The use of IT contractors in federal government procurement activities is low and will remain so for a while longer, despite a recent surge in contracts signed, a Federal ICT Hire Labour Index has shown.
The Labour Hire Index, compiled by Peoplebank and Intermedium, measures the cost of an average unit of labour hire paid by the Federal Government to IT contractors.
Peoplebank Intermedium's Labour Hire Index (Credit: Peoplebank Intermedium)
In April this year, the index reached an all-time low of 763 points. Peoplebank said that these numbers were likely influenced by the approaching 30 June deadline for federal agencies to show their progress on reducing contractor numbers as outlined by the Gershon ICT review.
The average duration of a contract position has also been on the decline, down from 170 days in 2008/09 to 156 days in 2009/10.
Peoplebank did, however, note an upswing in the index in the lead-up to the 2010 Federal Election, purportedly in an effort to hire pre-emptively, before caretaker provisions restricted new staff additions.
IT contractor numbers are still down despite this spike, according to Peoplebank, and the company's chief executive officer, Peter Acheson, didn't believe that would change until next year.
"Despite the July spike in demand, the conflicting pressures on the ACT market are likely to keep it relatively flat for the coming months," Acheson said.
He added that the ongoing decline in IT contractors would lead to a government skills shortage going into 2011.
"It's important to note that with there have been few or no new ICT professionals entering Canberra's contractor market. Which means there is limited capacity to provide resources for new projects — and this skills shortage is likely to start becoming an issue in 2011."