Can Full-Time Tech Workers Survive the Gig Economy? (dice.com)

Nerval's Lobster writes: By some measures, more than 40 percent of U.S. workers will be independent in 2020. Today, that number stands at 34 percent, according to the Freelancer's Union. By all accounts, the trend seems widespread enough to indicate that tech pros should prepare themselves for the dynamics of a world that depends more on contingent work. The question isn't whether the tech world will see an increasing prevalence of 'gigs,' rather than full-time positions; it's whether those in full-time positions can easily keep their jobs when there's pressure to farm it out cheaply and easily to freelancers. Or will the need for people who can see projects through the long term prevent the 'gig economy' from radically changing the tech industry?

Comments

Look at the bean counters for your answer

[BarbaraHudson]

Permanent staff are seen as a burden. They will look for any way to reduce that, so long as their (or their bosses) jobs are not the ones affected.

Re:Look at the bean counters for your answer

[volcan0]

I think you make a valid point. Super easy to get around: Start outsourcing bean counter's job as well. I am sure we will see the trend reverse itself right away.

Re:Look at the bean counters for your answer

[rubycodez]

a big correction is coming, outsourcing mission critical systems can end very badly, especially if it involves countries with huge black markets for stolen data with no real legal venue to pursue. yeah India is prime example of what I'm talking about, and if you farm out to any former soviet country their mafias will make a killing on your data too (as aside sometimes that's not a pun)

Re:Look at the bean counters for your answer

[Anonymous Coward]

The beancounter is the one doing the outsourcing though. You really think that they're going to sack themselves? More likely they'll give themselves a nice big bonus for all the "efficiencies" they've achieved, then retire early before the company tanks as a result of all the people who actually make/understand the product vanishing.

Re:Look at the bean counters for your answer

[Anonymous Coward]

Get rid of all employees. That will save a lot of money, brilliant fucking idea, wait... who is going to buy all this shit when nobody has a job?
Ahh, don't matter print some more fucking petro-dollars.

Re:Look at the bean counters for your answer

[Zero__Kelvin]

"A big correction is coming ..."

FTFY (but, really, it wasn't a very big correction after all.) Here is some additional helpful information.

Re:Look at the bean counters for your answer

[silas_moeckel]

Your forgetting a few rules of consulting. Rule one never look like one of them dress above or below them. Rule two your a business gig is by definition short term work charge in accordance with that you should be billing several times what their internal people make. Rule three it's the contract stupid as the vendor you should be the one putting out the initial terms and negotiating from there.

Re:Look at the bean counters for your answer

[Darinbob]

It's not just about security though. Outsourcing does not give you workers who care about your company. Their transients, a few bugs won't bother them. A security hole isn't worth patching. Billable hours is the only thing that will matter. Your company is trying to make something new and unique and the guy at the other end of the phone says "yes, sure, we can do that, we're the expert in that!" and then 24 months later they've vanished and you've got nothing to show for it.

Then the workers will want to start standardizing so that they can migrate their jobs more easily, requesting that certificates take the place of interviews and evaluations.

Re:Look at the bean counters for your answer

[khasim]

I have to explain that to people all the time.

To an employee, you are a paycheck / insurance / vacation-time / etc. If they fuck up they have to go through the interview process to replace those items. And it is in their best interest to do the job correctly so they don't have to deal with the problems or the hassle of interviewing.

To a contractor, you are billable hours. If they fuck up they have to find replacement billable hours. That's it. They don't care whether it works right because they can charge to fix it. Again. And again. If they find a customer who pays better, you'll be on your own. Unless you want to cough up more money.

Re:Look at the bean counters for your answer

[Anonymous Coward]

Outsourcing does not give you workers who care about your company.

Neither did perma-temping in the pre-outsource days. But that didn't stop anybody.

These days virtually no one from the janitor to the CEO expects to be at the same company long enough to care about the company itself.

Re:Look at the bean counters for your answer

[BarbaraHudson]

First they came for the regular jobs.
But that's okay, there's always the crappy gig economy.

Then they cam for the gig jobs
But there's also the robot economy.

Oops - humans can't compete on cost with a robot.

Re:Look at the bean counters for your answer

[whoever57]

You forgot the other rule:Have a spouse in a full-time gig with medical benefits.

Once those contractors hit 50+ years old, if they have families and have to buy their own insurance, those consulting gigs are going to look like poor deals.

Re:Look at the bean counters for your answer

[mikael]

Usually they will only consider someone who has worked on a similar project and can provide references.

Re:Look at the bean counters for your answer

[Slashdot Junky]

...and you are doing what [as a one worker vendor] for $125 per hour?

Re:Look at the bean counters for your answer

[silas_moeckel]

See rule two that's fully loaded cost not pay rate, so their full benefits package + salary + overhead + business profit + overhead + insurance etc etc. As a general rule that's at least 3x salary. Insurance costs are significant but generally covered by the first wednesday morning of the month.

Re:Look at the bean counters for your answer

[0xdeaddead]

yep thanks to wallstreet and bean counters. Oddly enough they are powered by retirement funds, how is that for a bad sense of irony?

Re:Look at the bean counters for your answer

[Wycliffe]

These days virtually no one from the janitor to the CEO expects to be at the same company long enough to care about the company itself.

At the company I work for, we have over 20 employees. We hire a couple new employees every year and very few have every left. Most have now been with us for 10-20 years and will most likely stay with us until they retire. Very few have worked for us for less than 5 years and the few that have left have generally left for things unrelated to the job like deciding to be a stay at home parent or moving their family out of state.

Re:Look at the bean counters for your answer

[ranton]

After spending time as both a full time employee (FTE) and consultant, I find the dynamic can quite often be the opposite of what you describe.

To an employee, you are a paycheck / insurance / vacation-time /etc. If they do a great job they will get the same paycheck as if they do a mediocre job. Maybe they will get an extra 1% raise. As long as they don't royally fuck up, they will not get fired. As Peter Gibbons put it, an employee relationship will "only make someone work just hard enough not to get fired."

