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Percentage of Self-Employed IT Workers Increasing 138

Posted by samzenpus
from the never-take-off-your-pajamas-again dept.
dcblogs writes "The tech industry is seeing a shift toward a more independent, contingent IT workforce. About 18% of all IT workers today are self-employed, according to an analysis by Emergent Research, a firm focused on small businesses trends. This independent IT workforce is growing at the rate of about 7% per year, which is faster than the overall growth rate for independent workers generally, at 5.5%. A separate analysis by research firm Computer Economics finds a similar trend. This year, contract workers make up 15% of a typical large organization's IT staff at the median. This is up from a median of just 6% in 2011, said Longwell. The last time there was a similar increase in contract workers was in 1998, during the dot.com boom and the run-up to Y2K remediation efforts."
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Percentage of Self-Employed IT Workers Increasing

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  • Well.. (Score:5, Informative)

    by Moheeheeko (1682914) on Monday December 23, 2013 @02:31PM (#45768323)
    ..Anybody who finds this suprising hasnt spent any time working IT for a company. Working IT in any company is a thankless job where every problem is your fault and must be fixed 2 hours ago.
    • Re:Well.. (Score:5, Insightful)

      by cold fjord (826450) on Monday December 23, 2013 @02:40PM (#45768415)

      It is an occupational hazard. When you are good at your job, have a decent architecture, and have at lest the bare minimum of resources, you can pretty often keep things running reasonably smoothly to external appearances. Since things aren't obviously wrong people won't complain, they think you have enough, and think your job is "easy" since nothing big seems to go wrong. What they don't see is you scrambling behind the scenes to compensate for the lack of resources, catching problems and the occasional disaster before they happen, and wishing you had one more person so that you could finally get some real vacation time in. They will be deaf to your resource requests. Then they outsource you and are shocked at the bill.

      • by CODiNE (27417)

        Yeah my old boss used to ignore maintenance on non-critical things and let them break pretty much on schedule. That way the bosses saw us as "busy".

        Used to drive me nuts, I'd rather do preventative maintenance and use the extra time to improve things.

        Sadly I suspect much of IT operates under the broken window fallacy for this reason. Imagine what a non-disfunctional IT policy could do for a company's productivity.

        • It's all about proving a negative. If shit breaks, you're deemed an idiot for letting it happen in the first place. If things don't break, what the hell are you doing with your time and why are we paying for it? Either way, you lose!!!

          • Or as one president of a *software consulting group* put it, "I don't feel that I owe you a living,and I don't know what you do around here, and I don't care". I had no idea how to answer that other than put out resumes on the job boards.

      • The problem I've always seen when working in corporate I.T. is "when it rains, it pours", but just as often, there's not a proverbial cloud in the sky.

        Management justifies hiring of additional staff by analyzing how much workload there is, above pretty much everything else. This is usually a pretty sensible way to go about things. After all, if you're talking about people working in, say, your warehouse's shipping department? When they complain they need an additional employee out there? Management is going

      • by dbIII (701233)
        It depends. If you come into a place and take it from where something is obviously wrong to running reasonably smoothly then those with long enough memories will usually make sure you have to resources to avoid that scrambling behind the scenes. Downtime often costs more than having spare old hardware that can keep things ticking over when the real stuff fails. However once there's a lot of changeover of senior management the situation resembles what you have above but spread throughout a place and not j
      • Mother of god I wish I could mod you into infiniti and beyond.
    • by hb253 (764272)
      Odd, the only contractors I see are shipped from India for a few weeks or months so they can be trained by the soon to be unemployed staff and then are sent back to India by their contract company.
    • by dimeglio (456244)
      2 hours? In my company, when the system goes down, if it's not fixed in 30 seconds, they take us outside and execute us. /s
    • Re:Well.. (Score:4, Insightful)

      by msobkow (48369) on Monday December 23, 2013 @06:21PM (#45770185) Homepage Journal

      More importantly, working as an employee often means 60 hour weeks without overtime.

      Contracting, I was always paid straight-rate overtime. Not time and a half so as to gouge the customer, but at least compensated for my time. I found contracting kept me in a better headspace about work, too -- I never counted on the company to keep me around. So while my co-workers would be all freaked out at being downsized, I'd just shrug my shoulders and move to the next job with no hard feelings on either side.

