To be successful, IT contractors have to conquer all sorts of challenges.
by Don Willmott | August 2007
Are IT contractors treated unfairly? Ask around and you'll hear all sorts of horror stories about job listings that range from the misleading to the downright phony, broken deals and on-the-job ostracism. Is this any way to make a living?
If you haven't worked as a independent contractor, it's important to understand the dynamics of the labor market and how it can work against you - unless you're smart enough to turn it to your own advantage. Anyone who's worked with a recruiter has learned hard lessons about the laws of supply and demand. You're in a large group of eager workers caught between the proverbial rock (employers who want to get you at the lowest possible rate) and hard place (recruiters who make their money by taking as big a slice of your deal as they can).
To get through this maze, you'll need some strategies.
Watch Out for Bogus Ads
After 20 years working in the San Diego IT arena, Brian David Smith, a software engineer and Ph.D. candidate, is an expert in the labor dynamics of cities with large pools of independent contract workers. "Have you ever noticed that some recruiters post the exact same ads every week?" he asks. "Sometimes those jobs aren't real. Recruiters need to keep their databases full, so they'll dangle opportunities to get you to come in and interview, even though the advertised job doesn't really exist."
The solution? Check your favorite newspaper or online job boards on a regular basis. You'll find such ads are easy to spot.
Lock Down the Pay Rate
When real job offers do exist, Smith says, the per-hour pay rate can drop as the hiring procedure moves along. Squawk too much about that and you'll be shown the door. There are other people out there who will take the gig at the lower rate. So try to lock in the rate early and tread cautiously. "It's simple," Smith says. "The agency has a deal to fill the job for a fixed fee, so if they fill it with a lower-cost worker, they'll make more profit."
Get It in Writing
Smith is an advocate of clear and irrefutable written contracts whether you get hired directly by an employer or by a recruiter. He's found success by negotiating not only an hourly wage, but also a cap on the employer's total outlay and overall benchmarks for the project he'll be working on. That's important, he says, otherwise the project's actual end point may not be clear.
Beware the Non-Compete Agreement
It's fair for recruiters to ask for a non-compete agreement, so the company you'll work for doesn't hire you down the road and cut them out of future business. Such agreements usually last for six months to a year. However, sometimes you might not find out about an exceedingly stringent non-compete until you show up for work. The theory is that no matter how tough and restrictive it is, you won't want to walk away at that point - and so you'll sign. The moral: Always ask about any non-competes up front.
Learn to Live with Ostracism
Smith knows first-hand what it feels like to arrive at an office and face resentment from full-time workers. "I know what they're thinking," he says. "Why are the bosses bringing someone in? Aren't we doing the work? Is he here to take my job?"
Smith has learned to work around such reactions. His strategy: "I never tell anybody to do anything. I just ask a lot of questions and draw out information. In fact, when I see the problem and know the fix, I keep asking questions until the full-timers discover the problem and the fix for themselves." By doing this, Smith positions himself as a friendly advisor as opposed to a pushy interloper.
Get Organized
Because recruiters act as traditional middlemen - who add cost to the employment transaction - it's interesting to wonder if the Internet could remove them from the equation. This has been the case in many other industries, where online communication has connected buyers and sellers more directly. To a certain extent, it already happens with job sites (like Dice), but Smith wonders if some sort of online clearinghouse of IT contracts, set up and maintained by large IT employers, would ultimately be useful.
Sara Horowitz, founder of Freelancers Union, says that 40 percent of her members are in tech careers, and the biggest benefit they see - other than health insurance, which the union offers in 30 states - is the network of people who can share employment information. Like Smith, she believes "the Internet is enabling people on both sides of the equation to find each other at lower cost." In the future, she thinks, recruiters will lose interest in lower-end tech workers to focus instead on high-value, highly skilled positions, where the most vetting is needed.
If that's the case, then it's likely there will continue to be recruiters in your future. So be sure to strategize for success.