To a contractor, you are a gold mine. They can make enough in 4-5 months to match what an FTE gets in a year, even counting benefits. And their ability to get more of these gigs in the future is mostly dependent on making each client happy. If they do a great job, instead of a 1% raise they get another 1000 billable hours at $225 each. This is quite the motivation to do a great job.

Both your scenario and my scenario happen. Finding a great employee and a great consultant are both rare and incredibly valuable.

Re:Look at the bean counters for your answer

[dbIII]

A few years before this site started my time was being charged out to clients at $100/hr (and I was being paid $10/hr - bastards).
Many tasks that don't take a lot of time to complete are billed out at high hourly rates.

Re:Look at the bean counters for your answer

[whoever57]

Insurance costs are significant but generally covered by the first wednesday morning of the month.

You are not over 50 with a family to provide for, are you? Either that, or you are earning ~$4000 per day.

Re:Look at the bean counters for your answer

[Maxo-Texas]

And when you sell the company to cash out, all of those employees will be screwed heavily about 90% of the time.

In many cases, the customer list will be taken, the employees will be dumped, the physical and software capital will be ash-canned.

You can never depend on a company to take care of you unless is it in writing.

For most employees, if they stay at a company over 10 years, they are screwed if the job ever ends.

Re:Look at the bean counters for your answer

[jandersen]

Well said. Those who preach privatisation as the best way to bring down costs "because private companies are so much better at being efficient", should think about this. I think it's common sense - it certainly stands out clearly in the UK, IMO.

The NHS is the most current example, I suppose - costs are spiralling out of control, mostly for two reasons: having to hire agency staff (ie. outsourcing to the private sector) and not being able to send patients home after treatment, because the councils have no resources ready to take care of them - because they have also been outsourced to the private sector. Even the government - the all Conservative government, the darlings of big business and the priesthood of small government - are admitting that this is the way it is.

Outsourcing is mostly a bad idea, because you replace a workforce that you have yourself vetted, and who have spent years getting to know your products and your company culture intimately, with staff you don't know, who really don't care about your company and your product and who are somewhere far away from where you can reach them and hold them to account. Only idiots would consider doing this sort of thing; but therein lies the problem, of course.

Re:Look at the bean counters for your answer

[Slashdot Junky]

My company does bill me out at something like $149/hr as for out-of-scope work. This rate is meant to cover the costs of the back-end people and processes that supposedly support my role. There are standard rates that apply to other resources. I bet never more than 1/5 of the billed rate is being paid entirely to the one person doing the work requested by the customer.

I do understand that contractors are paid high hourly rates. I suppose much of this is meant to cover the risk of down-time and that customers must pay for this to avoid the cost of having a regular employee. Some of the rates are also to cover the contractor's travel by car costs and other incidentals.

Re:Look at the bean counters for your answer

[kilfarsnar]

I have to explain that to people all the time.

To an employee, you are a paycheck / insurance / vacation-time / etc. If they fuck up they have to go through the interview process to replace those items. And it is in their best interest to do the job correctly so they don't have to deal with the problems or the hassle of interviewing.

To a contractor, you are billable hours. If they fuck up they have to find replacement billable hours. That's it. They don't care whether it works right because they can charge to fix it. Again. And again. If they find a customer who pays better, you'll be on your own. Unless you want to cough up more money.

Ah, so corporations are gong to see what it's like to work for a corporation.

Re: Look at the bean counters for your answer

[Zaowulf]

I wonder if the construction industry has as much focus on buzz words like "innovative" and "dynamic" and such. They must adhere to standards that say do x then y and get result z. Whereas a lot of tech is about finding solutions and coming up with new and better ways to do things. If tech starts just following a rule book things will stagnate and the US will quickly fall behind the rest the world. This applies not just to the specialists or subject matter experts but to the generalists and peons as well. Everyone right on down to the help desk is responsible for finding solutions to the problems they're presented with.

Re:Look at the bean counters for your answer

[kilfarsnar]

Don't forget the early cancellation clause! I have a boiler plate one that includes paying out the remainder of the contract plus a 50% penalty. If they cancel the contract before the 6 or 12 months is up. I've used it twice. In both cases new management came in and decided to outsource to India. First step was to get rid of all the contractors. I smiled all the way to the bank!

If your going to contract, at lease be smart about it and use every advantage you can get!

What happens when they balk at paying and you have to sue to get your money?

Re:Look at the bean counters for your answer

[tehcyder]

Outsourcing does not give you workers who care about your company.

Employing people does not give you workers who care about your company, except in tedious business-obsessed countries like the US where everyone thinks they'll be a millionaire next year, like humourless versions of Del Boy Trotter.

Re: Look at the bean counters for your answer

[BarbaraHudson]

hoardes of chinese workets proved the dominance of brain over chips. dont believe communist propaganda. thanks.

Those Chinese workers are now being displaced by robots.

Re:Look at the bean counters for your answer

[BarbaraHudson]

I disagree. If you have skilled labor in house, keep it. Outsourcing will hurt moral and the talent will leave. leaving talent will always hurt a company.

Unfortunately, the bean counters and the CEOs see cutting costs for a quick bump in profits is worth an increase in THEIR pay today. When it doesn't work, they CYA by shifting the blame to the outsourcing company, rather than admit it was their mistake in the first place.

Re:Look at the bean counters for your answer

[Darinbob]

No, we may not necessarily care about the companies per se. But we do care about our coworkers, we may care about the customers, and we usually care about quality of the products we make. Even at the base pragmatic level where the inner voice says "don't screw this up because you'll have to keep maintaining it for a few years." Of course some workers are an exception to this, but in general I tend to see that actual employees will spend more effort making sure things are done right.

Re:Look at the bean counters for your answer

[kmoser]

It's not just about security though. Outsourcing does not give you workers who care about your company. Their transients, a few bugs won't bother them. A security hole isn't worth patching. Billable hours is the only thing that will matter.