      • I'm an independent and have been for many years and I'm almost never asked to work overtime. It's funny how companies suddenly care about your time when they have to pay for it. Exempt employee status should be renamed to "exploited employee who doesn't get paid for his work".

  • As a 1099, you are not an employee and the company is not responsible for any benefits. So the company can on the fines for the ACA.

    • Re:Another reason... (Score:4, Interesting)

      by cayenne8 (626475) on Monday December 23, 2013 @02:44PM (#45768441) Homepage Journal

      As a 1099, you are not an employee and the company is not responsible for any benefits. So the company can on the fines for the ACA.

      True, but as you being the contractor on the other end of things, you can write off a LOT on your taxes, all work related mileage, you supplies, cell phones, internet...etc.

      While it does give you a bit of paperwork to contend with, once you pass that first slightly high part of the learning curve, that part becomes regular rote actions with a little time.

      Hire a CPA, and you're likely golden. Sure, its a bit more effort, but how much effort is worth keeping your hard earned money from the IRS as much as possible?

      • "Sure, its a bit more effort, but how much effort is worth keeping your hard earned money from the IRS as much as possible?"

        Presumably the same number of dollars/hour that would be worth it for any other way of obtaining money by wading through accounting paperwork(or doing some other approximately equivalent work).
    • by Trepidity (597) <delirium-slashdot AT hackish DOT org> on Monday December 23, 2013 @03:08PM (#45768611)

      It's rarely for cost savings on the company's side; contractors are almost always more expensive when you've added up the overhead on both sides. Among other things, contractors typically bill at higher rates, and also bill for commute and travel time: if they send a contractor on a business trip, the entire time he or she is on the plane, in the security line, etc. is billable at full engineering rates, while salaried employees don't get any overtime for that.

      The main budgetary advantage of contractors is that they're much easier to flex as staffing needs vary.

      • by msobkow (48369)

        More importantly, 100% of a contracting fee is an expense for the client company. They can't necessarily write off all their expenses for an employee -- especially the employer side tax contributions.

    • by garcia (6573)

      Or the company provides the minimum insurance to meet the ACA mandate and forces you out into the private insurance world to get coverage wholly on your own.

      I'm not complaining about it mind you, I'm just stating that 1099 isn't the only thing companies are doing to avoid this these days.

  • by Trepidity (597) <delirium-slashdot AT hackish DOT org> on Monday December 23, 2013 @02:37PM (#45768393)

    It'd be interesting to see statistics, but my guess is that self-taught technologists are over-represented in the self-employed. Many companies make it harder to get hired if you don't have a degree when you're applying as an employee, but if you're an LLC doing contract work it goes through a different route and suddenly degrees aren't even in the equation.

  • by Anonymous Coward

    The trend is for part-time workers - no benefits and use them only when you need them.

    Basically, the trend is to put more business risk on the workers while not compensating them for it.

  • by spiffmastercow (1001386) on Monday December 23, 2013 @02:41PM (#45768421)
    I'm betting that 18% includes people forced onto contracts because many companies no longer hire full time employees or require "contract" work before making a full time offer.
    • No, those people are technically employed by a temp agency. I know, Im currently "on contract" where I work, and have been for two and a half years. I shouldnt complain though, there are some who went 5 years on contract before finally saying "fuck it" and finding a new job.
      • And I'd be willing to bet you're not an FTE for the temp agency either. They refer to us as "full-time employees", but we're still only employed for the length of the contract with their client and are not given the same benefits as those who work in the agency office.

    • by cayenne8 (626475) on Monday December 23, 2013 @03:05PM (#45768585) Homepage Journal
      Hey..in this day in age, there is no such thing as a job for life anymore, and there is virtually no such things a loyalty from a company towards the employee any longer.

      So, I figure, if you're gonna have the job stability of a contractor, you might as well be a contractor and at least get the bill rate that goes along with it.

      • by Anonymous Coward

        You've got a point. At least with a contract you've got a written, legally binding document that specifies your work terms and duties. (And should contain clauses that prevent your employer from screwing you over.)

