Contract work fuels rise in tech job postings

No surprise: Companies are relying on contractors in increasing numbers. But optimists point out that could be a harbinger of an improving tech employment picture.

Correction, 12:11 p.m. PST: This story inadvertently gave an incorrect number for the tech job postings at Dice.com in February 2008. The actual number for that month was 94,423. The percentages that stem from that number also have been corrected.

Jobs posted on technology jobs site Dice.com rose 3.1 percent in February, its first sequential increase since late last summer, just before the economy started to really turn sour in September.

Tech job listings rose to 57,337 as of February 2, up from 55,609 in January, according to the company's monthly report released Wednesday. But if you're looking for full-time work with health benefits, you may not find the new data to be especially good news: Helping to drive that modest increase was a 7.3 percent gain in the number of contractor positions, which climbed to 23,955 listings as of February 2, from 22,333 a month earlier, according to the report.

"In uncertain times, companies are looking for flexibility in their payrolls to continue with critical projects," said Tom Silver, chief marketing officer for Dice Holdings, which operates Dice.com. Those critical projects often involve improvements to a company's infrastructure and can offer near-term benefits, he added.

Job postings at Dice.com
Click chart to get a larger image. Dice.com

Last February, there were 94,423 positions posted on Dice.com, of which 39.1 percent were for contractors. But this year, as the number of February job postings fell 39.3 percent year over year, contractor positions accounted for 41.8 percent of the job postings.

"For the last year or so, contractor jobs have accounted for 38 to 40 percent of the positions, but I expect that increase," Silver said. He noted he wouldn't be surprised if the percentage for contractor job postings eventually reached to 50 percent later this year.

There was a similar trend after the Internet bubble burst in early 2000, when the number tech jobs overall shrank but the slice of contractor positions soared to roughly half of all job postings on Dice by mid-2003.

In the past, contractor jobs have also served as a leading indicator to the overall labor market, said Amar Mann, a regional economist at the Bureau of Labor Statistics.

"In previous slowdowns, the first workers who were cut were temporary workers or contractors," Mann said. "They are cut anywhere from three to 12 months ahead of a slowdown, and this could be seen as a leading indicator to job losses."

On the positive side, the figures can also indicate when permanent jobs may begin to pick up, Mann added. When the dot-com bust hit in 2001, for example, the number of contractor positions began to shrink. They began to pick up steam in the following year and posted year-over year growth in July 2003. Then four months later, the overall economy began to improve and job growth began in November. That followed a similar pattern in the 1991 recession, Mann said, pointing to a rise in the number of temporary and contract workers in January 1992, with job growth following three months later, Mann noted.

Help wanted: Techies with Android skills
Temporary-placement agency Manpower, meanwhile, finds some tech positions are still in demand, particularly for people skilled in mobile technologies. The problem is a surprisingly thin talent pool for those jobs. Adam Shandrow, area manager for Manpower, said there's a shortage in finding tech workers who are familiar with Google's Android smartphone platform and applications that can run on it.

"We still see a slight demand for high-tech engineering jobs, but the timing of placing candidates in those jobs is now very different," Shandow added. "Before, we could fill a job in three to four weeks, now it takes five to six weeks. And for a permanent position, it used to take a month to fill a high-tech job and now it takes almost two months."

Employers are also issuing a more extensive wish list in what they seek in a high-tech contractor, Shandrow added. In the past, a prospective employer would seek three or four primary skill sets when submitting an order to hire a contractor. Now employers want additional skills for the same level of pay, as well as stipulations relating to the length of the contract, number of hours to be worked and money to be paid, he said.

Although the overall unemployment rate reached 7.6 percent in January and for tech, the rate climbed to 4.8 percent, there are still opportunities for tech employment.

"Overall, tech is still an attractive place to be, even though the number of job listings are down roughly 40 percent," because there are still over 57,000 positions that need to be filled, Silver said.

 

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