October 15, 2013, 2:35 PM — The percentage of contract workers on IT staffs reach 17% last year and 15% this year in large organizations -- the highest level of contractors to staff since the late 1990s, according to Computer Economics.
The earlier spike came in the run-up to Y2K, when IT shops hired contractors to assist in code remediation. In 2010 and 2011 the percentage of contractors to staff was at 6%.
Today's demand for contractors is driven by multiple factors, according to Computer Economics. There's a need for developers to work on mobile applications and big data initiatives, and it may also be a sign that IT shops "remain reluctant to hire permanent employees due to economic uncertainty," the research group said.
Permanent hiring may be rising as well, said John Longwell, research vice president at Computer Economics.
Preliminary results from the research firm's 2014 outlook survey indicate that increasing numbers of companies are starting to hire IT workers. About 20% of the firms surveyed increased IT staff headcount during the fourth quarter, and 29% increased staff work hours, he said.
"My sense is that IT organizations are hiring permanent IT staff, and we are seeing improvement," said Longwell. He added, though, that "the use of contractors has certainly slowed the need to hire permanent employees."
Longwell said the firm expects expect that its 2014 forecast, once it's completed, will be "reasonably optimistic" in terms of IT hiring projections.
The U.S. Dept. of Labor did not release employment data for last month because of the federal shutdown.
The research group also said the insurance rules in the Affordable Care Act, or Obamacare, may be having some influence on hiring and a shift to contractors.
But the large organizations it tracks "pay benefits and worry about retention and maintaining a skilled workforce."
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His email address is firstname.lastname@example.org.
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