        Current business culture and employment law makes rake-and-file employees little more than creatively named prostitutes. I'm not kidding. American business management and ownership seems to be infected with a perverse hatred of their employees. - Yet they'll happily spend more to hire a contractor

        • by Zeromous (668365)

          Legally Binding HAH! Okay, good luck binding a big company to your deal after their legal department is through with you!!!!

    • by riis138 (3020505)
      This is not always a bad deal, I started out at the large organization I work for two years ago. They generally require most, if not all, IT staff to start out on a contract. I did this for a year and got an offered for a full time position last summer, which for this area, is highly competitive. Oftentimes, theres a light at the end of the tunnel.
      • This is not always a bad deal, I started out at the large organization I work for two years ago. They generally require most, if not all, IT staff to start out on a contract. I did this for a year and got an offered for a full time position last summer, which for this area, is highly competitive.

        Oftentimes, theres a light at the end of the tunnel.

        I know someone who did that. Then after 20 years or so, they dumped him on the street.

        But it wasn't age discrimination, don't you know...

    • I'm betting that 18% includes people forced onto contracts because many companies no longer hire full time employees or require "contract" work before making a full time offer.

      It includes people who are tired of obtaining a "permanent" position only to have the entire department liquidated 2-3 years later. Repeatedly. As a contractor, I can have multiple clients, which makes it less likely for them to all "fire" me at the same time.

      • I'm betting that 18% includes people forced onto contracts because many companies no longer hire full time employees or require "contract" work before making a full time offer.

        It includes people who are tired of obtaining a "permanent" position only to have the entire department liquidated 2-3 years later. Repeatedly. As a contractor, I can have multiple clients, which makes it less likely for them to all "fire" me at the same time.

        That's fine, I'm not talking about people in your situation. Personally I'd probably do the same if I didn't need a consistent stream of income and health insurance to support my family. But there are a large number of IT workers out there that are on "contract", but are treated as an employee. This is basically labor fraud, and it should be stopped.

    • by punker (320575)

      I am a self employed contractor, and it's not a matter of being "forced". It's not for everyone, because you have to manage your own accounting and benefits, but you can make it work just as well or better than working for someone else's company. I have a group health plan (my wife also works for our company), 401k, and my annual income is substantially greater than my last W2 job. I get a couple unsolicited contract offers every week, which is what I view as my income security. I'm pretty good at what I do

  • by Gothmolly (148874) on Monday December 23, 2013 @02:57PM (#45768537)

    No training, so people build labs at home.
    No laptop, so people BYOD.
    Stupid corporate standard desktops, so people do VirtualBox/Cygwin/VMWare/etc/etc
    Nobody hires FTEs because of (insert reason here) so people often contract anyway with middlemen pimps.

    • by Kagato (116051)

      I've been consulting for over a decade. I don't expect the company to pay to train me in a formal class, but they should expect project estimates to include "Marco Polo" time when you have to research something cutting edge.

      Personally I like have work and personal computer space having a definite air gap. Most places have an IP agreement that stipulate their time and their equipment. Which is fine by me. If you want me to work at home you'll need to provide a laptop. If I'm going to set up a home lab i

  • black listed if are / have been sick in the past and can get a plan

  • A lot of places likely to call some of there workers 1099's but they like to control them like W2 workers.

    Also some temps are W2's but are basically self-employed and some temp / staffing agency is just doing payroll / taxes.

    • A lot of places likely to call some of there workers 1099's but they like to control them like W2 workers.

      Also some temps are W2's but are basically self-employed and some temp / staffing agency is just doing payroll / taxes.

      The IRS takes a pretty dim view of this practice, but blowing the whistle can be risky in a small enough environment that they know who did it.

    • by LDAPMAN (930041)

      The first practice is illegal and it is fairly aggressively enforced. Most large companies go to a lot of trouble to ensure this is not happening and that they are demonstrating compliance.

      The second practice is perfectly legal.

  • So is this a good thing, or just dismal? At the higher end, daily rates for externals can be much better than internal staff salaries -- but of course, with caveats and the usual temporary nature of assignments. And clearly, some people are more suited for this sort of thing than others. I'm interested to hear experienced opinions whether you consider this headline statistic as a good or bad thing.

