Contracting on the rise for Malta’s ICT professionals

Contracting is on the rise within the ICT sector in Malta, according to the Castille Resources 2010 salary report. The report reveals how 86 per cent of companies surveyed said they expected to use contractors over the next 12 months, with the average company looking to contract out 10 per cent of its workload. This is a massive increase from the previous year’s findings, when only 57 per cent of organisations expected to use contracting as an integrated staffing method.

The results indicate that Malta’s ICT sector is experiencing an increasing trend towards contracting staff. This shift is something that is being embraced by IT professionals, with 82 per cent saying they would consider switching to contracting, a figure that is again up on last year’s findings.

But why the sudden shift? According to Castille’s industry report, the majority of skills that companies are looking to contract out tend to be software developers and project managers. These two positions were, not only, the two areas that the report found Malta’s ICT sector to have a skills shortages in, but they are also, by the nature of the roles, tend to be more project based positions. Both these traits lend themselves very well to the contracting model of employment for both employers and employees.

From a skills shortage point of view, having specific and specialised skills, especially ones that are in short supply, means individuals can demand higher salaries. Castille’s salary report showed that this was exactly the case for Malta’s IT professionals with 66 per cent of companies prepared to pay a 20 per cent premium, 16 per cent prepared to pay a 30 per cent premium, and 30 per cent prepared to pay up to a 50 per cent premium for contracted workers.

People with these skills know that they can receive a significant monetary reward for contracting and therefore are starting to expect higher salaries. Some larger organisations with more rigid salary bandings and guidelines are working around this by looking to use contracting as a method of acquiring staff outside of their set salary band, bands that wouldn’t normally attract the specialist skills needed.

Project-based roles lend themselves to contracting because the employer can hire skilled individuals for specific periods of time depending on the role. Also, specific skills might not be needed within an organisation on a permanent basis and contracting gives the employer flexibility to increase and decrease their team to adapt to market conditions.

The staffing model is also used more in times of economic uncertainty, when people might not be in a position to commit to having a new full-time member of staff, or as a way of getting around recruitment freezes.

Michael Mifsud, human resources manager at Mangas Gaming Malta Limited (Expekt) offered an explanation why contracting was on the rise in the Maltese ICT sector.

“The employment mindset in Malta is changing and becoming more in line with the situation in mainland Europe,” he said. “The ‘job for life’ mentality has been eroding away for some years now. The first apparent sign of this erosion was increased job mobility, interspaced by periods of recession of both a general and sectorial nature.

“By time this new employment mindset also had a bearing on the type of contractual employment relationship that is now emerging – a change that is not merely instigated by employers who do not wish to hire staff on a permanent basis, and could therefore resort to fixed term contracts, but more so by a growing population of specialised workers, experts in their own field, who prefer to work on a consultancy/ assignment basis. A looser employment relationship generates a higher income for the contracted party, but also renders a more focused and results-oriented service for the employer. The major increase in contracting staff is due to a growing pool of talent and specialised professionals.”

When asked why Expekt used contracted staff Mr Mifsud replied: “The major reasons why my organisation contracts people are, firstly the requirement of very specific and particular skills that are difficult to find in people who wish to be on a more permanent basis. Secondly, time constraints in going through a lengthy recruitment and selection process. Thirdly, transient challenges encountered both at the strategic and the operational levels of the business, requiring a specific input over a limited period of time and finally, testing of the operational functionality of particular roles before going for a full blown and more permanent recruitment process.” He also gave other reasons why organisations should consider contracting: The quicker achievement of results by highly specialised personnel; the presence of such talent will also have a knowledge-sharing effect on the other permanent staff members with whom the contracted party interacts; the reduced risk of employing the wrong person for a particular position; the possibility that the temporary contractual relationship could evolve into a more permanent employment relationship; and the flexibility to increase or decrease such resources without major constraints.

The human resources manager at Expekt also sees potential benefits to the persons seeking such jobs in ICT.

“The individuals contracted in this way benefit from higher income rates; the satisfaction of seeing their skills bringing results over a relatively short span of time; the experience of diverse working environments and opportunities; the rapid increase in personal contacts with key and influential employers on the island; and a high motivational level sustained by new challenges encountered on the different assignments undertaken.”

There are many benefits to both parties in Malta’s increase in contracting ICT professionals. As mind sets change and individuals demand more flexibility from employers, we are more likely to see additional changes to the Malta employment styles in the next few years.

Ms Hughes is brand manager at Castille Resources Ltd.