As IT hiring slows, freelancers are getting more work

Your next job may be as a hired gun as more companies recruit outsiders to fill positions once held by full-time staffers

Scaling up and scaling down is much of what makes the cloud so attractive. Renting capacity when needed -- and not having to pay for it when it isn't needed -- is becoming the new norm. But a similar trend is starting to take hold in a much more personal way: the hiring and firing of people in IT.

As the IT jobs market slows after years of growth, many large companies are picking up the slack with hired guns: consultants, contractors, and others who do the work once covered by full-time employees, says David Foote, chief analyst at Foote Partners, which has tracked trends and salaries in IT employment since 1997. "The number of independent IT professionals [is now] at about 1 million and growing, and contract workers as a portion of the internal IT workforce at many medium to large size organizations has been rising, often between 10 percent and 25 percent," he wrote in a recent report.

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At some smaller companies, adds Foote, hired guns (he calls them a "contingent workforce") may comprise as much as half the workforce. "We call it people architecture; that is, applying architecture principles to people. You never buy more than you need."

The part-time tech economy grows
The shift to contingent workers has been noted by others as well. IT research firm Computer Economics recently reported that the use of contract labor in large IT organizations (companies with IT budgets of $20 million or more) has grown to 15 percent, the largest share since 1998. Jon Bischke, who heads Entelo, a San Francisco-based recruiting firm, says consultants now comprise between 10 and 20 percent of the workforce of some fast-growing companies in an area where tech unemployment is close to zero.

Although a consultant may command a higher hourly salary than a full-timer, there's no need to pay that contractor benefits, there's no paid time off, and there's no difficulty in letting him or her go when work slows. Workers in many other sectors of the American economy are already in that position. In a wide range of jobs, such as household help, journalists, graphics designers, and even lawyers and accountants, the positions are being filled by freelancers. Studies by the federal Bureau of Labor Statistics and the Government Accountability Office show there are more than 20 million of them. IT is joining the trend.

Meanwhile, there are enough red flags waving in the breeze to be fairly certain the IT job market is cooling. Depending on who is doing the counting and how they classify IT, an analysis of January's report by the Bureau of Labor Statistics showed job losses ranging from about 1,400 to more than 3,100. That's not a huge number, but the sector was adding thousands of jobs a month through much of 2013, so it's a scary shift.

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