The IT freelance economy is growing, but not at large firms

The IT freelance economy is growing, but not at large firms

The type of company you work for may have a lot to do with whether you're a full-time employee or a contract worker.

The type of company you work for may have a lot to do with whether you're hired as a full-time employee or a contract or contingent worker.

Large, end-user companies, those with IT operating budgets of at least $20 million, are cutting back on contract workers after years of expanding their temporary workforces, according to new data by research firm Computer Economics.

But two other surveys that look at a broader group of firms see a reliance on contingency workers that is, overall, on the rise.

Computer Economics said the number of contract workers compared to regular workers declined this year to 10% at large firms, after rising in recent years. In 2012, contract workers accounted for 17% of the IT department workforces and in 2013 it was at 15%. The survey covered about 200 firms.

"There's a good explanation why it is trending down - because people are hiring," said John Longwell, Computer Economics vice president for research. He credits a stronger economy for the shift.

Small and mid-sized organizations were lagging behind, but are also beginning to hire more full-time IT staffers and reduce dependence on contractors, said Longwell.

Data from Staffing Industry Analysts (SIA), which counts both IT and non-IT hiring, says reliance on temporary workers is rising overall, and is now at 18% of the overall workforce, a similar percentage to 2013. But the trend is strongly moving up (contingency workers were at 12% in 2009) and is forecast to rise to 20% in two years.

SIA gathers its data from contingent workforce managers at companies with more than 1,000 employees. Nearly 175 firms were surveyed.

Although IT workers are included in that broader percentage, Jon Osborne, the vice president of strategic research at SIA, said that 60% of the firms surveyed said IT workers are their top use of contingent worker.

Osborne also said that IT contingent workers are paid more on an hourly basis than permanent workers. "If you're very much in demand and have a skill that is really needed, you're more financially better off working on a contingent basis," said Osborne.

Osborne knows of some tech firms with about 50% of their workers on a contingent basis; that, he suspects is the logical limit of a permanent-versus-contingent mix.

IT staffing firm TEKsystems, which surveys IT hiring across industries, said its latest data from an unpublished survey shows both full-time and contingent hiring increasing in 2015. Its data shows that 40% of the firms it surveyed plan to increase their full-time IT staff next year, up from 38% this year. As for contingent workers, 36% plan to increase hiring in 2015, up from 24% this year.

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