Wrong. I'm a freelancer, and I care tremendously about my clients. Any bugs in my code reflect poorly on me. Hell, bugs in any software originally written by somebody else reflect poorly on me, since I am now somewhat responsible for maintaining that code. I am always conscious about providing my clients value for their money (i.e. per billable hour). If they decide they are not getting good value, they can drop me faster than they can drop a full-time employee.

Re:Look at the bean counters for your answer

[LessThanObvious]

It doesn't make it any less short sighted. It takes months at a minimum for new staff to come up to speed and work well in a new environment. Short term staff have no reason to care if the company they work for even continues to exist beyond the end of their contract. They surely have no incentive to make sacrifices and difficult choices out of concern for the long term health of their employer.

Re:Look at the bean counters for your answer

[BarbaraHudson]

Of course it's short-sighted. But do you think the bean counters and their bosses care more about long term prospects than they do about short term profits that juice their stock options into the black?

Re: Look at the bean counters for your answer

[firbolgar]

The key difference is that in your industry, you have knowledgeable buyers who can effective price quality. In many other fields, especially it and software development, that is very much *not* the case. Subsequently, a large segment of the market competes primarily on the aspects that buyers understand - price. Without an offsetting understanding of quality, and therfore value - you get a race to the bottom.

Re: Look at the bean counters for your answer

[cthulhu11]

I wish this were hyperbolic but sadly it is not.

Re: Look at the bean counters for your answer

[cthulhu11]

$225/hr seems awfully high. I've seen a professional services contract from a company you know be "only" $160/hr gross and our regular contractors are much less.

Re:Look at the bean counters for your answer

[LessThanObvious]

No, I expect them to make every effort to destroy the economy for the benefit of next quarter's earnings.

Re: Look at the bean counters for your answer

[cthulhu11]

In my last job search, having been somewhere for N years was a distinct liability. Why do you want to leave now, we're concerned you can't adapt etc.

Re:Look at the bean counters for your answer

[dbIII]

I bet never more than 1/5 of the billed rate is being paid entirely to the one person doing the work requested by the customer.

There are a lot of one man bands out there.

Re:Look at the bean counters for your answer

[rubycodez]

the syntactic uses of cases is a fairly modern practice, for most of history it was more a stylistic choice. hence, i merely choose to at times ignore trendy fads.

Re: Look at the bean counters for your answer

[rubycodez]

Actually, no, politicians and "evil governments" aren't smart enough to make building codes. Instead, a non-profit organization called the ICC makes building standards that states in the USA and also many countries adopt

Re: Look at the bean counters for your answer

[rubycodez]

Engineers make those rule books, politicians can't. see my other comment

GIG economy is a misnomer

[jofas]

We all are freelancers to a degree: we bid on recurring contracts for our employment. There will always be a cohort of workers who want nothing to do with managing the ins and outs of "working for oneself".

No.

[Anonymous Coward]

Btw, does Mr. Betteridge work for Dice? Certainly looks like he won't be out of a job anytime soon!

Radically changing the tech industry?

[AHuxley]

The days of English and a good US science related degree are been replaced by random private sector staff with skills from Canada, Australia, New Zealand, the UK, Ireland.... parts of the EU... Asia, Africa, South America..
If only something could be used as leverage that other nationals can never out study or accept lower conditions or pay for?
Welcome to the exciting world of the security clearance and join the growing government and mil contractor ranks.
Great pay, a simple private sector interview, some digital paperwork and your on your way to the world of secure no bid contracts.

Re:Radically changing the tech industry?

[AHuxley]

AC Re"Other than that, yea, the digital paperwork is trivial."
and the hi tech economy stored the gov digital paperwork in an unencrypted, readable, network facing database :)

Yeah...

[koan]

%40 I don't think so...

I guess I've read too many political articles and everything now smells like an ad, a conspiracy or outright propaganda.

"Carolyn Ockels: Carolyn is the Managing Partner at Emergent Research. Carolyn's current research and consulting is focused on economic decentralization"

Focused...

Re:Yeah...

[kilfarsnar]

%40 I don't think so...

I guess I've read too many political articles and everything now smells like an ad, a conspiracy or outright propaganda.

LOL, that's because most of it is!

Re:Yeah...

[koan]

I agree.

Re:Gigs are for cows.

[fahrbot-bot]

You are all cows. Cows say moo. MOOOO! MOOOO! Moo cows MOOOO! Moo say the cows. YOU UBERIZED COWS!!

Sh-udder to think ...

This just in!

[Anonymous Coward]

The Department of Made Up Statistics has been busy this year with a 107% increase in productivity.

Empty Shells

[bigtreeman]

Companies are just shells containing people.
Without people they are just empty shells.
Greed will destroy society, sooner than we think.

If the town was burning

[Squiddie]

These bozos wouldn't stop to wonder if this was the new normal. This is as sickening as financial analysts marveling at the possibility that the US as a nation of renters rather than homeowners could be the "new normal."

Dice "insights"

[grimmjeeper]

The article seemed to be far fetched. It all made sense when I looked up and saw that it's just another idiotic dice "insights" spam.

Institutional Knowledge

[The Raven]

On a site that frequently ridicules the short-sighted behavior of eliminating experienced employees to bring in fresh (cheap) college graduates, it seems out of place to have a positive outlook on pervasive outsourcing.

If everyone is a contract worker doing works-for-hire, then nobody has extensive institutional knowledge. You are constantly explaining and re-explaining how your business works, and bugs are repeatedly entering codebases because the developer hasn't spent years understanding the business and its workflows. It doesn't matter how well documented your business is, developers will make mistakes when they are unfamiliar with your processes. When they can't look at a workflow or data structure and go 'that's not right' because they have spent years at the company learning how things work.

Experience has value; not just experience coding, but experience with the company understanding how it works. Systems are rarely generic... they are embedded directly into the business logic unique to each company, and the less you need to learn and relearn the requirements of every system the more productive you can be.

