderate growth, with daily rates rising by 8.5% from €451 in 2022 to €493 in 2023. This represents a nearly 15% increase since 2021. 

  • Life Science: While the average contract length in this sector increased by a month (from 15 months in 2022 to 16 months in 2023), daily rates saw a slight dip of 3.6%, going from €582 in 2022 to €561 in 2023. However, rates remain 13% higher compared to 2021. 

  • IT: The average daily rate in the IT sector (ICT) currently stands at €547, a slight decrease of 4% year-on-year. Despite this, 68% of all contractors in this sector still command daily rates of at least €500. 

  • Engineering: Independent contractors in engineering can earn between €500 and €700 per day. This depends on their experience, expertise, and the company they work with. Notably, the Labour Court reported a 2.8% pay increase for independent engineering contractors in Ireland on both February 1, 2022, and 2023. 

If you're a skilled professional seeking financial freedom and career flexibility, contracting presents a compelling option. With the right skills and experience, you can tap into the lucrative potential of this growing market. 

Ready to explore contracting opportunities in STEM fields within Ireland? We specialise in connecting talented professionals with exciting contracting roles across the STEM landscape. Apply Today or visit our website: 

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