Which Type of Tech Consultant or Contractor Are You?

Posted on March 12, 2014. Filed under: Consulting/Contracting, Job Market Trends, Work Issues |

IT consulting

It seems like everyone I speak with lately about the field of “IT” and “tech” seems to be talking about the rise in consulting/contracting. I hear stats that say up to half of our IT/tech workforce will have an independent contractor status within the next 10 years or sooner. Yes, half…Some say even higher.

Contracting is near and dear to me. My wife has been a contractor for the last 15 years in the publishing industry, and I have done consulting for various firms as part of my career services work. Whether you are brought in to consult or to participate in some portion of a project’s development, if you have an independent contractor status, this is self-employment, and self-employment is fluid. And the fact that “contracting” is not a fixed thing is what can make it so attractive. But its very fluidity is what can also make it tough, especially if you lose sight of the entrepreneurial side.

If running your own business were easy, let’s face it, most people would do it.  

But it’s not, and the fact that some people are expecting half or more of our IT/tech workforce to become independent contractors is not necessarily a good thing in some cases.

For one thing, when I speak with working professionals who have taken on consulting/contract roles, there is a wide-ranging view of just what an IT or tech “contractor” is or should be (or why they became one in the first place). Let’s take a look at the different types of I typically come across and some of the pros/cons their style of contracting brings:  


The Lone Ranger

Meet Jeff. Jeff has been successfully running an IT consulting business for the last 10 years. The business consists entirely of Jeff using his vast network of Silicon Valley contacts to keep him moving from one engagement to another. Although he has done well, he never expected the amount of business development he would have to be doing on a constant basis. He likes consulting, but after 10 years, he feels isolated and a little tired of always having to be one step ahead.  

Pros: Jeff has a lot of flexibility and has had a relatively easy time balancing work/life situations. He has amassed a sizable network in a hotspot tech area, thanks to all the people he meets across his engagements.  

Cons: Jeff misses out on working like a team. When he goes into a new contract, he has to bond quickly with the permanent staff, and he often does not get to see a project all the way through to the end. Sometimes contracts end abruptly for various reasons, like budget cuts, etc.  

Remedies: Jeff could grow his business to build his own team environment (like Grace did below) and spread his subcontractors across several contracts at once. This way when he loses one, he still has others to fall back on.  


The Full-Timer in Disguise

Then there’s Gina. Gina is considered an independent contractor for a large engineering company in her area. She used to work for the company, but after some downsizing, they brought her and a few other people back on as contractors. That was 3 years ago. Gina has no other clients or contracts; she works 40 hours a week, in-house for this company.

Pros: Gina doesn’t have to spend time on business development or put much into marketing her “business” like Jeff does because she has a steady client. She might not get the benefits she used to, but she does get a better hourly rate and she has a steady paycheck.  

Cons: Gina has placed all her eggs in one basket. This company has laid her off once as an employee; it would be even easier for her to be let go as a contractor, and Gina has not expanded her skill set in contracting beyond this one engagement. Gina doesn’t really consider herself a contractor.  

Remedies: Gina could look into reducing her time with the company and into taking on some smaller contracts to help diversify her revenue stream. OR she could seek full-time employment elsewhere, if possible.  


The “Until Something Better Comes Along” Contractor

Now we have Joseph. Joseph had to leave his job 6 months ago because his wife’s company relocated the family from Colorado to Arizona. After looking around for a bit and not landing anything permanent, he quickly decided to take on some short-term contracts. He doesn’t really like it and would prefer to work in-house somewhere, but he needs the money.  

Pros: Joseph is keeping his skills marketable and getting a chance to showcase his abilities on a contract basis. He is avoiding the dreaded employment gap on the resume.  

Cons: Joseph has to choose between his commitment to contract work and conducting an effective job search. If he wants to be taken seriously as a contractor, then he needs to put his attention into it. But that can jeopardize his efforts to find full-time employment.  

Remedies: Joseph needs to be careful not to let his contract work take up too much of his time unless he plans to remain one for a while. At some point, he may need to embrace contracting as a more permanent option or quit it altogether.  


The Consultant Who Isn’t Really a Contractor

So then there’s George. George tells everyone he is an “IT contractor,” but really George works for a company that does IT consulting. So he is contracted out but is still a full-time employee for XYZ company who sends him out to clients for various engagements.  

Pros: George is a consultant without being an independent contractor, working at a client site, while reaping the benefits of a full-time employee. George doesn’t have to worry about self-employment tax or handling business development pressure.  

Cons: George is not actually a contractor. He still works for someone else, and his career sinks or swims with that of the firm.  

Remedies: In all fairness to George, if he’s happy with his current arrangement, he doesn’t need to do anything. But if he really wants to be a contractor, then he needs to be one. 🙂  


The Contractor of Contractors

Last but not least we have Grace. Grace sees her company as a company. She started out on her own but has now expanded, hiring a few subcontractors to assist her with larger engagements as well as support staff. Grace is setting a strategic vision for her company and has a 5- and 10-year plan. Grace wants to add more staff and subcontractors as time goes by.  

Pros: Grace has put all the pieces in place of having an established business that can take the ups and downs that come with market fluctuations (a very important part of longevity in contracting!).

Cons: Grace isn’t much of a consultant anymore; she’s an executive. As her business grows, she gets further away from the consulting work itself.  

Remedies: If Grace wants to be CEO of a thriving business, then there isn’t much to fix here. But if Grace is feeling like she is cut off from the work she loves, then she may have to look at hiring management to free herself up to get her hands dirty at least sometimes.


So What Does “Consulting” or “Contracting” Mean to You?

As we move forward into the age of increased IT/tech consulting/contracting, you may find yourself asking this question. And it is prudent to know how to answer it before you jump into the self-employment waters. How much risk are you willing to take? What do you know about business development? Do you need a team environment to thrive? Are you “too corporate” to take on the entrepreneurial vibe? (It’s OK if you are, by the way.)

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