    I'm undecided because the article (and my limited awareness) doesn't break down the types of self-employment
  • by Joe_Dragon (2206452) on Monday December 23, 2013 @03:19PM (#45768697)

    We need an union hiring hall system for IT with

    real job training

    some kind of an apprenticeship system.

    workers rights

    the power to say no then the boss wants stuff rushed or things like QA passed over.

    • We need an union hiring hall system for IT with

      real job training

      some kind of an apprenticeship system.

      workers rights

      the power to say no then the boss wants stuff rushed or things like QA passed over.

      I vote for something more like trade guilds myself.

      If you're a guildsperson, you're independent and can pick and choose who to work for, when, where, and how.

      If you're a union member, you're at the mercy of a single employer, and work the location and hours that the employer says. The union can intercede, but the final choice is a compromise between employer and union, not between client and worker.

      • by Anonymous Coward

        And definately stay away from the local government unions (csea for example). Our union has no bargaining power. If the board of supervisors and the union cannot come to an agreement (raises etc), it goes into arbitration. If arbitration fails it goes back to the board for a final decision. Oh, and we are legally only allowed to strike on our own time (read as lunch and breaks). I also imagine the State is pissing my pension away as I type this. Several times now we have received 0% raises while cost

    • by Anonymous Coward

      What we need is to over turn the 'computer workers' exemption from federal overtime laws in the US.

    • the power to say no then the boss wants stuff rushed or things like QA passed over.

      Just because you don't have the balls to say NO to your boss. People who whine about not having worker rights are the lazy ones that don't provide any benefit to a company, and they KNOW that they will get fired if they speak their mind. Make yourself valuable, and then your voice will be heard. Until then, work harder.

      • Just because you don't have the balls to say NO to your boss

        Miners etc died for taking on needlessly dangerous conditions because they needed the money and "don't have the balls to say NO" which is one of the reasons trade unions exist.

        A quote from an employer arguing against gun control from less than a century ago in the USA - "you can't run a mine without machine guns". Try saying no to such an employer. There's one in South Africa that could have said the same thing last year.

    • by couchslug (175151)

      Union trades have enough trouble with rats because so many tradesmen think they are special snowflakes. (Some are.)

      Good luck with the cat herding, especially in a physically comfortable field such as IT which can be far more easily outsourced than physically demanding and manually skilled trades such as pipe welding.

  • This has been going on for a while in the UK. Umbrella companies are common which is why toothless IR35 law was bought in. The bosses save on severance/redundancy/perks (dont laugh) and also 13% on the gross wages of each 'private contractor' and also 2% on mandatory pension contributions. While employees get to claim expenses off simply going to work like commuting and stuff.
    • by mjwalshe (1680392)
      Funny how other one person professionals like accountant's, lawyers and plumbers etc didn't get hit with IR35
  • The problem I see is there's not nearly as much college hiring as there used to be. I've been contracting since the 90's. I work with a lot of mid-cap and fortune 500 clients. When I first started we would often have a few college hires on the programming teams. I haven't seen a college hire programmer (or heaven forbid an intern) on a team in 6 years. They don't want to hire a college kid they have to train and mentor when they can get an "experienced" H1B contractor.

    Off-shore and visa workers have cr

  • Either work for someone, making (where I live) between 30k-75k per year, working long hours, traveling around the country (yeah, the good fun that comes with airports in America these days) and doing it all wrong, due to management's idea of how things should be done (which is usually about 15 years behind the times), and then later taking an ass-chewing for customers not being happy with the result of it all.
    Or, work for yourself making (in my area) anywhere between 60K-125K per year, (mostly) doing thing
    • All the increases that you claim to have in freedom and pay are clawed back by taxes, benefits(with no benefits related to scale), and general instability(economically equivalent to Fukushima).

      That and you dont get the general camaraderie from being in a group over a longer period of time. So, for most people, salary beats contract when everything is put on the table; the only time it doesnt is for the exceptional and rare few.

      • All the increases that you claim to have in freedom and pay are clawed back by taxes, benefits(with no benefits related to scale), and general instability(economically equivalent to Fukushima).

