Milkaukee/Mumbai: Skill shortage is at maximum levels in the IT sector, which influences the composition of workforce. The IT sector is one of the largest employment generating sectors in India. On in-country IT hiring practices, India depends heavily on permanent employees with 62% while in Germany the share of permanent employees is 63%, according to a survey of senior IT managers across ten countries, conducted by Experis, the professional resourcing and project-based solutions arm of ManpowerGroup.
Globally, companies are leveraging expertise among permanent, contract and freelance IT workers, which is helping them to find their workforce better positioned to overcome talent shortages, improve business agility and flexibility, build an internal talent pipeline for the future and preserve organizational knowledge.
There is great variation across markets when it comes to in-country IT hiring practices: Germany (63%), India (62%) and Australia (58%) rely heavily on permanent employees, while the UK (30%), France/Italy (36%) and the U.S. (40%) take a more agile approach to workforce composition, balancing out their use of permanent employees with contractors.
The report mentioned that US employers are increasingly exploring hybrid workforce solutions by including more contractors and freelancers – just 41% say they rely solely on permanent staff US employers lag behind global competitors in their overall use of contractors, but many plan increases.
“As employers continue to be challenged by fast-changing business cycles and growing talent shortages, many are exploring alternative work models to find the skills they need,” said Sean Costello, Senior Vice President of Experis, North America. “This is especially true in the IT sector, where skills requirements are constantly evolving and the demand for talent is high. The contractor model is often well-suited to this environment, because it offers greater flexibility, and tends to attract the kind of self-motivated individuals who prioritize on-going skills development. Employers that explore all talent options generally have an easier time finding the skills they need.”
Employers have a clear preference for more flexible workforce mixes when hiring for IT talent overseas compared to their hiring habits at home. One exception is India, a large exporter of IT contracts, with a majority of employers (46%) relying solely on contractors when operating abroad. The use of IT contractors is a growing trend, with 71% of employers across the globe currently tapping contract talent and an anticipated net increase of +13 in the future.
India and Brazil report the highest use of contract work (87% and 83%), while other countries such as the U.S. (66%), Japan (65%), Australia (59%) and Germany (40%) are slower to adapt to meet these changing needs. Companies in the U.S. plan to accelerate their use of contract work in the future, but the most contract growth will come from BRIC markets such as India, China and Brazil.
There are many benefits to using contract work: contractors bring greater cost savings and more flexibility — two things that are increasingly important for businesses in the volatile IT environment. Experis urges that IT leaders rethink hiring strategies in order to strike a more effective balance between permanent and contingent solutions, better positioning their workforces to keep pace with the changing dynamics.
