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The ‘come and go’ nature of freelance work will convince technology organisations to keep capping the number of IT contractors they hire now and into the future. As the knowledge a contractor acquires about a tech business is lost when their contract expires, these clients will retain a limit on their intake to stem a ‘brain drain’ from their outfit. For this reason, and others intrinsic to non-permanent work, Computer Economics believes that future long-term growth in IT contractor hiring by tech clients will be “modest” at best. Such growth will be led by large clients – business with turnover of $750m-plus, which have already hiked their IT contractor intake from 5% in 2004 to 10% of their IT workforce last year. The California-based group said its calculations about IT contractors indicate that outfits that were already big users of IT contractors stepped up their intake between 2005 and 2006. After interviewing 200 US IT leaders, the firm said the upswing in IT spending and project work does tally with a more intense use of contractors in large outfits, but not smaller ones. In the three years since 2004, the biggest end user of IT contractors was retailers, followed by financial services organisations and insurers, ahead of manufacturers and distributors. Pinning down universal trends about IT contractor use is difficult, not least because some IT workforces are 50% freelance, while others make little or no use of freelancers. However at the start of an upswing, clients tend to hire temps to meet their needs until they are certain the new business is sustainable, said John Longwell, Computer Economics’ research director. A rise in IT contractor hiring is also expected during times of relative economic growth, as well as “relative uncertainty about the sustainability of that growth.” However, the recruitment of non-permanent IT workers is likely to fall and even “reverse” during any “sustained downturn in technology spending,” Mr Longwell warned. Reflecting on the future IT contract hires, he told CUK: “We anticipate that contract worker usage will continue to rise and fall with the economic cycle “While some organizations will turn aggressive use of a contingent labor force into a strategic advantage, most IT organisations require stability. “IT managers often find that contract workers cost more, are less loyal, and increase [staff] turnover rates. “When they leave, they take institutional knowledge with them. For such reasons, typical IT organisations will continue to place a limit on the use of contract workers. “There may be some long-term increase in the use of the size of [the] contingency workforce, but that increase will probably be modest and confined to a relatively few organisations.” Computer Economics said that in the typical IT shop today, about 5% of the IT workforce is composed of temporary contract workers. Its study cited business analysts, project managers and Java and .Net programmers as among the top IT contractor roles that have been more in demand over the last four years. May 7, 2008 Email this article Printer friendly page Previous Page
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