Contracting Is Hot Again!!

CONTRACTING IS HOT AGAIN!

CA4IT Inc. recently held their semi-annual National Conference in Toronto. CA4IT Inc. provides business services to Chartered Accounting firms serving over 3,500 knowledge based workers (KBW) through partner accounting firms in Vancouver, Calgary, Edmonton, Winnipeg, Toronto, Ottawa, Montreal and Halifax. Speakers at the Conference included representatives from Ajilon, Procom and Contractors Network Corporation, who collectively provide their clients with approximately $2 billion in KBW contracting services in Canada. Comforce, from the USA who provide over $700 million US in KBW services, was also represented.
The general conclusions reached included the following facts:
1. The Canadian KBW industry is currently lagging approximately one year behind the USA.
2. USA demand for KBW services is beginning to surpass pre-Y2K levels.
3. Canada will soon be following in the footsteps of the USA.   
Although contracting in KBW was slow to be accepted in the USA, more and more companies are beginning to realize that it is a 12 to 16 week process to hire a permanent employee versus a ½ hour to 8 hour process to hire a contractor. Permanent positions with stock options have failed, with few exceptions, for most companies as a strategy for attracting knowledge based workers. A rare exception, for example, would be a company such as Nortel. NAFTA makes the Canadian market more readily accessible, and in this time is money" era, along with the rush to get KBW projects completed, contracting is becoming the process of choice. Supported by the above market factors, the use of contractors is seen as a more effective staffing strategy. Employers are able to offer independent contractors up to 50% more than permanent employees due to the absence of benefit programs and training costs. These factors, coupled with the ability to staff projects on an as required basis and a speedier hiring process, are significant advantages. As a recent Intel ad conveyed, In the surge economy, 3 year growth projects are emailed every Monday morning." In these times corporations are seeing independent contractors as the tool for meeting project time and budget goals. There is also the fact that KBW contractors can virtually double their after tax income as a result of the 50% increase in income combined with tax advantages that allow independent contractors to pay the government an average of 18% of their gross personal income. Contractors also provide the flexibility to staff projects with a pool of talent that can hit the ground running. All of the preceding reasons have been compelling factors in the resurgence of contracting in Canada. Representatives of contractors are hoping that clients who are developing IT projects in Canada wake up to this opportunity before it is too late, as the USA is aggressively mining our contractors and the supply of talented KBW contractors is likely to diminish quickly. As the dawn of this post Y2K boom approaches, CA4IT Inc. believes knowledge based workers acting as independent contractors will be the engine driving this new roaring technological economy.

George Wall, CA4IT Inc.
20 Adelaide Street East, Suite 400, Toronto, ON M5C 2T6
Tel: (416) 487-4300, Fax: (416) 487-8045