Two-thirds of US companies turn to IT contractors to overcome talent shortages and improve workforce flexibility, according to research released by ManpowerGroup’s (NYSE: MAN) Experis division. And one in five US employers plan to increase use of IT contractors.
“As employers continue to be challenged by fast-changing business cycles and growing talent shortages, many are exploring alternative work models to find the skills they need,” said Sean Costello, senior VP of Experis, North America. “This is especially true in the IT sector, where skills requirements are constantly evolving and the demand for talent is high. The contractor model is often well-suited to this environment, because it offers greater flexibility and tends to attract the kind of self-motivated individuals who prioritize ongoing skills development. Employers that explore all talent options generally have an easier time finding the skills they need.”
The research found great variation across markets when it comes to in-country IT hiring practices. For the US, this includes:
- All permanent employees: 41%
- All contract workers: 1%
- a mix of mostly permanent employees and contractors: 6%
- A mix of mostly freelancers and permanent employees: 2%
- A mix of all three (permanent employees, freelancers and contractors): 5%
Other highlights from the research include:
- There is great variation across markets when it comes to in-country IT hiring practices: Germany, 63%; India, 62%; and Australia, 58%, rely heavily on permanent employees. Meanwhile, the UK, 30%; France/Italy, 36%; and the US, 40%, take a more agile approach to workforce composition, balancing out their use of permanent employees with contractors.
- Employers have a clear preference for more flexible workforce mixes when hiring for IT talent overseas compared to their hiring habits at home. One exception is India, a large exporter of IT contracts, with a majority of employers, 46%, relying solely on contractors when operating abroad.
- India and Brazil report the highest use of contract work, 87% and 83%, while other countries such as the US, 66%; Japan, 65%; Australia, 59%; and Germany, 40%, are slower to adapt to meet these changing needs. Companies in the US plan to accelerate their use of contract work in the future, but the most contract growth will come from BRIC markets such as India, China and Brazil.
