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The Coming Tech Gig Economy (infoworld.com)

snydeq writes: The rise of contract and contingent work is shaking up the traditional IT career path, with the days of decades-long careers in corporate environments dwindling for many IT pros. "And it's not only nonstop cost cutting that has businesses favoring IT contractors they can bring on — or scale back — as necessary without paying benefits. Emerging platforms, in particular around the cloud, have many organizations shifting their staffing models toward project-based, contingent work in hopes of landing the key skills necessary for their businesses to stay competitive in a constantly evolving technical landscape. ... How should you adjust to this shifting employment landscape? Should you broaden your skills or specialize? Should you develop a plan to strike out on your own or double-down on the skills that will remain invaluable for retaining long-term, full-time employment?'

23 of 177 comments (clear)

  1. Dump them as fast as you can by Anonymous Coward · · Score: 5, Insightful

    Organizations willing to take on itinerant contractors instead of hiring employees will soon learn a painful, and very expensive lesson in the dollar value of organizational memory.

    1. Re:Dump them as fast as you can by Tablizer · · Score: 5, Insightful

      value of organizational memory.

      I agree. Most rotating-contractor-made systems I worked on were a fricken mess.

      It seems contracted work is best for easy-to-define "grunt work" (for lack of a better way to describe it). For example, data entry, simple back-end CRUD ui's that don't have to be pretty, researching an easy-to-reproduce bug, formatting documentation prettier, etc.

      Domain knowledge is under-valued in IT. My work is often far better after I learn the domain, often because I ask better questions or present better alternatives that simplify things rather than interpret initial instructions literally.

      It's true that some permanent IT staff are also screw-ups. But, the solution is either better management of them, or get more disciplined staff, NOT outsourcing.

    2. Re:Dump them as fast as you can by zlives · · Score: 2

      but cloud and all things are fixed... right

    3. Re:Dump them as fast as you can by cayenne8 · · Score: 5, Informative
      The days of a lifetime job at one company have been over for at least 3 decades really.

      Best advice...get your first jobs out of school. Work, network....make business contacts and friends, and hone your skills to become marketable.

      While doing this, incorporate yourself. This will prepare you for contract work when you are ready. Remember all those business contacts and all? Well, those will help lead you into contract jobs or even direct ones as you move from job to job.

      But if doing contracting...INCORPORATE yourself. Learn to budget and plan. You have to save money while making it, for the down times...and retirement.

      But for all that extra effort, there *IS* benefits. You are your own boss. You get to call the hours you work. And you can write off a shit ton of stuff perfectly legally...write those expenses off. And eventually, get a CPA to help guide you.

      There are many ways to do it, I prefer the S-Corp method.

      With this, yes there is more paperwork (CPA helps here, and their fees are reasonable and deductible)....but you can keep more of your hard earned money.

      It can work like this. Let's say for simplicity...you bill $100K a year.

      With the S-corp, you pay yourself a "reasonable" salary....the IRS is vague on this, but let's be reasonable and say you pay yourself a salary of say, $40K. Now, on that $40K, you pay out of that SS and medicare, employer and employee....and your state and fed taxes (if you state taxes you).

      The rest of the $60K...at EOY, falls through to your personal taxes (assuming single person business)...now, take all your deductions from that....and what's left, is only taxed for state and federal....you save the SS and medicare taxation this way.

      What's left is all yours.

      100% perfectly legal, and if you just keep records...and play by the rules, you can save enough money to keep things worth the effort.

      Also, don't forget, you have your own insurance. That's no biggie, especially if getting into this young. Get yourself a "high deductible" insurance policy, which today is I believe $1500 (I don't have my files handy right now for exact numbers)...with this, you can open a HSA (Health Savings Account) into which you can sock away $3500 pre-tax, which also decreases your taxable income. Out of the HSA, you pay your routine meds...Dr. visits, optical, dentist...etc.

      The nice thing about a HSA..is that it is NOT use or lose like a FSA (Flexible Savings Acct. offered with some W2 jobs)....with HSA, any leftovers can be rolled over year after year. You can even invest monies in an HSA..and eventually excess can become retirement $$ for you.