Re:Institutional Knowledge

[Tablizer]

You are constantly explaining and re-explaining how your business works, and bugs are repeatedly entering codebases because the developer hasn't spent years understanding the business and its workflows.

Based on experience I generally agree. Domain knowledge is very useful and seems undervalued by the industry.

However, perhaps the changing economy will weed out companies with convoluted work processes, favoring those that keep their business rules, data, and work-flows clean and logical.

It could push co's toward pre-packaged infrastructure systems such as ERP suites and off-the-shelf HR software. That way one can hire an expert on the given infrastructure product and they won't walk in clueless to your operations.

Things are not changing for just workers. If you want the advantages of standardized plugs, you have to also have standardized ports.

Re:Institutional Knowledge

[Greyfox]

I've been pondering that subject lately. If what you say is true, then shouldn't the company with the experienced employees and the institutional knowledge have a competitive advantage in their markets? I would have thought that advantage would have manifested fairly early as the quality of the shoddy competitors declines, but I haven't seen such a trend. I'd also expect the advantage to widen as the companies composed of nothing but temps loses institutional knowledge over time. Again, not seeing it.

Continuing on with my hypothesis, shouldn't the experienced employees be able to easily form a new company and drive the outsourcing ones out of the industry? I'm starting to see a few hints of that through anecdotal evidence, but not enough to draw conclusions yet.

Re:Institutional Knowledge

[Zero__Kelvin]

"Experience has value; not just experience coding, but experience with the company understanding how it works. Systems are rarely generic... they are embedded directly into the business logic unique to each company, and the less you need to learn and relearn the requirements of every system the more productive you can be."

Everything you wrote is spot on. I recently witnessed this very thing happen. A company I know of was outsourcing their development to an eastern block company and they just couldn't do it. It should have been obvious, as the system they have is literally infested with custom business logic, and that business logic is by no means standard, typical, or intuitive. In this case the intent was to develop some in-house software further by outsourcing to people with no understanding of the company, and they thought it would work, because Agile! Seriously! It is sad that such a large section of today's software development community seem to lack an appreciation for having a forest, tree, and root perspective on the product(s) and company, and actually thinks Agile is a viable Engineering methodology. It's pitiful.

Re:Institutional Knowledge

[Tablizer]

True, but the "Darwinism" of the market place will filter out the biggest dummies. I'm generally talking about a trend, not a revolution. Companies and managers that find a way to leverage fungible staff by having relatively clean work processes will expand and/or survive recessions better than those run by pure PHB's.

Re:Institutional Knowledge

[Kjella]

If everyone is a contract worker doing works-for-hire, then nobody has extensive institutional knowledge. You are constantly explaining and re-explaining how your business works, and bugs are repeatedly entering codebases because the developer hasn't spent years understanding the business and its workflows. It doesn't matter how well documented your business is, developers will make mistakes when they are unfamiliar with your processes. When they can't look at a workflow or data structure and go 'that's not right' because they have spent years at the company learning how things work.

The question is in what time frame the difference becomes apparent. If you have a sane system built up over time with institutional knowledge then for a time the odd fix here and there in the wrong place in the wrong way won't bring the system down. Sure you're building technical debt but the interest is far less than the principal in the beginning. It's only as you accumulate debt and people make terrible fixes on top of bad fixes because nothing makes sense the system becomes what is professional known as a clusterf*ck and the interest burden is killing you. But who cares?

The stockholders are an impatient bunch who want to see quarter-to-quarter results. Management is often on the same page, motivated by performance metrics and quarterly bonuses. And if they're just looking to grind out work from the employees until they jump ship for something better, you're not really motivated to work for long term benefits either. And contractors are obviously just doing business for as long as you're willing to pay and then move on to someone else. Somebody must care about the long term future of the company and stop the destructive elements that'll screw it for short term gain. Otherwise simple individual rationality will ruin it because people do what's best for them, not the company.

Re:Institutional Knowledge

[Bill Dog]

If you have managers who were taught in MBA school that you don't need to know anything about widgets to run a widget-making business, they're gonna believe that similarly it isn't required that the programmers know the business to program for it.

Re:Institutional Knowledge

[Anonymous Coward]

It is sad that such a large section of today's software development community seem to lack an appreciation for having a forest, tree, and root perspective on the product(s) and company, and actually thinks Agile is a viable Engineering methodology. It's pitiful.

I think it's important to emphasize that almost without exception it's the management, and not the engineers, who fail to understand this. It should be simple, but apparently the MBA brain has great difficulty wrapping itself around it. Personally, I think that business schools, which promote the idea that any business can be understood according to simple "universal principles" (aka the 10 minute manager) without recourse to critical thinking or real world experience, are a big part of the problem, but I digress. With regard to outsourcing, I like to put it to MBAs like this: If the core of your business (aka the "secret sauce") can be outsourced then you don't really have a business that's special or even worth doing. At that point you're just a price taker in competition with other me-too firms for the lowest bid and that's not a business you want to be in. Instead, you want to be in the business of selling a unique and high value product or service, one which cannot be easily imitated or substituted, and doing it better than anyone else. If such a business could be outsourced then everyone would be doing it and it would no longer be unique, special or profitable.

Re:Institutional Knowledge

[Maxo-Texas]

The company that I was very fortunate to retire from is now in year 6 of a 3 year SAP project. People there tell me the schedule has now been officially adjusted from a 3 year project to a 20 year project to be completed in 2030.

Infosys told them it had SAP expertise and then failed to deliver. The company even had to hire back some of the people it laid off at higher salary.

Dumb dumb dumb.

Re:Institutional Knowledge

[sociocapitalist]

On a site that frequently ridicules the short-sighted behavior of eliminating experienced employees to bring in fresh (cheap) college graduates, it seems out of place to have a positive outlook on pervasive outsourcing.

