Large Companies Double Use of Contract Labor

April, 2008

(IRVINE, Calif.) Large enterprises nearly doubled their use of contract IT workers over the past four years, according to Computer Economics, an IT research and advisory firm.

The study of contract labor trends over the past four years found that among large companies, contract workers rose from 5% of the IT labor force in 2004 to 10% in 2007. Large companies, according to the study, are those with more than $750 million in annual revenue.

The study also showed, however, that use of contract labor remained relatively steady over the same four-year period for the typical small and midsize company.

“Companies tend to hire more contract workers during the start of growth cycle, particularly if they are worried about the sustainability of the growth, as has been the case,” said John Longwell, director of research for the IT research and advisory firm. “Smaller firms may be more likely to turn to outsourcing rather than contractor workers to meet growth needs.”

Longwell said that while there are some factors favoring a long-term increase in the contingency workforce, the trend could reverse itself. Contract workers are among the first to go in a slowdown.

The Computer Economics study, Current Trends in Use of IT Contract Workers, is based on data from the firm’s annual IT spending and staffing surveys over the four-year period, each involving approximately 200 IT executives and managers.