The Traditional IT Hiring Model Is Dying
By Jay McVinney
When the dotcom bubble burst in the early part of the decade, a startling trend was begun in the Information Technology industry.
Companies that traditionally focused their staffing efforts on finding and hiring full time employees are shifting that focus to hiring contract resources on a project by project basis.
For companies, the continual drive to reduce costs related to the IT functions of the company is resulting in migration to the “on demand” model.
Given this trend, there are many shifts necessary in traditional thinking for IT people to be successful.
Workers in the IT industry need to understand the effects of this shift in corporate hiring practices. The days of going to work from 9-5 at a company for 20 years and retiring with benefits are long gone.
This requires the IT professional to consider such factors as providing for their own retirement, insurance, personal brand marketing and flexibility in their requirements for IT contracts.
Regardless of the decision by the Supreme Court regarding the individual mandate portion of “The Affordable Health Care Act”, businesses in the US are already positioning themselves to reduce insurance benefits offered to employees.
As the average contract term continues to shorten, people will need to learn to market themselves to companies. Success in Personal Brand Marketing is already a key indicator for personal success in the IT market and will only grow more important as the trend continues to develop.
Likewise, the duration of individual engagements with a company are forcing a longer term view for contract resources. Rather than the standard 12 month contract that was the norm in 2000, today it is not unusual to see an individual engagement lasting days or even hours.
For the traditional contractor, this trend requires a fundamental change in thinking. The person must be prepared to accept shorter duration contracts and rely on their ability to provide service that will cause the company to re-engage them.
For companies, the continual drive to reduce costs related to IT functions will necessarily result in migration to the demand model. In other words, rather than hiring an employee or a long term contractor, companies will look to maximize value for their IT dollar by streamlining their use of IT resources and eliminating waste in the form of costs associated with an IT professional’s idle time.
Often one of the biggest inefficiencies within IT is the time spent by employees or long term contract resources while they wait for project dependencies to be completed by other people.
The Demand model is here to stay and is a natural extension of the current cloud model. Companies all over the world are realizing the benefits of reducing their hardware and software costs by moving to the Cloud.
Staffing is the largest cost in any IT budget followed closely by Outside Services (contractors). IT leadership is recognizing that the same benefits provided by hardware and software Cloud vendors are available to them in the staffing arena.
As the number of providers of demand services increases, more companies are going to take advantage of the ability of these resources to provide real cost relief in basic tasks such as maintaining IT assets. As competition continues to increase, it will drive pricing down, resulting in a continuing cycle of reduced cost to the business.
Today, businesses are positioning themselves to take advantage of the services provided by companies offering specialized on-demand services.
Likewise, providers are beginning to offer services designed to minimize the costs to their customers.According to Doug Berg, a workforce expert with Real Street Staffing “Companies that were 90 percent permanent workers and 10 percent contingent staffing are now closer to 60 percent full-time employees and 40 percent contract labor.” –
( http://realstreetstaffing.com/blog/2011/07/the-changing-status-of-employment/ ). Managed Services, the outsourcing of daily maintenance activities, is at an all-time high. According to a recent report by In-Stat ( http://www.in-stat.com ), the Managed Services industry is predicted to double in size from $8B in 2008 to $16B in 2012 providing further evidence that the trend will continue.
The natural evolution of Cloud concepts fueled by the current recession are resulting in a major change in thinking from traditional hiring and staffing practices to demand services from qualified providers.
About the author:
Jay is a successful technology executive with more than 20 years in Information Technology and has been working with Microsoft SQL Server since version 4.21 in 1993. With a record of exceeding expectations he has been privileged to help companies of all sizes and industries to increase the productivity and innovation of their IT function through appropriate leveraging of database assets. Currently he is leading a team of SQL Server Consultants as the CEO of DBA in a Box, Inc. http://www.dba-in-a-box.com Jay also proudly serves in the Alabama National Guard.
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