        I don't know what you mean. When I was working for someone else, I was paying taxes and that. I also never knew when my job was going to get cut out of the picture (I know that this is not the same for many others, but in my case it was).

        That and you dont get the general camaraderie from being in a group over a longer period of time.

        I think the opposite is true. Rather than work with the same 10 or so people at a job that we all hate, I work with many clients that all love it when I come in.

        So, for most people, salary beats contract when everything is put on the table; the only time it doesnt is for the exceptional and rare few.

        I agree, but I feel that mindset is fading away for the IT world. There's a point in every company's growth,

        • by sethstorm (512897)

          I don't know what you mean. When I was working for someone else, I was paying taxes and that. I also never knew when my job was going to get cut out of the picture (I know that this is not the same for many others, but in my case it was).

          When working for a conventional employer under regular arrangements, one typically pays some sort of income tax. In comparison, client-based/indirect employment transfers costs(such as taxes and benefits) onto yourself (or an Employer of Record). That is what I meant.

          As for not knowing when your job gets cut, flexibility is not your friend in that regard. It's the upstream employer's friend.

          I think the opposite is true. Rather than work with the same 10 or so people at a job that we all hate, I work with many clients that all love it when I come in.

          However, you still have the issue that you're viewed as being separate versus being part of the employer. They mig

    • Do you have any tips/advice on how to get into the self-employed part of the IT/Programming profession? How did you start off?
      • I certainly don't have all the answers, but I'd say that, at least where I live, there's an extreme shortage of IT professionals that have people skills. Most all of the guys in my area are show-boaters, and always talk over everyone's head, or they don't talk to the client at all (and if they do, they scare the client). Building a common way to explain common problems that are commonly dealt with in the IT field is a very good skill to build. It's great to be able to explain "computers" as if they're pe
    • by unixisc (2429386)
      Sounds good, but how do you guarantee that you have a steady stream of income i.e. work? In addition to being a programmer or admin, you now have to be the S&M guy for yourself as well
  • by Anonymous Coward on Monday December 23, 2013 @03:32PM (#45768841)

    Every IT professional's career should go through the following life-cycle:

    Employee -> hourly contractor -> freelance/small business ( -> medium/large business)

    Which mirrors the typical human life-cycle:

    Childhood -> college -> adulthood ( -> own family)

    Full-time employment is like childhood, your employer/parents take care of you and in return they control a large portion of your life.

    Hourly contracting is like going to college, you still have a lot of constraints on your life but fewer and you have to take care of yourself. In college you have sex, as a contractor you get a big fat pay cheque.

    Freelance/small business is like post-graduation life, you're now responsible for every aspect of your business/life and in return you gain a lot of independence, if only you had time to take advantage of your independence, hah.

    And if you're lucky, and by that I mean really unlucky, you partner up with a few others and grow your business and start taking care of others. At this point someone will say "you have your own company? Wow, must be nice to be your own boss!" This is your cue to assume the fetal position and sob uncontrolably, again, then ask yourself "is it really worth it?" Damned right it is!

    • Accounting for all the things you ignore(including the fact that not everyone is meant to be in the unstable sector):
      Contract work == prostitution writ large. It is something one grows out of to do more stable work.
      Regularized, long-term employment ~= monogamy. It is the type of work that represents an adult level of trust between an organization and an individual. It also unlocks benefits of scale not possible in contract/self employment.

      • by LDAPMAN (930041)

        I agree that what I do is high-tech prostitution but thats the way I like it. It allows me to extract the maximum value from my skills and efforts. I also get to choose who I work for and with. I can't imagine going back.

        By the way, "long-term employment" is about as common as a long-term marriage these days.

        • by sethstorm (512897)

          The problem with that is not everyone is suited to working that way. Many do well when in direct-hire employment relationships based on mutual trust versus employer-side contempt. They see the push towards indirect employment as an effort to treat employees worse.

          Realistically, you're in the extreme minority of people that work well with Fukushima levels of instability and more net risk than reward.

