In lean times, a tale of two IT contractors

In lean times, a tale of two IT contractors

Summary: For IT contractors, a recession can be either the best or worst of times--some struggling businesses shed consultants first while others ramp up contracts to get them through a bad cycle.


For IT contractors, a recession can be either the best or worst of times. On the positive end of the spectrum, when businesses get nervous about making new IT investments they often bring in freelance techies to sidestep hiring permanent staff, hoping these individuals can provide a buffer against shedding full-time staff should they have to put the quick brakes on a project.

But on the flipside, freelance workers are often the first thrown off a ship struggling to maintain its weight. In a new study, by giant, a UK consultancy, IT contractors said that they were getting nervous, with 56.9 percent saying they were not getting all the work they would like to have. Others, too, have seen good reason for IT contractors to be nervous as the economy heads into lean times.

Like most IT employment outlooks, the fate of IT contractors in this recession is likely to come down to skills, and whether they have the ones companies want to pay up for. In many ways, economic uncertainty can expedite momentum that was already in place, such as the outsourcing or elimination of support roles.

Yet IT contractors working on projects that help companies run more leanly are finding no shortage of work. Organizations trying to reduce costs need people that can help, whether through consolidation or green technologies.

"For Sysadmin people and developers, this slowdown is a bad thing," said a contractor for a large IT services firm. "But for those who help businesses consolidate, with heavy SOA or virtualization skills, there's a lot of money to be made in consolidation gigs and strategic outsourcing--all of those things that mean reducing hardware."

In many ways, what happens in a slowdown is all part of the double-edged sword that is the freelance life--having to go with the flow of business confidence.

"We've seen companies say they'll get rid of contractors first because that's an expense or overhead they can't handle," said vice president Robert Half Technology, an IT recruiting firm, John Estes, though underscoring that he's seen just as many step up their use of contract employees.

"Other companies say they'd like to use contractors because they say they don't have the FTE headcount budget. Right now, we're seeing steady hiring across the board, both contractors and IT staff."

Consultants that have been in the game long enough have come to expect workflow swings as the economy sputters along.

"Contractors are generally the first to feel the pinch when times get tough, but they are also the first to benefit when things begin to turn around," said Scott Duffy, a Toronto-based software development consultant. "Certainly when business owners begin to get nervous about where the economy is heading, they stop hiring full-time employees and begin to simply use contract resources until there's confidence there is enough work to keep someone busy all day every day."

Topic: CXO

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  • Cognitive dissonance

    Contractors are both hurt and helped by a slowdown; companies both get rid of contractors and hire them. What to make of this?

    Perhaps calculus would help - do companies increase or decrease the rate of this churn during a slowdown? What is the trend in the derivative?
  • Highly skilled specialists are always in demand...

    Highly skilled specialists are always in demand... (Provided they have skills that the market is interested in...)

    When someone asks what they should learn about in order to get work -- I suggest there are two considerations:

    a) What is in demand in the marketplace, or

    b) What they like to do and are excellent at.

    The first gets you a job and earns you a living -- the second gives you a rewarding and satisfying life, but may not pay the bills.

    Not everyone will ever have their 'dream' job -- but if you take care of 'business', you can have enough money to enjoy some pretty rewarding hobbies and enjoy a lot of the finer things in life.
    Marty R. Milette