A pause in companies hiring IT contractors and other professionals in the industry is a sign that the industry is "right sizing", not downsizing, according to one expert.

McGregor Boyle's latest recruitment index said that IT contract vacancies at the end of 2010 were at around half of their peak earlier in the year.

She said that this drop could be unexpected to some but it is important that companies do not over hire.

The company's managing director Laurie Boyall said: "While the first half of 2010 showed a sharp increase in opportunities we have now seen organisations hitting the pause button."

This comes as Tom Hadley, director of policy and professional services at the Recruitment and Employment Confederation said that contractors allow small businesses to take on staff quickly as and when they require them.

"There's been an increase in temping, and looking ahead we think that trend might well accelerate because there's an indication that employers will be using flexible staffing whilst there is still a lot of economic uncertainty" he continued.