If everyone is a contract worker doing works-for-hire, then nobody has extensive institutional knowledge. You are constantly explaining and re-explaining how your business works, and bugs are repeatedly entering codebases because the developer hasn't spent years understanding the business and its workflows. It doesn't matter how well documented your business is, developers will make mistakes when they are unfamiliar with your processes. When they can't look at a workflow or data structure and go 'that's not right' because they have spent years at the company learning how things work.

Experience has value; not just experience coding, but experience with the company understanding how it works. Systems are rarely generic... they are embedded directly into the business logic unique to each company, and the less you need to learn and relearn the requirements of every system the more productive you can be.

You're making a few assumptions.

1. That contractors should be classed the same as outsourcing jobs overseas and H1B visa holders
2. That contractors don't make up a significant portion of the people on this site
3. That contractors don't know your business - which is no doubt true to some degree but contractors can bring other benefits to the table - experience and vision of how it's being done elsewhere that could be of benefit to the company

Having been screwed over every time I accepted a perm job I have no desire to be an employee for anyone else ever again.

I have control over my health benefits.
I have control over which contracts I take and which I don't.
I have control over my own training schedule.
I have control over my own vacation schedule (which tends to be in between contracts but I can control the length of time I take).

If I am of benefit to the company, they'll keep me on.
If they treat me well, I will stay on.

Frankly I think that people who lock themselves in to being employees for companies that don't generally give a shit about them are giving themselves the short end of the stick.

Re:Institutional Knowledge

[avandesande]

No way- things like healthcare are driven by government regulation, so you are going to end up with private sector business processes that are a convoluted mess.

Re:Institutional Knowledge

[Tablizer]

But all healthcare firms in the area are under the same regulations, and to some extent nationally. The regulation knowledge is NOT firm-specific.

Re:Institutional Knowledge

[Zero__Kelvin]

To be clear ans simple, Agile is not an Engineering process, and can never work as such. It can be a useful tool for the sole purpose of coordinating programming, though I don't recommend it. People who think they can design a project with Agile as the (de facto, typically) Engineering process are certainly fated to disaster.

it will be like those subprime loans

[Anonymous Coward]

It will be like those subprime loans that caused the banking crisis. Work will be contracted out to other companies which will cut costs by cutting corners subcontracting to yet other companies, who in turn will do the same, all the way to the bottom where the work is being done by 'independent freelancers' under contracts that in no way resemble the original requirements. Then, one day, it will all collapse when 'Amit Patel' in India just happens to be ill while a critical bug needs to be patched, the damages are running into the millions per hour, and the lawyers of the 300 companies involved are trying to figure out why it appears that nobody is actually responsible for actually fixing the problem.
Then the government will step in, fix the bug and spent huge sums of money just to keep the companies, which are to big to fail, afloat.

At-Will Employment

[Moof123]

We are all temporary employees for the most part. I was told I was likely to have 6-7 jobs in my career, and less than halfway through I am on employer #7.

The gigs might be getting shorter, but we have lived in a hire/fire economy for a couple decades now. Hire when you need folks, and cut them loose when you don't. Nothing new here. There are a lot of headaches with contractors that having employees actually avoid, namely the need to actually plan and think out a chunk of work before throwing warm bodies at it.

Company Loyalty

[Anonymous Coward]

My Loyalty to the company extends to the point of the next paycheck, no further.

That's the company's treatment of me, and I reflect same.

Lay me off at a whim, I'll tell you the CEO's password for a chocolate bar.

Re:Company Loyalty

[tsstahl]

Correct. Duty is bought; loyalty is earned.

Though, I would never do anything to bring harm to the data.

Personal experience, rough on families

[Tablizer]

I used to "gig around" a lot, and found it difficult to co-raise a family under. If you are single and can hop all over the country and/or globe, that's great! But it's hard on families.

During good times you may be able to stay mostly local, but good times rarely last. The boom/bust "business cycle" of capitalism has been going on long before the USA existed, and has yet to be solved.

If gigs paid very well, then perhaps one could live with more gaps by saving up. But I have not seen a significant lasting pay advantage, especially during recessions.

Maybe a few "elite" workers with speedy eyes and eidetic memories can pull it off and come out ahead of traditional salaries, but by definition, most of us are not elite.

This is an easy answer

[quietwalker]

Is there business value in retaining, training, and developing individuals who will become domain experts with cross-functional expertise and proficiency with working within your business structure?

        Well, of course. That's a hypothetical question.

The real question: is that value greater than the cost to retain them vs. the cost of hiring multiple underpaid, low quality workers, perhaps from another country?

This is going to different industry to industry, and company to company. Those selling software as a service may find their short term apparent advantage results in a severe disadvantage over the long term. Those releasing products may see great gains in that same long term view, with a painful short term as their teams are brought up to date.

If any of these trends /are/ true on average, though, then the good companies will survive and the bad ones will go under in a socioeconomic version of natural selection.

In either scenario, there will still be other companies that value long term employees, and those that don't.

Re:This is an easy answer

[Slashdot Junky]

Measuring true cost isn't always easy. I suppose measuring true value is hard as well. Think long-term cost and value. Labor is just part of the cost. Quality of work can be a cost when it is low and convey value when it is high. I can go on and on about aspects like this that should be measured and considered sufficiently by a business when they are planning staffing strategies. I will say that a business that sees an employee as nothing more than a dispensible warm body acting as a means to revenue and, thus, profit should expect said employee to care less even when not caring goes against his or her nature.

I'd say that it isn't a problem.

[dasgoober]

Finding, vetting, and hiring freelancers take up so much time and effort, not to mention cultural fit, getting them up to speed with the business and code quality and how it fits with the rest of the code-base, that I couldn't see most of the organizations that I've worked for, doing it to any appreciable amount.
And as far as telecommuting freelancers to get a cost savings, I've seen companies turning more wary of workers telecommuting

Betteridge's law of headlines

[arielCo]

Betteridge's law of headlines doesn't look so good now, does it?

Re:Betteridge's law of headlines

[vel-ex-tech]

Came here to say this.