  • by Timmy D Programmer (704067) on Monday December 23, 2013 @03:36PM (#45768883) Journal
    For many IT people in the US the only reason they don't venture out on their own is concerns over health care coverage. Now that it's possible to purchase affordable care on their own this will no longer be a major obstacle.
    • by Anonymous Coward

      When companies were railing against Obamacare, I was wondering if Obamacare might lead to an explosion in enterprenuerialship in the USA. As an IT worker you basically sign away all your right to intellectual property and ideas, but as a contractor you can still do the same job for MegaCorp while developing your own projects and products.

      It it too early to tell, but hopefully the explosion is coming. :)

  • IT is a pretty big field. Which positions are affected by this? HelpDesk? Desktop? Server? Windows Administration? Is this happening in Large orgs? There's really no substantial information in the article to help the reader draw any kind of conclusion for themselves.
  • by Enry (630)

    There needs to be a lot of cross-pollination of ideas and technology between companies. It's far easier these days to get stuck in an IT rut and stick with what you know (since it works) rather than expanding into a different technology. I was at my former employer for 11 years until I got laid off over the summer. Took my knowledge, went elsewhere, and have been able to merge what I leared there with the new place and while my former employer is still struggling, the new place is doing a lot better, tha

  • and it has been all great pay. some companies offer me full time employment after a few months but i always said no to it.
  • I'd prefer to be FTE, but RIFs happen. My wife is disabled and has some chronic ("pre-existing conditions") health problems so I need a good health-care program + long-term disability ins. Historically that's been through my employer. Currently through COBRA at $1150/mo, going to $1300/mo in 2014. ACA aka Obama-care may help - we're trying to find out but it is complex. I wonder what'll happen when all the technology workers who are tied to a job because of health coverage are no longer dependent on th
    • I was able to retire. I have bought art supplies but actually spent more time playing minecraft, extra time with my grandchildren.

      IT in the US currently is pretty terrible for the vast majority. Inexpensive offshore labor is the main reason. That's slowly changing towards parity.

      But low status and expectation to work nights, weekends, and holidays are also problems with the field. I also found SOX sucked the joy out of programming-- documenting that my last gig, it cost 47 days to make a change of any

  • All things considered, I think I want to stay an FTE. I don't really need to be - my wife works and we have much better health coverage through her employer. However, one thing I've noticed with contract work is the lack of stability. Even with the high bill rates and the ability to call just about everything you purchase a business expense, there's something to be said for sticking with a company and building/fixing a product throughout the lifecycle. Also, if you can't sell, drumming up business is a lot

  • How many of self-employed (or non-self-employed) out there have to deal with "employers of record"? I'm not in IT, but I am in an industry where predatory third-party employers act as a means for companies to pass their payroll taxes, workers comp insurance, etc. on to their employees. My understanding is that this sort of thing is prevalent in IT as well, so I'm curious how many slashdotters who are in IT have to deal with this.

    For those who are unfamiliar, the grift is this: Company A, rather than hiri

  • by Anonymous Coward

    Your contract rate should be around 2x what your salary breaks down to for an hours worth of work. So if you make $100K, that's $50 an hour (include 2 week vacation) x2 = $100 an hour.

    Don't shortchange yourself, there will be dry periods and you have to cover expenses like retirement, health and accounting. Get a good accountant so you can expense all your gear, they should more than cover their cost.

    Keep networking so you have somewhere to go if your gig runs dry.

    Enjoy, you're now the CEO of you, inc.

  • The ammount of systems an IT worker has to manage these days is like running an Aircraft carrier along with launching and landing planes.
    If an IT dept. is ran well they start reducing the ammount of employees required to run the company. If things are crashing every other day then the wrath of Khan comes down.

    IT administrators hold the keys to the universe but get the dirty end of a used mop. Upper management cries when you are making over 100k a year but if you were to price out each job you are doing it w

  • 1.BBC in UK has for many years 'employed' many 'staff' on 13 week contracts. Renews if necessary , one person worked out 36 years that way. Always 'shedable' at end of 13 weeks , Actor carries his own insurance for health illness and Professional Liability to main company. Its a way of life.
    2 As a (non-IT) engineer I am now into seventh year of short term contracts for one UK company. Suits me, I work only the hours I want to work. Life Ok for reward. However I base all things on Salary in year to mysel

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