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US CIOs opting for IT contractors over hiring full-time staff

Sharon Florentine | Dec. 3, 2013
The Bureau of Labor Statistics paints a dark picture of the IT job market, but theres a bright spot -- CIOs are hiring more skilled IT contractors.

The latest Bureau of Labor Statistics data reveals that over the last 12 months, only 77,600 IT jobs were added, as CIOs and hiring managers remain cautious about the slow economic recovery, says Victor Janulaitis, CEO of Janco Associates, a management consulting firm that specializes in IT.

According to the BLS data, September's IT jobs number was adjusted down from a gain of 2,500 jobs to a loss of 3,600 jobs. At the same time, the number of jobs reported as gained in October was only 5,200. But amid these dismal numbers, Janulaitis says, there's a bright spot companies are increasing thier budgets for hiring skilled IT contractors.

CIOs Reluctant to Hire, Eager to Contract

"They all need larger budgets and staff to deal with this but are reluctant to hire new, full-time employees," Janulaitis says.

That's where IT contractors come in, according to IT recruiting, staffing and consulting firm Mondo. A recent survey of more than 200 IT decision makers in combination with data from Mondo's network of contract IT placements reveals that 48 percent of respondents plan to hire more IT contractors than full-time staff in the next year to 18 months, and 32 percent expect to increase their annual budget for hiring IT contract workers, says Laura McGarrity, Mondo's vice president of marketing.

"Budgets for contract spending are increasing, especially in the media, communications, publishing and higher-ed markets," McGarrity says.

"What we see from our clients is they are using those budgets to invest in IT contractors skilled at maximizing and squeezing additional value out of their existing technology platforms. They need Web developers, application developers, and mobile development professionals, and also a lot of that spend is being pushed toward marketing," she says.

According to the Mondo survey, 73 percent of survey respondents currently use contractors for application development, Web and mobile development, application hosting and application maintenance.

Thirty percent of respondents indicated they plan to outsource more application development work and 27 percent plan to outsource more mobile and web development in the next 12-18 months, according to the survey.

Peter Cannone, CEO of IT contract staffing and workforce-as-a-service provider OnForce says the findings are consistent with what his company's clients are experiencing.

Demand for IT Contractors Is No Fluke

"Demand has definitely increased for IT contractors," Cannone says. "For our clients, they are facing an aging workforce, and they want to leverage existing technology to the fullest without increasing budgets for full-time hires," he says.

"They want to build a flexible workforce, streamline and drive cost efficiencies, and they are asking us for help to save anywhere from 30 percent to 60 percent off the bottom line," Cannone says. That demand has increased monthly applications to OnForce's Workforce-as-a-Service solution increase from about 750 applicants per month to around 1,000 applicants per month, Cannone says.


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