      So, yes, you have to be responsible.

      Yes, you have to manage your money.

      Yes, you have to learn your worth and learn to NEGOTIATE...so that you can cover your expenses, money needed for retirement and insurance, and vacation time off. But this isn't rocket science, you just need to learn to become an adult and take care of yourself and learn how to protect your interests.

      One last piece of advice....if you are an American citizen, try to get into Federal Contracting...you can do LONG multi-year contracts that offer much more stability. If you can make sure not to have a lot of skull bong moment pictures of yourself on social media while growing up, you can pretty readily get a clearance....and then, you are really SET for profitable, long term money making with at least as much stability as today's W2 worker.

      Yes, the days of steady employment and loyalty from a company have been LONG over...if you're gonna get treated like a contractor and not have any more stability than a contractor...you might as well get the BILL RATE as a contractor to make it all worth while.

      That and you can save more of your hard earned tax $$'s this way too.

      --
      Light travels faster than sound. This is why some people appear bright until you hear them speak.........
    4. Re: Dump them as fast as you can by LDAPMAN · · Score: 3, Insightful

      The "gig" economy is not about replacing in-house workers or saving money. Organizations are doing this to bring in specific skills and domain knowledge they could never hope to hire as a normal employee. I'm brought in as an addition to the team, not a replacement. I also usually provide training to the normal employees as well.

    5. Re: Dump them as fast as you can by happyslayer · · Score: 2

      I'm brought in as an addition to the team, not a replacement. I also usually provide training to the normal employees as well.

      This, precisely, has been my experience. Although TFS points out (properly, I think) that "cloudiness" is a big influence, it's actually going the other way--the local IT staff have enough on their hands without having to learn all the ins and outs of the latest shiny toy that management has acquired, but didn't realize needs a lot of work to make operable.

      --
      Never confuse movement with action. --Hemingway
    6. Re:Dump them as fast as you can by Shadow99_1 · · Score: 2

      All this is fine in a place where you can make enough to do this...

      I live in PA and work in IT (I have over 15 years in the field) and when I see say... a 6 month contract. They are paying 10-20k. Figuring you get 2 of those back to back to fir perfectly in a year your take home is 20-40k for a year. Unless you live in your parents basement living on that and then incorporating on top of that is going to be pretty insanely expensive. Certainly it is without benefits. Simple health care is going to run you ~$150-200/month on your own (unless you want to pay for nothing

      Heck, I just saw a 2 month contract for Pittsburgh, PA and Strongville, OH... For $4k.The requirements to get the job are awfully high (nearly a decade of experience with Websphere, Windows, and Linux administration). Not including travel costs between locations. Heck they don't even reimburse you for the costs of the interview unless you get the job and they came to me. But... For what they wanted and what they were paying, it wasn't interesting for me.

      In my experience in my state, contract work is for suckers because it's used by companies to undercut real employment. It's also used to get workers for much less than full time ones cost. 'Negotiate'? That doesn't happen. They tell you what they are paying and you can take it or leave it.

      Locally government contracting is almost all short term programming gigs for the State. As someone who is not a programmer by trade, I haven't spent much time looking at them. I'd need to move to get Federal contracts and with my state not even being able to pass a budget for the last 5 months... Well not a good time to be a State employee.

      --
      we are all invisible unless we choose otherwise
    7. Re:Dump them as fast as you can by Anonymous Coward · · Score: 2, Insightful

      The days of a lifetime job at one company have been over for at least 3 decades really.

      Wrong. It's just less likely at bigger commercial concerns for work requiring less brainpower. But if you show yourself as invaluable to the survival or steady growth of a small firm, well, your boss will be as keen to keep you on as they are keen on the survival of their business. Ditto in academia, or even many larger non-profits. And most people aren't even working for big boys.

      network....make business contacts and friends,

      This is a way to get all the wrong sorts of jobs, though. "What qualifies you to be here?" "My friends put in a good word." This is just the sort of place I don't want to be.

      and hone your skills to become marketable.

