Tech Talent Crunch Benefits Consultants

Tech professionals with specialized skills know they’re in demand, especially in hot markets such as the Bay Area and New York City. But how are employers dealing with that pressure for talent? One word: consultants.

“Increasingly, IT departments find this is the best approach for handling short-term and specialized initiatives such as cloud migrations and cybersecurity projects,” read a new report (PDF) from analyst firm Robert Half. “This trend plays out among companies of all sizes, but small and midsize firms, in particular, often prefer to engage project IT talent because it is impractical for them to make full-time tech hires when their need may turn out not to be ongoing.”

For many firms, hiring consultants and contractors may save money in the long run. Senior-level tech pros are not only expensive, but often demand high-level benefits such as equity. Hiring on a project-by-project basis also gives companies a lot of resource and scheduling flexibility.

According to the most recent Dice Salary Survey, consultants pulled down an average annual salary of $114,473, with an average base rate per hour of $69.05. (That surpasses full-time tech professionals, who earned an average of $91,067.) Compare that to 2012, when the average base rate stood at $63.61 per hour, and it’s clear that consultants as a whole have done rather well over the past few years.

But as a group, consultants also have some disadvantages vis-à-vis regular employees. Unlike full-time employees, they often don’t have an employer willing to pay for their certifications; and while they might have the flexible schedule that comes with being able to choose clients, there aren’t many opportunities to climb a corporate ladder.

For those who consult, though, the money and flexibility might prove worth those drawbacks. With the right mix of certifications and experience, they can certainly rake in the big bucks in certain markets.

Comments

9 Responses to “Tech Talent Crunch Benefits Consultants”

September 08, 2017 at 11:04 am, Red White and Blue said:

Tech talent crunch? There is plenty of cheap labor in India, and companies lay off their American staff to exploit this situation.

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September 14, 2017 at 9:27 am, Jj said:

Exactly, my position of nearly 3 years was outsourced to India why? Cheaper labor, now considering that verbiage is a factor in my prior position and most people I have spoken to in India speak broken English at best and miss adjectives and use broken sentences it doesn’t seem like a smart move but bonuses mean everything and the big paycheck seemingly is their only goal.

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September 14, 2017 at 11:06 am, Red White and Blue said:

Not only do we have a situation of H-1B visa holders dominating the tech jobs here, but a job-hunting friend tells me that all recruiters seem to be Indian these days also. When he checks their Linked In profiles, their locations are always in India. I guess they can charge less of a commission. An American recruiter might charge 3% of a $100K salary and make $3K, but if an Indian recruiter charges only 1% (and makes $1K), that saves the client money. We know that programmers in India make only 20% of what an American makes, so that means the cost of living is about 20% of what it is here. So that Indian recruiter making “only” $1K is making the equivalent of $5K here…not bad for a few hours’ work. Just remember folks: anything that can be done over the internet can be outsourced.

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September 14, 2017 at 11:19 am, Buy American said:

Yes, when the ad states things like “must be 30 years old or more older,” the recruiter is not a native speaker of English.

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September 14, 2017 at 2:42 pm, Dan said:

My favorite statements in emails are:

“I hope you are doing good.” Well, I always try and do “good” to my fellow humans and animals, but I don’t always do “WELL”.

“Please revert to me.” I don’t “revert” into anything, man or child. I “REPLY”.

If these people were mildly educated in American, rather than Indian English, it would be a step in the right direction.

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September 17, 2017 at 11:29 am, Chris said:

Actually I see the companies after companies to start reshoring the IT jobs. The outsourcing to India has been proved to be an expensive proposition, rather than a cost saving one as people thought it would be. On the other hand, some India consulting firms set up the operation in US and offer the on-site work to US clients. That is the trend. In this case, the consultant rate is retained, while the total business cost saving is achieved. As a consultant, you need to continuously invest in yourself. You will be left behind if you do not keep up with the cutting edge technologies and maintain the right mix of skill set. The employee, however, does not have much choice. They create value for their employer, while consultant creates value for themselves.

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September 14, 2017 at 8:07 am, Joe said:

Rubbish “article” Nick. If there was a “tech talent crunch”, especially in “hot” and grotesquely overpriced places like NYC and SillyCon Valley, there wouldn’t be a “need” for “consultants” (read H-1B slaves).

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September 14, 2017 at 8:12 am, yurakm said:

$114,473 before self-employment tax hardly “surpass” $91,067 with health insurance and other benefits.

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September 14, 2017 at 2:52 pm, dan said:

Very poor article, sorry to say.

* How the “salaries” were computed is not defined: Was it based on actual earnings or hourly rate multiplied by some arbitrary number of hours?
* Were benefits provided?
* Was the tax term W2 or other (1099, C2C)? If latter, how about accounting for employer contribution to FICA and SDI?
* Did it cover downtime due to gaps between contracts?
* Did the salaried employees receive bonuses, training, conference attendance, 401K, etc?

Very superficial analysis too.

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