Your next job, next year, may be self-employment
Tech industry sees a shift to independent workers -- and different kinds of opportunities for IT pros
The tech industry is seeing a shift toward a more
independent, contingent IT workforce. And while that trend might not be bad for
retiring baby boomer IT professionals, it could mean younger and mid-career
workers need to prepare to make a living solo.
About 18% of all IT workers today are self-employed, according to an
analysis by Emergent Research, a firm focused on small businesses trends. This
independent IT workforce is growing at the rate of about 7% per year, which is
faster than the overall growth rate for independent workers generally, at 5.5%.
The definition of independent workers covers people who work at
least 15 hours a week.
Steve King, a partner at Emergent, said the growth in independent
workers is being driven by companies that want to stay ahead of change, and can
bring in workers with the right skills. "In today's world, change is happening so quickly
that everyone is trying to figure out how to be more flexible and agile, cut
fixed costs and move to variable costs," said King. "Unfortunately, people are
viewed as a fixed cost."
King worked with MBO Partners to produce a recent study that estimated the entire independent
worker headcount in the U.S., for all occupations, at 17.7 million. They also
estimate that around one million of them are IT professionals.
A separate analysis by research firm Computer Economics finds a
similar trend. Over the last two years, there has been a spike in the use of
contract labor among large IT organizations -- firms with IT operational budgets
of more than $20 million, according to John Longwell, vice president of research
at Computer Economics.
This year, contract workers make up 15% of a typical large
organization's IT staff at the median. This is up from a median of just 6% in
2011, said Longwell. The last time there was a similar increase in contract
workers was in 1998, during the dot.com boom and the run-up to Y2K remediation
efforts. Computer Economics recently published a research brief on the topic.
"The difference now is that use of contract or temporary workers is
not being driven by a boom, but rather by a reluctance to hire permanent workers
as the economy improves," Longwell said.
Computer Economics expects large IT organizations to step up hiring
in 2014, which may cause the percentage of contract workers to decline back to a
more normal 10% level. But, Longwell cautioned, it's not clear whether that new
hiring will be involve full-time employees or even more contract labor.
"There are a lot of different variables that go into the decision to
use temporary, rather than permanent, employees, and one of them is the outlook
for sustained growth," said Longwell.
IT hiring has slowed after the past several months, according to
recent reports.
Jeff Wald, co-founder and COO of Work Market, believes that demand
for independent employees will only increase. That's based on Work Market's own
surveys.
King said the good news, particularly for people with skills, "is
there is a lot more opportunity to find part-time employment and set up your own
shop and work as a consultant and contractor than there has been in the past."
But what if you want to keep working full-time?
King said young workers, who may change jobs frequently, already
have back-up plans for independent work, but mid-career workers may not be as
prepared. He recommends having an action plan. That may include thinking about
how to earn a living as a solo worker, and developing networks outside the
office. A lot of people are already moonlighting on part-time job services to
"get a sense of what's going on," he said.
But there will also be full-time opportunities for younger workers
as baby boomers gradually leave the workforce.
In California, for instance, Ron Hughes, the chief deputy CIO of the
state's Department of Technology who recently spoke at a Gartner Data Center
conference, urged younger workers to consider working for state IT shops.
In Hughes agency of 750 employees, 53% are already eligible for
retirement, and in the mainframe group, a subset of the overall number, 73% are
eligible to retire.
"The opportunities are going to be phenomenal," said Hughes.