      Although much less necessary now the pace of technological change has slowed. You need to keep your buzzwords up to date, learning a new set of syntactic sugar every couple of years, but the skillset remains relatively unchanged. What I had to learn between 1995 and 2005 was incredible. Last ten years not so much... I'm mostly reusing virtual machine / rent-a-computer concepts I had to deal with in '80s.

      But if doing contracting...INCORPORATE yourself.

      I expect this works better in certain jurisdictions and fields, as some countries are really good at making sure you do NOT benefit from incorporation-as-tax-avoidance.

      You are your own boss. You get to call the hours you work.

      This is misleading. A contractor's bosses are his clients! Work hours depend respectively on the requirements of the client / employer in a contractor / employee relationship, and can be stringent or flexible in either case.

      Yes, you have to learn your worth and learn to NEGOTIATE..

      You don't "have to" any more than as a regular employee, and - even more for contracting than employment - it's about knowing what the job is worth to the person who wants it done. Except in cases of nepotism, you find the cheapest person who fits all your requirements.

      so that you can cover your expenses, money needed for retirement and insurance, and vacation time off. But this isn't rocket science, you just need to learn to become an adult and take care of yourself and learn how to protect your interests.

      This is weirdly patronising and passive-aggressive. Every adult has to "take care of yourself and learn how to protect your interests", and the extra expenses of incorporation are barely more complex than household budgeting. What was once a creative use of the limited liability company has become quite routine.

      One last piece of advice....if you are an American citizen, try to get into Federal Contracting... [...] That and you can save more of your hard earned tax $$'s this way too.

      Ah, the moneyshot: to maximise your profit, get your snout in the trough while minimising your personal tax burden! I'd rather see half the government contractors I've met collecting welfare/unemployment/whatever-your-area-calls-it government money than collecting fat salaries from public funds for doing nothing.

    8. Re:Dump them as fast as you can by davester666 · · Score: 4, Insightful

      All that stuff is valuable next quarter. We need to beat the numbers THIS QUARTER you idiot!

      Then I get my bonus, and I leave for another company.

      --
      Sleep your way to a whiter smile...date a dentist!
    9. Re:Dump them as fast as you can by dablow · · Score: 2

      Outsourcing your e-mail isn't quite the deal it looks like it is.
      In some scenarios it's cheaper and in some it is not. It all depends on your situation.

      For example: I managed IT in a school. M$ licenses cost almost nothing (due to school pricing). So right off the bat I get Exchange & Windows server for approx ~$260. I have a simple 2 server+ SAN setup with vmware & HA enabled on it. System is pretty redundant and solid. Never gone down except due to my own stupidity. If I outsource our e-mail, last I checked they wanted $15/month/account from Outlook.com I have about 150 accounts...so 15*150= $2250/month + tax for email. FOREVER.$27,000.00 /year. FOREVER. Say that was the non-special negotiated price. Ok 50% cheaper. It's still 13500/year FOREVER.

      + they can't get rid of me because somebody needs to manage the accounts (unlock passwords, new accounts, delete old accounts etc.), they can't get rid of the infrastructure (teachers & students need computers with network/internet = DHCP servers, firwalls, DNS servers blaa blaa), we can't easily cloud the other servers (it is doable but with a lot of effort and cost to redesigning how everything works here + mandatory increase in internet bandwidth offsets a lot of the savings), and guess what? Because you become hyperdependant of the internet always working, you still need to build in redundant systems (2 firewalls + 2 ISPs or else everything goes down when the internet goes down).

      BTW Servers+SAN+VMWARE+VEEAM+misc (like a NAS to dump backups) cost approx $40k, ammortized in 5 years. Just 5 years of cloud email = $67,500 (at the cheaper rate). My salary was not included since either way I would be here. And btw that $40k also runs a bunch of other stuff that otherwise I would need to pay to have hosted elsewhere.

      Cloud, is not always a solution.

