Contract Work Is Becoming the New Normal in Tech

By: Janie Kliever on January 31st, 2017

Print/Save as PDF

Contract Work Is Becoming the New Normal in Tech

Remote Work

tech contract work

The contingent workforce, the gig economy, contractors, freelancers—whatever your preferred term for this category of workers, there’s no doubt that they’re on the rise, particularly in hiring for tech jobs. And businesses are starting to realize how these types of non-traditional hires can offer a lot of value.

Traditionally, there’s been a stigma around independent workers, that they can’t get a full-time position or don’t have the skills to make it in the job market. And many companies still view the contingent workforce as a way to make some quick hires and save money, with the potential tradeoff being lower-skill workers or a lower level of work quality.

However, recent research reveals that this perspective is shifting, particularly in the tech industry: companies are seeking out contingent talent to gain specialized skills and flexibility over and above cutting costs. And it’s not just the motivation that’s changing, but the prevalence. In 2016, one in 10 CIOs at smaller organizations anticipated relying on contingent staff to fill more than 75% of their team.

The Growth of Contract Work

If you’re looking for validation about whether hiring tech contractors or other contingent staff is a smart move, you only have to look as far as the growth statistics for this workforce category.

In 2010, software company Intuit predicted that nearly half of the U.S. workforce would be contingent by 2020, since “more than 80 percent of large corporations plan to substantially increase their use of a flexible workforce in the coming years.” This includes contractors, freelancers, consultants, temporary and part-time workers, and other specialists who don’t have full-time employment status.

We’re already well on our way toward that milestone, according to a 2014 study commissioned by Freelancer’s Union and Elance-oDesk (now Upwork), which found that about 34% of the American workforce (or 53 million people) are doing freelance work.

And the growth of this category may be roughly equivalent globally: Ardent Partners’ “The State of Contingent Workforce Management” predicted in 2015 that contingent workers will comprise nearly 45% of the entire workforce worldwide in 2017.

How Businesses Can Benefit from Hiring Tech Contractors

A contingent employment arrangement can be beneficial for both companies and contractors. Contractors, particularly in IT, often receive competitive compensation and have the opportunity to work on challenging projects that provide valuable work experience and help make themselves more marketable. They also tend to enjoy increased flexibility, autonomy, and work-life balance.

Meanwhile, businesses cut many of the costs associated with bringing on full-time staff and also enable their organization to be more efficient and responsive. Let’s dig a little deeper into some of these benefits:

Finding candidates with specialized and/or scarce skills

It’s no secret that it’s tough sourcing qualified tech workers. Indeed recently surveyed 1,000 hiring managers and recruiters in the U.S. technology industry and discovered that nearly 90% find it challenging to find and hire technical talent, with 36% finding it “very” challenging.

hiring tech talent

In many cases, businesses’ hiring policies aren’t helping matters. When tech companies restrict their recruiting to elite universities or regional tech hubs like Silicon Valley, or have other needlessly limiting parameters, it can seem like candidates with right skills are in short supply.

But the solution may be a simple expansion of your hiring search to include contingent workers. This dramatically widens the available talent pool—and the variety of skills and capabilities you have to choose from.

And having the right technical abilities at your organization’s disposal is critical for driving success in today’s economy. As Paul Heltzel at InfoWorld explains:

“Emerging platforms, in particular around the cloud, have many organizations shifting their staffing models toward project-based, contingent work in hopes of landing the key skills necessary for their businesses to stay competitive in a constantly evolving technical landscape.”

Easily scaling your workforce up or down

One of the biggest advantages of contingent staffing is the ability to use it in whatever ways best suit your business needs. Contract hires can be project-based, short-term, or long-term. You can bring on an individual with a specific skill that’s missing from your current staff, or a whole, productive team ready to tackle your extra projects. If your situation changes, it’s just as easy to end the contract—with none of the drama associated with fires or layoffs. All without the expenses or corporate red tape surrounding traditional hires.

Plus, many contractors are independent and self-sufficient by definition. They work with their own equipment, are used to being flexible to meet clients’ needs, and don’t need to go into an office to get work done. They can assist your business from any location, so you can take on new staff without worrying about making room for them, providing new equipment, or paying transportation or relocation costs.

“Technology has accelerated this way of working,” Greg Zaino, CEO of MBO Partners, told SkilledUp. “When you have mobility and social collaboration and everything in the cloud, work is now more digital. Geography becomes less of an issue.”

Enabling organizational flexibility

Tapping into the contingent workforce also offers more wide-ranging flexibility than just the ability to quickly and easily adjust the size of your staff. It can also boost organizational agility, improving your capacity to handle unexpected circumstances, adapt to changes, and stay competitive.

For example, if contractors are located across multiple timezones, it becomes much easier to provide extended support hours to customers or work around the clock to meet a tight deadline.

“If companies can get work done without creating a full-time position, they are more inclined to do that today,” Zaino added, “just to stay more flexible and agile and keep their fixed cost structure to a minimum.”

Attracting talent

Among job-seekers, the demand for and interest in flexible work arrangements is on the rise. According to the Indeed Hiring Lab, interest in flexible work increased by more than 40% between 2013 and 2015 (across 12 countries, based on data collected from Indeed’s job search engine).

Perhaps even more significantly, members of the biggest workforce demographic (Millennials, generally defined as those in their late teens to early 20s through mid-30s) have made their preference for flexibility and independence in their careers clear. Furthermore, according to “America’s Independents: A Rising Economic Force,” a 2016 report on independent workers in the U.S., Millennials also make up nearly the majority (40%) of all contingent workers.

So don’t be surprised if many of the most qualified candidates are doing consulting, freelancing, or other types of independent work—whether full-time or on the side. If you offer the kind of flexible positions that this type of talent is looking for, then you’ll gain an advantage in the tech industry’s fiercely competitive hiring landscape.

Sourcing Tech Talent with Crossover

Here at Crossover, we know a thing or two about what it’s like to hire and manage contractors. After all, we work with more than 1,800 partners spread across nearly 100 countries. This allows us to connect companies with tech talent that’s truly the best in the world.

Interested in a behind-the-scenes tour of how we do it?

Join us on The Crossover Journey.