Looks like Betteridge strikes again! It's time to move away from tech. I don't know why, but the Illuminati have decided that tech work must needs be worthless. We see H-1Bs, the Everyone Can Code! Narrative, and more. Our skills are derided, and we're painted as a bunch of misogynerds (regardless of lived gender, only the assigned one matters to these dipshits) who are keeping women out of tech with our jargon.

Time to move on.

Full-time permanent is required

[Todd Knarr]

Having been on the permanent-staff team dealing with contract workers, I can't see permanent staff ever being replaced by "gig" developers. A lot of things depend on having not just skill in programming but familiarity with the business and prior decisions about the system's design and architecture. You can hire short-term people for specific tasks, but you need people who've been there long-term to work out how to fit new requirements into the system as it exists. Then there's maintenance. Bugs that make it into production tend to be obscure and hard to trace, and someone new who isn't intimately familiar with how things fit together's going to be completely lost trying to troubleshoot a bug that's not in any component but in the interaction between 3 different components (or worse, a bug caused by all 3 components being absolutely correct and bug-free but that particular account's so old it has a combination of settings on it that isn't currently legal and that the documentation doesn't mention).

The permanent staff won't be the cheapest in absolute terms, but they'll be the cheapest in terms of dollars spent for results produced. This isn't a guess, it's a prediction based on the outcome of the vast majority of attempts to replace permanent development teams with contract workers and consulting firms.

Re:Full-time permanent is required

[dbIII]

Just because it's a bad idea doesn't mean it doesn't happen. Sometimes "the numbers" look good so people do it to progress their careers at the expense of their employer. A steelworks I worked at for a three month gig as a contractor went that way and they managed to go from record profit to completely shut down in under three years - but "the numbers" were good. Tons of steel per permanent employee hour was up through the roof - but so were costs.
In software terms I'm using a package where permanent staff were laid off and contractors were brought in to do a complete rewrite in 2003. They've updated the GUI but not much else in the twelve years since. Last I heard the contractors were working out of Pakistan, maybe India was costing too much?

as one of the freelancers...

[Anonymous Coward]

I've been working 10 years now as a freelancer. Like anything, it has its good and bad points.

I'm pulling down the same sort of salary as I'd be getting as a permanent employee, once you factor everything in (e.g, I get more in my paycheck but I have to pay my own benefits, but it balances out about the same with everything considered). I get to be my own boss, pick and chose what I want to work on, and when, and for whom. On the other side of the coin, there's always the worry about finding the next gig, and there's a higher ratio of learning overhead, and more travel.

My average contract length has been 2 years, and I've worked for both some very, very major companies, and tiny little ones with only a few employees.

All told, I like it and wouldn't go back even if you paid me twice as much to, but it probably isn't suited to everybody's preferences.

Re:as one of the freelancers...

[thinkwaitfast]

Same here. Most, if not all, of the contractors that I know feel the same way. Back before .com, one company was losing people who went freelance and had to make a rule that you could not come in as an independent for two years after working as a direct. You could have a two income family, one with benefits and the other bringing in major bank. It's still this way with most engineers I know.

In the 1990's we were told that

[thinkwaitfast]

pros should prepare themselves for the dynamics of a world that depends more on contingent work

Nothing new here

Even the blind hog

[rsilvergun]

finds the acorn now and then (and yes, I know Hogs hunt by smell, it's an expression, roll with it).

They're probably trying to dance around the real issue, which is that there isn't going to be enough work for all us tech workers. With all the outsourcing and H1-Bs and what have you. That plus the "Gig Economy" is a fancy way to say companies don't want to pay for benefits, paid leave and pay raises. It's basically a massive pay cut on a scale that I don't think has ever happened. You don't really want to bring that up because if you think you're having a hard time swallowing these "insights" imagine what accepting the brutal reality of the "Gig Economy" is like...

Contracting vs Gig

[aaarrrgggh]

Most people cannot survive running their own business, period. That said, skilled professionals who can should come out ahead doing independent contract work over full-time employment. You break even with around 1,000 billable hours in a year typically, if you can control your billing rate effectively. If you can't control your rate (or negotiate well), you end up needing to work about 1,600 billable hours to break even.

Target billing rate should be full-time equivalent salary/2080 hours*3.0, or roughly your current salary divided by 700.

Contracting of non-core functions does make sense for small and mid-sized companies. Large companies really should have in-house expertise though. When they contract the work out it is really just an MBA fantasy.

Re:Contracting vs Gig

[0xdeaddead]

when you are independant in the usa, you have higher taxes, and you are required to buy the expensive insurances that employees dont need to carry, like business insurance, data insurance etc. Not to mention you'll need to do your own payroll, more accounting work, it's a real pain in the ass.

it makes me glad to be an offshore outsourcer as I can undercut and I don't have any 'affordable care' nonsense.

the real solution is working remotely, and working in asia.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Institutional Knowledge is irrelevant

[rsilvergun]

The folks driving these changes figured that about 10 years ago. The solution is really, really simple. Labor costs have plummeted. It's cost effective to devote 5+ poorly paid employees to a task that used to be managed by 1. Don't underestimate the "Gig Economy". No benefits and on demand labor. Have any downtime at work? Most techies relying on Institutional Knowledge do.

So what you do it take complex tasks and break them down into simple processes. I'm sure you've seen this. Situations in a company where the right hand doesn't know what the left is doing. You're seeing a few gaps and bugs in the system. They're being worked out. In the meantime companies take those complex processes and break them down into simple, easy to train ones. Your one $40/hr + benefits irreplaceable employee gets turned into 3-5 $10/hr no benefits replaceable ones. If you outsource the parts of a process that don't require customer service/interaction you can do it with a $2/hr no benefit employee. Net savings is usually on the order of $10-$15/hr x 160 hours x 12 per employee. About 20k/yr each. If you're a large enterprise that's all pure profit.

Re:Institutional Knowledge is irrelevant

[ClickOnThis]

Institutional Knowledge is irrelevant. The folks driving these changes figured that about 10 years ago.

