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The lack of future of employment

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InfoWorld published “The IT Rust Belt” back in 2002. My conclusion back then: IT jobs are headed overseas (and, with luck and some entrepreneurship, small-town America as well). Not all of them, of course, but too many for IT to be a promising career choice for your average college student.

It was, at the time, a minority opinion. It’s now gaining popularity (for one example among many, read “Why IT Jobs Are Never Coming Back,” (by Stephanie Overby in Computerworld, 12/9/2010).

Summing up from the last two weeks, here’s where we are:

Increasingly, corporations, and especially large corporations, consider employment to be an aggravating distraction (“The Semiotic Diet,KJR, 11/29/2010). Compared to contractors they need a lot more time and attention … and there are all of those rules governing what you can and can’t do to them.

Even if that isn’t the case, employees are infrastructure. Having them increases fixed costs while decreasing incremental costs. Investments in infrastructure are the right answer in a steadily growing economy. When the economic outlook is unpredictable … and ours is structured for increasing volatility … infrastructure means cost that’s hard to shed during a downturn, making contractors more desirable than employees (“The future of work,KJR 12/6/2010).

Which leads to the question, how will you, as a U.S. citizen with IT skills, make a living when the future gets here?

The conclusion is hard to avoid: You’ll have the most security by abandoning the security of a steady paycheck for the feast-or-famine world of contracting.

Easy to say. Harder to do. Here are a few pointers to either help you with the transition (if you’re accustomed to steady employment) or to reorient yourself (if you’re in college, preparing to enter the workforce):

  • You’re running a business. Be businesslike about it. Every conversation with your clients is about what they need. The only conversations about what you need are about what you need to help them succeed.
  • Think strategically about your business. Some companies compete on product … what they can do. Some compete on relationships … how well they understand their customers and can work with them effectively. Some compete on price. Decide in advance which model fits you best and plan accordingly.
  • Learn to read contracts for comprehension: Mostly, this requires patience. Skimming doesn’t do the job.
  • Hone your negotiating skills. And be businesslike about your negotiations. Emotion has no place in a negotiation, unless you want to lose.
  • Budget: Make assumptions about how many days a year you expect to be billable, and about the average rate you plan to charge. Plan your lifestyle accordingly.
  • Live healthy. You’ll be paying for your own health insurance, and a lot more of your medical expenses. Fried pork rinds aren’t your friend.
  • Find a home. For at least your first few engagements, work through a reputable staff augmentation firm. Even if you’re good at selling, this will help you learn the trade. And don’t gripe about the tithe they charge in exchange for placing you.
  • Be adaptable. Every company has a business culture, corporate style, and unwritten rules. Become excellent at learning them quickly and working within their framework.
  • Keep your skills current. Technical skills are temporary. Books aren’t enough: If, for example, you’re a developer, invest in the development environment you’ll need next so you can give yourself hands-on experience.
  • Spend time on Facebook. No, not to network, but to gain skill working within virtual communities. A lot of your work will be as a member of virtual teams that never congregate physically. Even in virtual teams the need for trust-based relationships matters.
  • Web conference with compatriots. More on the same subject: A number of web conferencing companies provide a free version of their services for consumer use. Take advantage of this to perfect your ability to work in virtual teams.
  • Pay more attention to making friends. People with jobs tend to satisfy a lot of their need for community in the office with co-workers. As a contractor your work connections will be temporary. You’ll need a substitute, or you’ll feel very lonely no matter how financially successful you are.

The United States has always had two economies — capital and labor. For most of our history the two were strongly coupled: Their fortunes rose and fell together. With globalization that’s no longer the case.

Its proponents continue to claim net on-shore benefits from shipping work offshore. For investors, they’re probably right. For employment, and for the U.S. economy as a whole, for that matter, they don’t even have a reason to care.

You do understand what “multinational” means, don’t you?

Comments (10)

  • I can’t say that it was unseen. It was during the Reagan years that personnel stopped being an asset and became a liability.

    There will come a time when it’s obvious that you can’t keep paying your labor the smaller and smaller amounts, and keeping that excess for your own compensation without it affecting that compensation drastically to the downside.

    People aren’t cogs. That wasn’t true when we had a manufacturing economy, and it isn’t true even with our data information economy.

  • Bravo! I would make one small amendment – Bob said: “Spend time on Facebook … Even in virtual teams the need for trust-based relationships matters.” I would say: “especially in virtual teams the need for trust-based relationships matters.”

