The downturn has caused companies to lay off thousands of employees in order to remain profitable.
The IT industry has been affected also and companies like Microsoft have laid off 5,000 employees.
However, it seems that companies don‘t want to cut back on crucial IT projects which they see as important to the future competitiveness of the company.
So, many of them are taking on IT Contractors to fill the gap left by employees.
This is mitigating the downturn this time around for IT Contractors who are not nearly so badly hit as last time when the dotcom boom came crashing down.
According to one recruitment company:-
‘The solution that most of IT companies are turning to in this economic recession is contract labour. Hiring IT contract workers has a number of advantages that are particularly appealing during tougher economic times.
‘First, the worker is not part of the full-time staff – so benefits, unemployment insurance, or holiday and vacation pay do not need to be paid on his or her behalf. These are the responsibility of the worker and his or her temp agency.
‘Second, because of the cost savings and flexibility this creates, companies may be able to bring in more experienced and talented professionals thus providing companies with more hiring options. In addition, the company has the flexibility to increase or decrease their staff as needed without having to resort to layoffs and downsizing.
‘Unemployment benefits and severance packages are also not required when a contract IT professional is no longer needed.
‘IT companies benefiting from switching to contract labor are not alone.
‘IT professionals who have been recently laid off from their jobs can benefit from contracts as well by using their experience to land contract positions which usually pay more than full-time and provide them with more flexibility as they are not tied down to a single company’.