As Contracting Increases, Wages Do Slightly

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My colleague Ann All wrote earlier today about InformationWeek's 2011 Outsourcing Survey that found an increase in companies' use of "gig" contractors, temporary workers who perform key tasks on a long-term basis-and their intent to outsource even more.


In the survey, 72 percent of respondents said they use gig workers, with 45 percent saying it's a new approach for their companies. So now giant service providers like IBM and HP find themselves "competing more against nimbler, hungrier startups and pros working through individual marketplaces, at least for project work," says Michael Healey, president of Yeoman Technology Group.


Industry analysts Foote Partners noted in the labor reports last fall that the tech job growth that was occurring was taking place in contracting and managed services. And contingency hiring firm Yoh reports that wages for contract workers in the first quarter have been creeping back up. It's a modest rise at best, but an increase nevertheless.


Among the projects for which companies are hiring contractors: application development projects, cloud computing and ERP initiatives.


Hiring contingent labor can be especially prudent during mergers and acquisitions, when companies often maintain dual tracks of operation. Highly skilled temporary workers can move programs and initiatives forward, while not adding to long-term labor costs should the deal not work out, Yoh says.


A Yoh blog post points out that for new graduates still trying to find a direction in their careers, temp work can provide good experience and a chance to build their professional network. It can be their foot in the door to a full-time job. The same also can work for more experienced IT pros looking for a new direction. In fact, another post says:

... for the first time in years, many employees are contemplating a shift to the temporary market as a way to improve their career and income prospects. As others recognize the possibility for success here and follow suit, we'll likely see a domino effect on wage acceleration.

Hmm. "Contemplating" a shift to the temporary market. I've written before that most of us still look for the security of a full-time job, but that certainly could be changing.