IT Careers: How to Be a Successful Contractor in a Recession

IT workers facing potential layoffs should consider preparing for life as a free agent now in hopes of finding work in the future.

In these uncertain times, who isn't worried about job security? There are ominous signs aplenty: tech projects put on the chopping block, layoffs looming, and spotty full-time hiring opportunities on job boards. It's good to have a backup plan in case you're let go, and one plan is to prepare yourself to be a free agent.

A free agent has many names, among them "freelancer," "contractor," "temp," "consultant," and "contingency worker." Basically, all mean the same thing: working without the benefits or obligations of a full-time staffer.

[Read our special report on what IT jobs are most at risk due to the financial meltdown. Discover the 30 IT skills every tech should have.]


9 Tips for Taking Control of Your IT Career in the Face of Layoffs

Why It's a Good Idea to Change Jobs in a Recession

Questions About Becoming an IT Consultant

8 Tips for IT Professionals Interested in Pursuing Careers as IT Consultants

Of course, free agents aren't in any better position than full-time employees during a downturn. Research firm Staffing Industry Analysts projects zero growth in IT staffing this year and a contraction of 5 percent in 2009. In fact, given that it's much less traumatic to cut contractors than to lay off regular employees, free agents will be among the first to be fired, says Barry Asin, chief analyst at Staffing Industry Analysts. Generally speaking, companies don't replace full-time employees with contingent ones, he adds.

Until the economy recovers, that is. On the upswing, free agents will be in more demand than their full-time counterparts, as companies typically use contractors to hedge their bets against a sudden market upswing going sour. This means IT workers facing potential layoffs should consider preparing for life as a free agent now in hopes of finding work in the future.

"The reason to have skilled temps is to protect a company against uncertainty, because typically temps—at least in professional skills—are more expensive on an hourly basis than traditional employees," Asin says. "When things start to improve, temp workers will be the first hired."

Making the Case for Free Agency

Job market improvement, at least for technical work, may come sooner than you think. In fact, staffing firm Robert Half Technology (RHT) doesn't share Staffing Industry Analysts' gloomy job market outlook. In an RHT survey released last month of 1,400 CIOs, 11 percent said they expect to add staff in the fourth quarter of this year, whereas only 3 percent forecast personnel reductions.

In a shaky economic climate, free agents are well positioned to take some of those jobs. "We're actually seeing an increase in contract orders over some of our direct-placement orders," says John Estes, vice president at RHT, adding that his company's fourth quarter is off to a good start. "Companies are saying, 'We had forecasted to bring in full-time employees to help us get some of this work done but can't really afford the overhead and head count right now, so we're going to go with contractors.'"

One free agent techie with expertise in everything from Linux to Windows, networking to coding, claims to be as "busy as I've ever been." This free agent, speaking on condition of anonymity, notes that disaster recovery contract work has been "falling away a bit, but virtualization is huge."

What's Hot, What's Not, in the Contract Market

In a Forrester Research study released earlier this year, the hottest IT jobs—contingent or otherwise—included desktop virtualization expert, account manager, mobile operations and devices expert, service manager, business process analyst, and storage director. Other recession-proof IT jobs are in areas such as VoIP, software design, networking and systems administration, data warehousing, Web 2.0 technologies, and database administration.

"There's continued strong demand in the bread-and-butter placements like basic desktop and infrastructure support, database professionals, and application developers," says RHT's Estes. "Any projects that have to do with revenue generation, expense control, and customer experience will continue to get funded."

So what's not hot in tech? Unproven trends such as cloud computing, as well as projects with a high initial investment or long ROI, such as large-scale SANs or SOA, will likely be put on the back burner as companies retool their budgets. Free agents seeking to sell upscale services in these areas will have a tough time. "We're also not seeing much demand for strategic and IT managerial positions," says Estes. "Skills that haven't gone away are the hands-on positions."

Peter Wayner, a free-agent software developer, author, and InfoWorld Test Center contributor, has seen demand for his services fall a bit but not markedly so. "Companies are always changing their perception of what needs to be kept in-house and what should be outsourced," he says. "You can usually guide them in one direction or another if you're able to guarantee stable services."

The Free-Agent Mind-Set

Having the right technical skills, though, is the easy part of being a free agent.

Becoming an independent contractor requires an entrepreneurial drive and the willingness to work unpaid hours as your own sales and marketing department. Training on new technologies is on your dime. It also means accepting the fact that gigs come and go at a moment's notice—a feast-or-famine existence. (To reduce uncertainty, free agents can always sign up with a staffing firm like RHT to help land contracts, but of course, the firm gets a cut of the action.)

The accounting side of independent contracting is equally challenging. Even if you get a tax accountant, you need to be religious about filing quarterly estimated taxes and properly recording income and expenses in the right accounting categories. Do-it-yourselfers should bone up on the numerous tax shelters available for small-business owners and self-employed contractors; the Wall Street Journal offered such financial advice for Joe the Plumber following the last presidential debate.

For aspiring free agents, our anonymous contractor has some bottom-line advice: "Have six months 'salary' in the bank and don't overwork yourself—which is easy to do."

Related articles

For a Promising IT Career, Go East, Young Techie

The U.S. and Europe are slowing down, but hot tech jobs beckon in China, India, and Eastern Europe.

The 30 Skills Every IT Person Should Have

An IT manager's guide on how to be better at what you do, no matter how experienced you are.

20 Ways to Get Promoted in the Tech Industry

If you agree that there's no such thing as an IT project, you may already be on your way up the ladder.

Recession-Proof IT Jobs

Believe it or not, some tech jobs are still in demand. Find out which ones employers need to fill.

Will Your IT Job Survive the Financial Meltdown?

After the consolidation wave, financial IT jobs could be cut. And cuts in discretionary projects across the board threaten many tech workers.

Why are women exiting IT careers?

Women IT leaders discuss the ongoing problem and offer insights on how companies can ensure women embrace technology as a life-long career.

This story, "IT Careers: How to Be a Successful Contractor in a Recession" was originally published by InfoWorld.

Copyright © 2008 IDG Communications, Inc.

7 secrets of successful remote IT teams