Intelligence: Bits and bytes of computing data

Focus on employment costs?preferred supplier agreements gain popularity? use of contractors set to increase in finance and manufacturing?spend on permanent staff is declining

The way IT departments spend their staff budget is changing. There is a greater use of contractors, while a decreasing proportion of the budget is spent on permanent staff, according to Computing Intelligence?s latest survey. Preferred supplier agreements, where companies use only a few selected IT recruitment agencies to source staff, are now widespread. Spikes Cavell believes that permanent IT staff are more often paid from centrally-held budgets, while contractors? fees come from the IT department?s budget. In large companies, IT staff are increasingly employed and paid by individual business units. One result of this is that group IT directors have less control over day-to-day issues and focus more on overall strategy.

Since our last survey in March, the proportion of IT staffing budget spent on contractors has grown, particularly in the finance and manufacturing sectors. This may indicate that year 2000 projects are getting underway in earnest.

The small firm picture is polarised: 55% of IT directors in small companies expect spend on contractors to expand in the next 12 months. 27% expect contractor budgets to shrink. Fewer medium and large company IT directors expect expansion, and fewer forecast decreases.

Few IT directors expect the proportion of budget spent on permanent staff to decline over the next year. Many large companies ? typically quoted, and therefore with big responsibilities to shareholders ? believe staff costs will remain stable. Pressures of work on year 2000 and EMU could prove them wrong.