    10. Re:Dump them as fast as you can by BarbaraHudson · · Score: 2
      The advice completely misses the hard stuff - like spending shoe leather banging on doors to business that most nerds are too afraid (shy) to do. If you can't get out there on your "down" days and see at least 20 different potential customers each day, you probably won't last. But of course, people are thinking "This is the internet - I'll just offer my services on my web site". You and every other too-afraid-of-talking-to-strangers geek. It says "know your worth" without getting into the practical details of how you can beat out the low-ball bidders (and there are lots of them).

      Contractors live in two states - either working, in which case they're not bringing in new customers, or not working, in which case they're out looking for new customers. Better that they read some of Weinberg's books..

      --
      "Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
  2. IRS and others need to crack down on 1099 abuse by Joe_Dragon · · Score: 3, Insightful

    IRS and others need to crack down on 1099 abuse.

    1099's are ok when used right but lot's of places want the control of a w2 worker but don't want the ACA, taxes, labor rights, worker comp, overtime, etc that comes with them.

  3. Re:basic health insurance for all is needed maybe by Archangel+Michael · · Score: 2

    Freedom works better than socialist feudal states.

    --
    Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
  4. The longer view by MountainLogic · · Score: 4, Insightful

    Please excuse someone from outside of IT as I work on embedded systems (who could possibly need more than 640 bytes of RAM), but at some point IT really needs to mature and stop making every application one off in-house prototypes. Some applications have stabilized and are expected to be delivered as COTS (Commercial Off The Shelf) products, for example word processors and spreadsheets. Far too many business products have to be (or needlessly are) customized to death. ERP, HR, accounting, etc. Seriously, does a HR program have to be more flexible than a spreadsheet? Should an ERP program require more expertise to setup than a workprocessor? Someday someone in charge is going to catch on that all of this flexibility and customization if far more expensive than any promised gain and just work with a cloud product out of the box. Sure there will always be a super user in every dept/company who is the goto person, but that person really should not be in the the IT department. Everyplace I've worked the most knowledgeable Excel folks are the MBAs, not dev engineers or IT. When this happens you can expect to see a quick death to many IT departments. At one time every factory had an electrical engineer to run an engine to make electricity. With very few exceptions, those practicing EE jobs are now at utilities, architects or electronics companies. It is not that folks working in IT departments may not be doing good work, the problem is that the same problem is being solved in a thousand different companies. At one time IT excellence was a competitive advantage, for example Fed Ex, but now it is a common commodity base utility line like water or power. Why can't it be a something bought as a commodity?

    1. Re:The longer view by Tablizer · · Score: 2

      The problem with standardization of biz practices is that marketers and MBA's are always dreaming up gimmicks to allegedly stay ahead of the competition, both for external sales and internal "management practices". A lot of it is probably just useless fads; but, if they want to computerize a fad, you have to supply what they want, or they take their biz elsewhere.

      Automating stupidity is job security, I guess.

  5. Yes but a trade union not a labour union by random+coward · · Score: 3, Interesting

    Strangely enough; unionization could actually facilitate this in a better way. If the trade union and not labour union model was used.

    In a trade union, you contact the union and request a number of qualified skilled workers for the job; they do the job on contract and leave. So if you were renovating a building you might contact the Electrician union and get 3 Master Electricians and 5 Journeymen to do a job. They'll come and do the wiring, and you pay their union rate and when the job is over they're employment ends. The union takes care of benefits. If Jack shows up and you hate him you fire him and get a different person from the union. The union polices the skill of their members, and provides benefits from their dues.

    So you would call the IT union and get your certified IT workers to complete the job and you pay the union rates. Of course, to square this analogy we might have to get licensed architects for the design to start with too. Maybe we take this further and the designs have to be signed of on by a PE and filed for reference too, so no more do you have confidential system architecture; for the public good needs to be regulated for safety. And then the system inspectors have to approve in test as well.

    The more I think about this the more I expect that there will be a trade union for these type jobs; it solves many issues; at least as many for the companies as for the workers.