Oh boy. I can safely say that you will never be part of any company that aspires to greatness. Oh, wait:

Hi! I make Firefox Plug-ins. Check 'em out.

Yup.

You go on:

So what you do it take complex tasks and break them down into simple processes. I'm sure you've seen this. Situations in a company where the right hand doesn't know what the left is doing.

Seen this? You bet I have. The result is that nobody understands how they're contributing to the whole. The players create a pastiche of interpretations that resemble a tangled ball of string. In a culture like that, the adherence to a grand design is a desperately futile dream.

[other specious arguments about achieving greater efficiency by breaking up work units into even tinier pieces]

This is all possible if you need only one person who understands the vision, who are supported by a multitude of worker-ants who do his/her bidding. In short, an agricultural or manufacturing setting, not one that develops innovative technical products.

Not sure how to solve for it

[rsilvergun]

most people want to believe they are elite. It's a pride thing or something. But it's really hard to get folks to admit they're average, even though it's statistically likely they are. That's what makes the Gig Economy and these lousy contractor jobs so enticing :(. I knew a tonne of contractors who swore by the work but had things much worse than me as an employee at jobs I did. I also noticed they took full time jobs first chance they got...

freelancers end up more expensive overall

[raymorris]

I've been closely involved with top-performing sectors of internet (including web hosting, etc) businesses since the around 1995-1996. It started out as mostly freelancers, mom and pop shops, doing business with each other. It's been cosolidating into much larger companies in a very noticeable way. The reason is cost. It costs more to have have 400 seperate companies, each employing one or two people, then to have one company employing 400 people.

Consider but two examples - taxes and insurance. If you have 400 people each having self-employment taxes to deal with, all separately buying individual insurance policies, you have to pay them enough to make it worth payng for and dealing with. The company down the road can save money while offering employees more by getting group insurance and filing -one- business return, not 400.

Sure, if you only need a CISSP certified security expert for 60 hours per year, you contract that out. But for most of your workforce, you want them 40 hours per week, all year. In those cases, the majority, employees end up costing less overall. Of course, the exact number of hours that's the cutoff will depend on the current federal and state government policies. California is a clear example - if following state and local laws and regulations cost $20,000 per employee per year, that'll make contracting out more attractive than if employer costs are $5,000 per employee per year.

Re:freelancers end up more expensive overall

[hairyfeet]

Sigh...you REALLY don't know how this shit works, do you? Let old Hairy break it down for ya, mmkay?

1.-Corp A MBA (Master of Being an Asshole) gets hired, he fires everybody and replaces them with outsourcing. 2.- Because you have a broken stock market thanks to the billions pumped in by the feds thanks to 401Ks and 403Bs you have a market filled with gamblers so the second they see Corp A profits went up? Stock bounces, MBA gets credit for his "aggressive cost cutting measures". 3.- MBA cashes out, gets hired by new corp based on his "stellar cost cutting skills" at Corp A. 4.- Corp A goes belly up but by that time MBA has moved on and so gets none of the blame! Lather rinse repeat.

If you want a couple examples of this in action just look at Circuit City, where the MBA fired all the high paid employees (who were making that much because they were highly knowledgeable and good at making sales) and replaced them with any kid they could get off the street. Stock bounced, cash out, company went to shit because the kids didn't know shit and just wandered the store. Or AMD, who is just now beginning to struggle back from the horrible blow dealt to them by their MBA, which at a critical juncture fired all the chip designers and replaced them with automated layouts, which give you more than 10% wasted space and more power usage than hand design. Stock bounced, he cashed out, lather rinse repeat.

So I hate to break the news to ya, but logic and sanity? Really have no place in this arena, we're talking about an arena run by sociopaths that have NO problem burning a place to the ground and costing thousands of their fellow Americans everything they own if it'll give them a 10% stock bounce and a golden parachute. Remember the words of Thomas Jefferson "Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains."

Contractors can have institutional knowledge

[SuperKendall]

If you hire a contractor for a long enough term, you can have pretty good amounts of institutional knowledge - You find a few contractors over time that really know the subject well and are effective workers, then do what you need to to keep them around at least a few years.

These days you have just as much risk of key personnel leaving if they are any good. In some ways a contractor is less risky as they will be more prone to be clear if they need more money to stay on longer, whereas an employee might find it easier to get a raise by finding a different company (I know that was true back when I worked for large companies, getting a raise was far harder and offered less reward than moving to a different company)

Ask the clothing piece workers

[dbIII]

Ask the clothing piece workers how the "gig economy" goes. It's nothing new it's just a different sector of work bound for Bangladesh or whoever is bidding the least.

Some industries need MORE gigging.

[Malkin]

In my opinion, he videogame industry suffers from insufficient gigging. Instead of using temporary labor, they invariably hire for a bunch of "permanent" positions that they can't afford to keep filled, in the long term. Then, you see the all-too-typical giant wave of layoffs at the end of the project.

A fake full-time position can be far more harmful than a temp position. At least with a temp position, you can make appropriate plans. With a fake full-time position, they hide the axe right up until it's time for the execution.

Insufficient gigging for who?

[rakslice]

I suspect that's an industry with exactly the right amount of gigging. It's a buyer's market for employees loaded with excess optimism! Sure, not every employee is naive enough to believe in the future of their fake full-time position, but I think we have to accept that many are, and most people in a management role aren't altruistic enough to tell others hard truths when it is just going to lead them to hire (potentially worse) people sooner.

Cheaply?

[Archibald Buttle]

I find the notion that there's "pressure to farm it out cheaply and easily to freelancers" to be ludicrous.

I'm a software developer contractor in the UK. This is a relatively new thing for me - in my 20+ year career I've only been a contractor the past two. The last couple of years have been by far the most lucrative of my career. In every gig I've had I've been paid more than twice as much as the most senior permanent developer.

But I don't want to be an employee

[Anonymous Coward]

Trust some entity to be my only source of income? No thanks. I'd rather have 2-3 income streams... they're not likely to shut down all at the same time.
If you like your employee status you expose yourself to the whims of MBAs. Not a good idea.

