The trend towards hiring people on a contract basis rather than permanent really kicked off in Australia as we came out of the recession in the early 1990's. This was mainly because so many companies had to lay so many people off and make heaps of redundancy payments. Even big high profile companies who had never previously made people redundant en masse found themselves having to do so. In some cases whole divisions of companies were axed, some of which had been recruiting like crazy only six months before.
There were several reasons that companies preferred a greater temp/contract component of their workforce. Coming out of a recession they were uncertain what the future held in terms of the strength of the recovery so did not have the confidence to employ people on a permanent basis. Many managers did not have the authority/budget to increase their headcount, but temp/contract staff were not usually treated as staff headcount. Some companies did it to avoid huge redundancy payments in the future and others did it because they didn't want to be seen to be retrenching permanent staff.
The trend has stayed with us ever since, particularly as companies have realised that they can successfully utilise quite senior people on a contract basis and they often have the option to convert them to perm staff down the track. Also as unfair dismissal laws keep changing some companies use temp/contract labour as a matter of course like a "try before you buy" basis.
As for
HR jobs, from our perspective (operating
Jobs in HR), in recent years there have constantly been a large number of
HR roles offered as contract positions, so I don't think there are necessarily
more contract
HR jobs now, just fewer permanent opportunities.
On a positive note however, the overall supply of new
HR jobs (contract & perm) has been trending upwards for several months now. The market is still way off where it was in mid 2008 but we are moving in the right direction!