Why IT Contracting Jobs are Becoming More Popular in Tech

Contracting inside the IT industry has never been hotter.

According to a recently published IT Contingent Workforce Guide from Motion Recruitment, the percentage of IT contract roles has tripled during the past two years — making up 1 out of every 5 tech jobs. In fact, nearly 90% of enterprise employers said they would maintain or increase their budgets this year, shifting funds from a focus on permanent employees to contractors.

“With 76% of technology employers struggling to fill roles and layoffs creating questions around what stability really is, the market is leaning into an expanding contingent workforce,” said Matt Milano, President of Motion Recruitment.

Over the past few years, IT contracting jobs have become increasingly popular due to the rise of the gig economy and the need for organizations to quickly scale up or down their IT operations, among other factors.

Supporting the new remote/hybrid work environment and the amount of data clients need to process and analyze means organizations are continuing to invest in tech contractors, no matter the ups and downs of the market. For example, job postings for software development and backend engineers more than doubled in 2022 compared with 2021.

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Here are some trends in IT contracting that are driving its popularity:

Remote work: Remote work is a trend that isn’t going away. No longer bound by geography, IT contractors can work from anywhere in the world as long as they have access to the necessary technology and communication tools, which increases the pool of available talent.

Expedited hiring process: One potential advantage for an IT contractor is that the hiring process may be more streamlined since they are usually brought on for specific projects or assignments. This can mean that the hiring process may be quicker and less involved, with a focus on the contractor's technical skills and experience rather than their fit with the company culture or long-term potential.

Specialized skills: As technology becomes more complex, there is a greater demand for IT contractors with specialized skills, such as cybersecurity, cloud computing, data analytics, and AI. According to Gartner, more than half of enterprise IT spending in key markets will shift to the cloud by 2025. One of the benefits of hiring IT contractors is the flexibility they offer to companies, allowing them to hire specialized skills for a particular project or time period without committing to a long-term employment contract.

Short-term contracts: Organizations are increasingly looking for IT contractors for short-term projects, rather than long-term contracts. This allows organizations to quickly scale up or down their IT operations based on their needs. This is especially important in the numerous digital transformation efforts taking place across industries. When these efforts are completed, contractors can either be reassigned to another project, hired full-time, or be released in a planned downsizing.

Demand for flexibility: Today agility is the name of the game. IT contractors are often hired to provide flexibility to an organization's IT workforce. This means that they may be asked to work odd hours, be available for on-call support, or work on short notice.

Cost Reduction: Some companies may prefer to work with contractors to reduce overhead costs and minimize employee benefits, although hourly pay rates are typically slightly higher for contractors than comparable permanent salaries. Additionally, you can hire contractors on a project-by-project basis, which means that you don't have to keep them on staff during slower periods or pay for their time when they're not actively working on a project.

Here are a few tips for hiring managers who are looking to hire IT contractors and help keep them productive and happy:

Clearly define the project scope: Before hiring a contractor, make sure that the project scope, timelines, and deliverables are clearly defined. This will help you identify the specific skills and experience needed for the project and ensure that the contractor is a good fit.

Evaluate multiple candidates: Don't just hire the first contractor you come across. Take the time to evaluate multiple candidates, review their portfolios and work history, and conduct thorough interviews to determine whether they have the right skills and experience for the project.

Be clear on the terms of the engagement: Make sure that the terms of the engagement, including payment, hours of work, and deliverables, are clearly outlined in the contract. This will help avoid any misunderstandings or disputes down the line.

Communicate effectively: Establish clear lines of communication with the contractor, including regular check-ins and progress updates. This will help ensure that the project stays on track and that any issues or concerns are addressed promptly.

Consider cultural fit: IT contractors may work with various teams, so it's important to evaluate their cultural fit with the company and any teams they will be working with. This can help avoid any potential communication or coordination issues. Top contract workers are looking for places where there are opportunities to grow skills and possibly have a clear path to go from a contract to a full-time role.

Use a staffing agency: Overall, using a staffing firm to find IT talent can help companies save time, money, and effort while gaining access to a larger pool of qualified candidates. All of the above tips can also be expedited by using a staffing agency to find, prep, onboard, check in with, pay and address any problems with your contracting talent. They are your buffer against any unforeseen concerns that may derail a successful engagement.

Have you been affected by tech layoffs or are looking for the next steps in your IT career? Contact your local Motion Recruitment office today to speak with one of our recruiters about how we can help you take the next step in your tech career - and interview with real hiring managers with real jobs.