  • After almost 40 years in IT (mainframe sys prog most of those years) I’m preparing for the future by retiring in four years or sooner if my current employer rips me loose before I reach 66. I don’t think that will happen. It’s not easy finding seasoned mainframers and our mainframe ain’t going away, contrary to what many pundits think.

    I remember back in the 1970s (when one could almost bank on a 10% salary increase each year) that getting a degree in the computer sciences allowed you to write your own ticket.

    Unfortunately, my two 30-ish sons took that advice. Now they cling tenaciously to their lousy IT jobs and lousy salaries. One of them is seriously thinking of ditching IT and trying something else that doesn’t make him not want to get out of bed in the morning.

  • Bryan Price said: On 12/13/2010 at 8:42 pm

    “I can’t say that it was unseen. It was during the Reagan years that personnel stopped being an asset and became a liability.”

    Oh, Ronald Reagan. We have this genius to thank for our current state of affairs.

    I never understood how exchanging our manufacturing economy for a service-oriented economy was going to be a ‘good thing’. Supply Side Economics was another Reagan ‘gift’ that seems to keep on giving. Oh, and don’t even get me started on the magic of outsourcing jobs overseas.

    “Thank you Ron Reagan” (an old slogan that used to run on TV).

  • Seriously, Reagan bashing?? The people who really felt the pinch during the Reagan years were the middle managers.

    Sure, manufacturing continued its decline, but I would put the blame on the decline of American manufacturing further back even than Reagan. Nixon opened up trade with China, which is what really put us in an uncompetitive spot for manufacturing jobs.

    But then again, this article is about IT jobs, and it jobs are NOT manufacturing jobs.

    It really seems more like the country is focused on eliminating all jobs that aren’t health care, law, or finance. Which as Bob is noting here and has mentioned before, isn’t solid enough to survive in the long term.

    • Blame isn’t (or at least shouldn’t be) the issue. What happened, and what can we do about it? That’s the issue.

      Back in the 1970s, Japanese manufacturing became a force. The American economy began to suffer, and American manufacturing businesses tried to figure out how to cope with the problem. Their solutions were: Negotiate harder with the unions, automate, and send manufacturing to China.

      None of which helped the U.S. economy. The Reagan administration’s contribution was (in my assessment at least) to tell everyone the problem wasn’t actually a problem … it was an opportunity! We’d make our money in finance and services and everything would be groovy.

      It might have even been a workable idea. Like it or hate it, no idea is so good that you can’t drive it right off a cliff by carrying it to extremes.

  • I can’t argue with your assessment…we’ve seen it in customer service call centers/help desk, Drafting, Design and other front line knowledge workers. Could you share your thoughts on how others up the food chain (front line supervisors, middle managers, etc) should prepare to cope/coexist/flourish given these changes? Get training and experience in developing and managing and leading these virtual teams…and…?

  • Bob – let me say I think you’re right on this one. The trends aren’t good and there is nothing that foreshadows recovery to a job-based economy.

    Adding credibility to your argument was the IBM HR exec who leaked to the trade press that IBM was heading toward a contractor bidding for jobs model of staffing.

    I’m currently making a very good living cleaning up messes that global resources cause. The fact is ours do a horrible job and have great difficulty doing simple tasks much less complex ones. It is like following the elephants in the circus parade. With 100% turnover per year, this will not get any better.

    Regardless, our C-level execs choose to see nothing but the savings, while ignoring the downtime, lost data and other failures that cost dearly.

    I’ve steered myself into unique skills of high value that don’t exist elsewhere which has and continues to buy time. At my age, that’s an OK strategy, but it needs a backup.

    The backup strategy is positioning myself to be able to do contract work, in case the first strategy doesn’t buy enough time. I’ve been helping my son start his business and he’ll be able to help with the legal side of setting up mine.

    I suppose since we should think of ourselves as a business (or a brand), each of us should have been doing a personal SWOT analysis along the way in preparation for the coming contractor-based economy. If not, it’s not too late to do one and take action accordingly.

  • I’ve been following Bob’s writings for many years and he is usually on target. I am in the process of putting together a business plan for going out on my own to do consulting to small and medium size businesses. I have not recommended to anyone lately to get into the IT field unless they plan to work for consulting firms such as Acenture, Deloitte or IBM. Otherwise, my feelings are that the IT departments for most companies will be under continual pressure to reduce costs and to me that does not sound like a promising field of employment.

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