Temporary hiring took off in 2010, and IT is leading the way.
"IT staffing is showing some of the faster growth," said Andrew Steinerman, a business and education services analyst at JPMorgan. "It's not only cyclical but also for secular reasons."
Companies are hesitant to make full-time hires in a tentative recovery yet need to restart projects halted during the recession. Some also are making a permanent change in the way they manage their workforce, choosing to rely on temporary IT staff instead of hiring full-time.
"What we have seen is an increase in projects and initiatives that were put on the shelf," said John Reed, executive director of Robert Half Technology, the San Francisco-based technology staffing division of Robert Half International. "Many times, companies are bringing in external consultants, subject matter experts, because they may not have that kind of expertise on staff. A lot of the hiring we've seen has been related to [software and hardware] improvements."
A Robert Half Technology quarterly survey projecting temporary and permanent hiring activity in the first quarter of 2011 showed that 83% of technology executives expect their companies will invest in IT projects this year.
A Rising Tide
Almost 500,000 temporary jobs have been added to the workforce since 2009, a 16% increase, according to the January U.S. Bureau of Labor Statistics report. Temp jobs were up 0.7% last December from the previous month, despite the usual year-end lull in projects, which has historically lead to an average dip of 1.5% in temp hiring in December.
"As is frequent in this cycle, a lot of organizations are finding that they can run productively with a lean staff," said Joel Capperella, vice president of client solutions at Yoh, a Philadelphia-based technology staffing firm.
"And to fill in the gaps, they use external services. But the composition of the workforce has gone through a bit of a metamorphosis lately to incorporate external help, and they're now being viewed as a part of the regular workforce."
Relying on temporary labor also guards against losses and instability in future downturns, staffing experts say.
"A conscious decision has been made to increase the strategic use of flexible workforce solutions," said Richard Wahlquist, president of the American Staffing Association. "This reflects the reality that economic cycles do happen. And they don't want to go through the pain and cost of permanent workforce reductions and the upfront costs of hiring -- the screening and search and testing -- those costs can't be recaptured."
About 80% of employers expect the size of their non-employee workforce to say the same or increase, according to an annual workforce trends study conducted among 200 national businesses by Yoh.
Hot Hiring Sectors
Data intensive sectors such as banking, financial services and the healthcare industry will see some of the strongest demand for IT expertise, according to reports from JPMorgan.
The Robert Half survey showed CIOs in the health services sector were most likely to hire this quarter, with 18% of them saying they plan to expand their IT departments this year as they compile electronic health records. The survey was conducted among some 1,400 CIOs of national businesses.
The financial services sector is planning to increase its investment in external IT consultant help by 5% this year, according to Gartner research. Some of the skills most in demand, according to the Robert Half technology survey are in network administration, and security and software development.
"We're seeing a lot of requests surrounding data security, regulatory compliance and software implementation," said Melisa Bockrath, senior director and IT product leader at global staffing firm Kelly Services. "Basically, [Employers] are looking at a workforce solution model that gives them flexibility. And [hiring temp workers] gives them access to talent they might need."
Write to Sindhu Sundar
