Article by Jeff Clement, VP Sales and Operations, Soltech, Inc
Recent statistics released to the Technology Association of Georgia (TAG) from SkillPROOF for the month of May, 2008 shows that the category of job openings taking the largest year-over-year decline in the local Atlanta market is the category labeled “IT Architects/Consultants”. From May 2007 to May 2008, this category of jobs declined 60%. This same category declined 21.2% from April 2008 to May 2008.
Numbers like these have many hired gun consultants and contractors nervous about their viability as an external, staff augmentation resource in a down economy.
In recent history, many IT workers have been caught in a down size, right size, reduction-in-force exercise that have forced many people to shift their paradigm from that of “employee” to that of “contractor or consultant”. Additional studies have shown that as these new contractors move from engagement to engagement, their confidence has grown and they have become comfortable in this new role. In addition, each new assignment brings new experience and their marketability has improved along with their hourly rate.
Now that we actually find ourselves in a down economy, how has this impacted those independent contractors? From my perspective (based on contacts in the industry, peers and observation), many of the larger companies who had the budget and wherewithal to hire consultants are moving to a more conservative, less expensive path until the economy improves.
Not only are the small, independent contractors getting hit, many smaller companies are feeling the pinch as well. I continue to hear that some of the smaller IT service companies are scaling back, leaving the Atlanta market or going out of business altogether.
Along those lines, I recently had the pleasure of meeting a gentleman who has spent over six years as a contractor for a large, consumer products company. This gentlemen has an impressive resume that included international experience and technology leadership. He is now considering making less money by “settling down” into traditional employment where he can enjoy subsidized benefits and some assurance that a next assignment exists for a traditional employee.
Subsidized benefits can represent a significant cost savings. The rising cost of health insurance creates a burden for the independent contractor. Reducing the cost by spreading the risk across a larger group is something many people are taking a serious look at.
This is a much larger example of a growing trend which extends into all job categories. Of particular note, IT recruiters have been able to make a nice living as “contract recruiters” moving from company to company. In response to a recent job posting for an IT recruiter, the majority of responders were contract recruiters looking for a more “permanent” home and affordable benefits.
Somebody once said that everything old becomes new again and I think that is happening in today’s Atlanta IT industry. Nothing wrong with that.