  6. adjusting by Gravis+Zero · · Score: 3, Insightful

    have many organizations shifting their staffing models toward project-based, contingent work in hopes of landing the key skills necessary for their businesses to stay competitive in a constantly evolving technical landscape. ... How should you adjust to this shifting employment landscape?

    the "gig economy" actually isn't new. this happened with blue collar work and they got abused badly until they formed unions. why do you think this will end any differently?

    --
    Anons need not reply. Questions end with a question mark.
  7. How about fight back? by Berkyjay · · Score: 2

    Why just sit back and let these new Robber Barons screw the hell out of you just so they can improve their profit margin? How about refuse to work for anyone who doesn't offer you a full time job with benefits?

  8. Re:unionize by Fwipp · · Score: 2

    If you're afraid that what you write on Slashdot could jeopardize your job, then I advise you to quit.

    Generally if you're worried about getting fired from your job, that means that quitting (and thus no longer having your job) is not a very desirable option.

  9. Learn to live on half of your net by davidwr · · Score: 2

    Whether you contract or have a W2 job, learn to live on half of your net-pay-after-taxes. Yes, this means at least a decade or two of cheap housing, a cheap car, and hardly ever eating out or going to a movie.

    You'll need the savings to get you through periods of unemployment, pay for education if you need to do some major re-training because your skills are too "niche" to get you past your current job, and pay for an involuntary early retirement or chronic under-employment if you are unfortunate enough to become unemployed after hitting 50.

    At least do this until you've saved up enough that it's obvious you don't have to scrimp and save any more.

    --
    Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
  10. Bingo!! by aXis100 · · Score: 3, Funny

    I call buzzword bingo!!!

    Doing this non-anonymously because karma hardly seems worth it if this is the standard of writing these days.

  11. Re:unionize by OhPlz · · Score: 3, Insightful

    Long term disability coverage is meant to protect you in situations like that. Every employer I've ever worked for either provided it outright, or at least offered it. You can also get such a plan yourself, do it when you're young and it won't cost much.

    Unions are great if you're dead weight and want to be protected. Those with marketable skills generally don't have need of them, nor want of them. Do you want to pay dues to an org that's going to fight to keep the dead weight around? I don't.

  12. Don't like stability? You will in a few years. by ErichTheRed · · Score: 4, Interesting

    We're not at the point yet where every single tech employer is a sweatshop that operates a revolving door of contractors instead of full time staff. I would say we're heading that way, simply because IT services companies advertise their outsourcing/contracting services to the executives as a complete solution to their problems. No matter how much development is Agile and divorced from the actual business process, or how commoditized the systems everything runs on are, there will always be some institutional knowledge that gets lost. I've worked for companies that have gone down the outsourcing road, and some are actually coming back to in-house IT for some aspects of their operations. I think the pendulum will come back to some kind of middle ground soon. Not everything will be an in house function, but you might not have to string 5 or 6 short contracts together into a full year of employment.

    Not every employer subscribes to the "contract everything" theory. Most large public ones have no choice because they're under so much pressure to reduce cost (at least on paper) by any means necessary. But, most businesses that value IT even slightly know that losing an employee can be difficult and they try to keep them. My employer, at least for now, has employed people for very long stretches and prefers people who will stick around and contribute for the long haul. The problem is that when you start dealing with rotating contractors, no matter how well things are documented, things get missed. It's the difference between writing down a sterile operations procedure for some offshore person who doesn't know anything about your company, and knowing how that process affects operations locally.

    I do think that if we do allow employers to divorce themselves of their employee responsibilities, something needs to fill the void to provide stability. A professional guild is the best fit in my mind. There's just no other way - IT and programming in particular is a creative skill set. You have a wide range of personalities and negotiation abilities. I see several serial contractors responding to this thread telling people to put their big boy pants on and negotiate their bill rates...I think they fail to realize that most people don't want to do that, nor have the skill, and would rather do the work they're good at. I think that someone who's 24 now, with zero responsibility and bouncing between 3 month contracts that they feel are effortless to obtain, will feel very different when they turn 40, have kids, and need to wear the big boy pants both at home and at work. Suddenly stable employment starts looking like a good option.