Yes, but they have to chance their perspective.

[Qbertino]

I'm your Type-A 80ies computer kid turned web-dev in 2000. The line between stable long-term occupation and freelancer has been blurry ever since. This comes with the profession and the times we live in.

I've been in active in the industry for 15 years and now call myself a "Consultant & Software Architect" for FOSS and non-trivial web-applications (flashy name required for being taken seriously as a senior). The software we use at my current employer is matured FOSS, most of the coding is done already. 15-20% of the work consists of slapping together various pieces and building a whole project, adjusting preconfectioned webdesigns with some CSS and jQuery hacks on the side, maintaining the deployment pipeline, doing a little helpdesk, patching IT, etc. The other 80% are office, partner and customer politics, writing important sounding requirements-analysis and covering the companies ass on the technical side when we prepare to take on a deal.

If I would insist on only doing coding, I'd be one of the freelancers we hire to do the work for a few weeks, two or three times a year. One guy is a freelance web-guy, the other is a student who's good at Bootstrap and WordPress and is more into politics and probably has other long term plans than staying in webdev.

Since I'm important for deals and revenue I've got a part-time fixed position. Which is just the right fit for me and the company.

If everything goes right, our jobs, like most others will mostly be done by robots/software when we retire. Software is eating the World.
It's called progress and you should prepare for it.

Which is why it's a bad idea...

[sirwired]

Well, it depends on the work I suppose. If you can land a long-term gig as an independent contractor then yes, you can ratchet your rate expectations down a bit. But if the jobs you are taking are piecemeal? Then needing to bill at around triple what you'd earn as a regular full-time employee is about right. Somebody working in fits and starts has to cover:
- Benefits
- Downtime
- Payroll taxes
- Liability Insurance
- Overhead (i.e. travel, legal bills, things an employer might reimburse you for, like your cell phone)
- Non-billable labor (time spent doing all those mundane tasks you would foist off to corporate functions (i.e. billing, accounting, marketing, etc.)

What? You can't get anybody to pay it? Well you are almost certainly earning less than an employee doing the same job would be.

Can't see Circuit City anymore. CEO seeking a gig

[raymorris]

> Just look at Circuit City, where the MBA fired all the high paid employees (who were making that much because they were highly knowledgeable and good at making sales)

I can't look at. Circuit City, they're gone. Moves like this which increase costs while reducing revenue and causing bankruptcy are self-limiting for private companies. And to be honest, "bankrupted Circuit City" as actually a -bad- mark on one's resume. The former Circuit City CEO is currently unemployed/ self-employed, looking for gigs himself.

Re:No workers can survive the Obama economy

[kilfarsnar]

Obama's too busy "rebuilding" the US economy along "progressive" lines to notice the lack of jobs.

If you think Obama is a Progressive, you really need to turn off the AM radio.

Yeah, I know - what do you expect about a President who learns about major world events by reading about them in the newspaper? Do you REALLY expect someone like that to do his fucking job when he just about BRAGS about NOT doing it?

Again, if you think the President, any President, learns about major world events by reading the newspaper, you need to turn off the TV.

Bad Assumptions

[JimSadler]

Millions of workers are always being displaced by technology. It is foolish to assume that, in the near future, computers and machines will replace people at the top of the tech industries. Surely computers will be able to create superior software, vastly reducing the need for programmers as well as many others in the industry.

It will peak...

[whitroth]

And either level off, or drop.

When I was last looking, in '09, I hadn't seen so many temp-to-perm and direct hires in 15-20 years. And the reason: the fallout from the Microsoft lawsuit.

Companies went to 3 years, then at least a six month "furlough" before they could be brought back on. Then two years. I think I even heard a report of 18 mos. For jobs that need to keep going, the hiring managers clearly had started pushing back. Even an experienced person, who might start being productive in a couple-three weeks, wouldn't really *know* the systems for at least six months or more. And if management wanted to hire low-priced, inexperienced people, we're talking six months and more to actual productivity. To have them walk out after a year, year and a half, and you've got a major tech headache.

For short jobs, yeah. For stuff that is critical to your organization, and has to be kept running, and maintained and enhanced, you need long-term people.

And the rest of you... I'm sure you get real adrenaline rushes, getting hired for a high rate... and then paying your quarterly taxes yourself, and finding healthcare and insurance for yourself (which will be a *lot* higher than what employees get), and that time "between positions"....

Now, if we had *UNIONS*, and you could go to a hiring hall, and get called in order, and not depend on some moron's assessment that you're "not fresh" (direct quote from an idiot I was talking to about 10 years ago).... But noooo, you're sure you, as an individual, as *so* special and *so* unique that they'll bend the rules for you....

              mark

Re:This!

[Tablizer]

Offshoring and automation have essentially cheapened the value of much of human labor. However, all this automation and outsourcing has also made stuff cheaper. Ideally their slide rate would both match more or less, or even provide a net benefit for regular folks.

However, salaries overall seem to be slipping backward*. So, why are they not balancing out? Because the owners of capital and corporations rigged the rewards of cheaper labor/automation to go them THEM instead of us, and lobby heavy to keep it that way.

* Wages for existing jobs are stagnant, but if you lose your job, often you end up going back to work at another org for less. Thus, on average salaries are sliding backward when inflation is factored in.

Re:Can't see Circuit City anymore. CEO seeking a g

[hairyfeet]

It was the CEO BEFORE the last one that burnt the company for the insurance, that is how this works. Its the same with AMD, the current CEO is trying to stop the bleeding, even going so far as to hire back the designer of the Athlon64 from Apple, but it was the one after the founder (Rory Read I think, but they went through 3 real quickly) that fired everybody and cashed out.

You see its like playing hot potato, you don't want to be the one left with the bag.

no, look it up

[raymorris]

Look it up. The CEO who fired all of the high-paying sales people - see what job he has now. He's got a web site where he's looking for gigs because he can't get a steady job.