More than half of UK organisations believe that they are paying too much for IT contractors as the traditional contracting model becomes out of step with their needs.
IT departments are in a catch 22 situation when it comes to matching IT skills availability against cost, according to new research from Morse, the business and IT consultancy. 71% of UK organisations revealed that they had traditionally used contractors to deal with skills shortages, however as we enter an economic downturn many IT departments are facing headcount restrictions and pressure to cut costs, yet are still expected to have the skills to cater for the needs of the business.
The majority of contractors require employers to hire them for a fixed contract length, so consequently many organisations find themselves financially locked into their contractors and then having to extend contracts as specific knowledge becomes siloed with them. In fact, 46% of those surveyed said that they would prefer additional in-house resource but could not afford to do so because they had financial commitments to contractors. Just over half of the respondents (52.5%) believed that they were paying too much for contractors in order to access the specific skills and experience they required.
“Employing contractors can enable organisations to fill skills gaps quickly, but on the other hand it can make the IT department less flexible and unable to respond to the changing needs of the business,” said Mike Devlin, director at Morse. “There are still traditional skills shortages when looking for people to implement new systems or replace people with legacy skills, however there is also now a demand for greater multi-discipline expertise and a need for staff to understand the wider business impact of IT. Organisations now have to pay a premium for their skills and experience. Unfortunately, this expense comes at a time when many businesses need to make the most of every penny.”
Losing skills across the business and being able to replace them effectively will continue to be a headache for many IT departments. The research revealed that 71% of organisation stated that they found it difficult to hire people with the right skills and experience. At a time when IT resources are already being fully stretched, many IT departments are finding it difficult to transform the skills sets of their staff, as they don’t have the time or capacity to provide them with training. In the long-term this could have a detrimental effect on the future performance of the business – 72% believed that a skills shortage was holding back the IT department and preventing it from taking on projects which could significantly improve the business’ bottom line.
In order to cost-effectively access skills, organisations are starting to look at practices such as flexible resourcing as an alternative to employing contractors. Flexible resourcing is essentially a managed service, whereby organisations outsource their IT needs to a third-party provider. Through flexible resourcing, organisations can access the appropriately skilled people, from a pool of qualified IT professionals, at the right time and for the required duration without being tied into a rigid contract. This enables IT departments them to be much smarter about how they are paying for the skills they need and allows them to quickly and cost-effectively create project teams or add new skills to an existing team without being locked into the person and their skill set for a long period of time. As a result, the IT department provides better support to the business, helping to create an agile organisation which can respond quickly to changing market needs.
“The research has shown that the difficulties many UK organisations have balancing their IT and business needs. Matching skills availability against cost is a significant challenge, so flexible resourcing can be an attractive proposition for many businesses as they can turn on and off resources when required rather than committing to a costly contractor for a set amount of time. There is now a strong argument suggesting that organisations should have an annually assigned flexible resourcing budget, so that they can still retain control of their IT, but also can reap the benefits of a dedicated and cost-effective skills resource,” concluded Mike Devlin.
The survey of 200 IT directors was commissioned by Morse and conducted by independent research company Vanson Bourne.
About Morse plc
Morse (morse.com) is an international consulting company, offering our clients specialist Business and IT advice and helping them execute for maximum benefit. We are a delivery-orientated company with focussed industry expertise, combining a powerful blend of management, application and infrastructure consulting skills.
Morse’s reputation is earned through providing essential industry know-how in a flexible and pragmatic style, where clients enjoy the benefits of innovative solutions and confidence from collaborating with a trusted and talented partner.
Morse infrastructure consulting provides technology and integration solutions to clients who want to make their IT more flexible and better aligned to their business goals. We offer services that include; the efficient and effective provisioning of technology, mission critical technology environments that deliver project ROI, flexible resources and architecture strategy and design.