IT Contractor Employment Expected to Rebound

June 20, 2002 ( - While the shaky economy has prompted companies to pare down the number of IT contractors it hires, many are expected to reverse course when their financial picture rebounds, a study found.

The 2001 IT Contractor Compensation Survey by people3, Inc, Gartner Inc and Mercer Human Resource Consulting found that 36% of the companies contacted said they expected to increase their use of IT contractors by late 2002. Some 33% of respondents anticipated an IT contractor decrease, and 31% projected no change.

In the compensation area of the study, researchers said companies pay much more for contractors who are better at what they do. Generic skill categories such knowledge of programming languages, beef up the salary being offered, the study found.  Networking experts are also highly paid.

According to the survey, an outside contractor typically is paid two to three times more than a full-time IT employee in the same position. For example, the average contract rate for an applications systems analyst/programmer is 274% of the rate for a full-time employee in this same position.

The November 2001 survey covered 36 organizations, which collectively employ more than 6,200 IT contractors.