Clamour for freelance IT consultants not a sign of economic recovery

Demand for contract tech workers, whether they call themselves freelancers or consultants, is increasing, but the trend isn’t a green shoot — a signal of an economic recovery.

It may be more an act of desperation by companies struggling to keep up with work in the face of staff cutbacks.

Two job sites that use eBay-like features to match workers with employers, Elance and oDesk, have seen sharp increases in the number of employers that are hiring temporary workers from their sites.

Today, Elance averages 25,000 job postings per month from employers, up almost 50 per cent from this time last year. And oDesk says it has seen job postings on its site increase by 100 per cent over the past year, to about 17,500 jobs.

As demand for IT freelancers or consultants grows, interest by employers in hiring permanent full- and part-time employees is down.

One tech hiring board,, earlier this month said its postings have declined by about 45 per cent since last year, to 48,000 jobs. The Dice numbers are just another indication that the overall technology workforce continues to shrink.

This rising interest in tech contract help “is what we would expect to see right now,” said Stephen Minton, an analyst at IDC in Framingham, Mass.. He added that the increased project-by-project hiring does not signal an improving economy.

Some Canadian tech industry observers, however, hail the growing self-employment among IT professionals here as a good sign.

“We’re seeing many more IT folk willing to work on a consulting basis,” said Rod Miller, regional vice-president, Robert Half Technology. “And Canadian firms too are more willing to hire consultants for specific projects. In these uncertain times, it helps them get the work done without increasing their headcount.”

Miller said, many laid off IT workers are registering with Robert Half Technology as “project professionals.”

These are folk with consulting backgrounds, amenable to working on short- or medium-term projects that “may turn into full time roles or may not.”

But while a fair amount of contract IT work is available, the compensation for such jobs has decreased, Miller noted.

In that respect, he said, the market has changed a great deal.

“A year ago, contract hiring was in full spate for many different roles, in many environments. Today, it’s a far more competitive environment.”

That simply means IT professionals seeking contract work need to be more flexible, market themselves more effectively, and be ready to compromise a bit, Miller said.

That may take the form of accepting a rate cut or something else.

“Be prepared to do that,” he said. “As an IT professional, it’s better to be working right now, because you can continue to build your experience, and network, and position yourself to be taken on full time should the contract role become a permanent one.”

In terms of regular IT work, he said, there are jobs and roles for which hiring continues to be done.

These range from more generic ones – such as help desk and desktop support – to specialized positions.

“We’re seeing a demand for dot-Net developers, people with Web 2.0 application development experience, or those with network and sys admin expertise – these areas continue to do well.”

With IT security budgets increasing, the need for people with information security (IS) skills is also likely to grow.

Although IT managers aren’t undertaking new projects, they still have as many projects as they did six months ago, but with fewer permanent staffers, said IDC’s Minton, who doesn’t expect to see signs of an improving economy until the end of this year.

Michael Axelrod, co-founder and president of e-Brilliance LLC, a Philadelphia provider of both IT services and contract consultants, says that over the past two months he has seen the number of “opportunities” — potential projects for his firm — increase by nearly 50 per cent.

Companies are “being asked to do the same amount with less,” Axelrod said. His firm is in most demand for infrastructure work, especially upgrading Exchange 2003 to Exchange 2007, and for server virtualization projects.

Axelrod said he is not having trouble finding experienced workers to complete the projects. “There is more talent now than there has been for long time,” he said.

Axelrod said that e-Brilliance allows its clients to hire its contractors — but there isn’t much activity on that front now. “They still don’t know what’s going on with the economy — they don’t know when it’s going to turn fully,” said Axelrod.


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Jim Love, Chief Content Officer, IT World Canada

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