IQNtrospective 2Q12.2 – Spending on the Next Big Thing
Renewed Investment Drives up Bill Rates for Selected IT Roles
Bill rates for temporary IT roles fell during the Great Recession and remained depressed throughout 2009 and 2010. This period of slack demand for IT talent corresponded to reduced corporate investment in new information systems. Global companies were also leveraging their mature offshore IT programs to meet stringent cost reduction goals for ongoing operations. The combined effect for IT bill rates at the end of 2010 was a drop of more than 3% below 2008 levels, even before allowing for inflation.
The direction of overall temporary IT bill rates changed in 2011, beginning a slow rise that has continued for 18 months. Rates for IT roles are not rising uniformly, however. Closer inspection reveals that bill rates for skills and experience typically associated with new system design and development are rising at a moderate pace, while bill rates for job titles more involved in operations and maintenance have declined steadily since the beginning of 2011.
Temporary Worker Rate Change (IT: ‘Next Big Thing’ vs. Maintenance)
What the data tells us…
The chart on page 6 illustrates rise in temporary labor bill rates for talent required to staff new development projects corresponds to renewed corporate investment in capital IT systems (Bureau of Economic Analysis, 2012). System upgrades and replacements that were deferred during the worst of the economic downturn became more of a necessity beginning in 2011. This, in turn, created demand for IT professionals with the skills and experience to deliver these new development projects. The increase in demand for roles such as architects and software developers has caused rates to rise selectively. Bill rates for jobs usually associated with operations, maintenance and support continue to exhibit weak demand and falling rates.
Why is this important?
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