Research shows organisations are hiring IT contractors over long-term employees
Hays research highlights an increase in short-term contractual IT roles, so how does this impact partners?
New research shows technology hiring is shifting towards short-term, contract based roles rather than full-time or part-time stints.
Research from Hays IT Contractor Rates Guide shows close to 60 percent of employers engage contract, freelance or temporary workers to access specific skills for one-off projects.
As organisations focus on accelerating delivery and addressing critical capability gaps, contractors are becoming an increasingly important part of the technology workforce.
But does this mean that IT partners are losing out to contractors? Peter Marinis, regional director of technology, ANZ at Hays doesn’t think so.
“What we're seeing is less a shift away from MSPs and solution providers and more a response to ongoing skills shortages,” he said.
“Our research found that 83 percent of employers identify technical and digital skills as the most in-demand capabilities, while specialist hiring is the top workforce priority for many organisations.
He continued, “As a result, businesses are increasingly looking for rapid access to expertise in areas such as AI, cybersecurity, data, and digital transformation, whether that's through contractors, managed services or consulting partners.”
Chuong Mai-Viet, managing director at Fuse Technology isn’t worried about contractors taking his job.
“The biggest challenge a contractor has is he's a one-man band,” he said.
“How is he going to do 24/7 monitoring? How is he going to handle the security alert in the middle of the night? How's he going to go on holidays? And does he have the bandwidth and the experience with the airport across multiple industries like we do?”
Mai-Viet agreed that contractors are good to a certain size, but there is a limit once they start overloading their plate.
“We use contractors to augment our business from time to time, but we actually win business from people that are being handled by a one man band,” he said.
Impact of talent shortage
As the talent shortage continues across the industry, Marinis said it is “accelerating” the demand for IT contractors.
"Organisations are struggling to find specialist skills in areas such as AI, cybersecurity, data, and digital transformation,” he said.
“With 83 percent of employers identifying technical and digital skills as their most in-demand capabilities, many businesses are turning to contractors to access expertise quickly and keep critical projects moving.”
At the same time, Marinis noted, technology is evolving faster than many organisations can upskill internally.
“As a result, contractors are increasingly being engaged to fill immediate capability gaps, particularly on transformation and AI-related initiatives. Rather than simply addressing short-term resourcing needs, contractors are helping organisations overcome skills shortages and accelerate delivery of strategic business outcomes,” he added.
Market evolution
Over the next 12 months, Marinis said he expects the IT contractor market to remain active but highly targeted.
“Demand will continue to concentrate around AI, cybersecurity, data, cloud and digital transformation, with organisations prioritising specialists who can deliver measurable outcomes rather than broad-based hiring,” he said.
“We're also likely to see increasing demand for professionals who can combine technical expertise with governance, security and business transformation capability as AI adoption matures.”
While overall contractor rates are likely to remain broadly stable, Marinis said niche skill sets will continue to command a premium.
“As organisations navigate ongoing skills shortages and evolving technology priorities, contractors will play an increasingly important role in providing the agility and specialist expertise needed to accelerate critical projects and transformation initiatives,” he ended.