Physical Location Fades as a Factor with Rise of Contracting, Online Work

Susan Hall
Slide Show

Work Force Challenges in 2011

Despite the improving economy, we'll continue to struggle with difficult work force challenges in 2011.

While many companies used contract workers during the uncertainty of the economic downturn and many workers took those jobs, most of us still consider a permanent full-time job the best situation. My colleague Ann All in a post in October asked "Are Temporary Jobs the New IT Employment?" and I think a lot of folks were thinking, "Gee, I hope not!"


Beyond our personal financial stability, we tend to view companies making permanent hires as a sign that the economic trepidation is waning. I saw the reported uptick in permanent hiring as good news when I interviewed Bob Miano of job consultancy Harvey Nash.


But analyst firm Foote Partners' namesake and CEO David Foote, noting that much of the gain in IT jobs for November was due to consultants, contractors and managed services, said:

... it's clear that the demand for full-time workers outside the services sector in particular has not gained the kind of momentum that many analysts and pundits had been predicting this year.

And he doesn't see it as a short-term trend:

... It's part of a systemic transformation of the IT service delivery models. Market volatility in skills and jobs will be the new standard in market behavior for years to come in our opinion.

Brian Mennecke, a management information systems professor at Iowa State University, agrees, predicting that technology will further enable the rise of contracting because physical location no longer poses a constraint. The Kansas City Star quotes him saying:

Spot markets for labor will be more common because the type of work people do now is often very fluid. Companies need the right labor at the right time.

In a university press release, he adds:

An organization can now go out and relatively easily find the best people in short order and contract their services regardless of their location. So if a firm in Iowa needs a contractor who is a world-class Python programmer, that firm can seek out the programmer quickly and integrate him or her into the organization as a virtual team member.

The online marketplace oDesk concurs about the move to online work, though it obviously has a stake in this game. Among its 2011 job predictions, which don't differentiate between full-time and part-time work:


  • Online work will continue to double year-over-year, while local employment will not rebound to pre-recession levels.
  • In the next year, more than 500,000 employers will tap cloud-based work forces for the first time, including 25 percent of the Fortune 500.
  • The number of people looking to online work as the primary or sole source of their income will double over 2011.
  • Hiring of online workers by non-U.S. companies will explode in 2011. Proportionally, U.S. spending in this area will grow more slowly next year, and will represent 65 percent of the total spent on online work.


According to research by The Human Capital Institute, contract workers make up one-third of the U.S. work force and the pool of these workers is growing at more than twice the rate of the full-time work force


And in a recent CareerBuilder survey of 2011 job trends, 34 percent of hiring managers reported they will hire contract or temporary workers to supplement leaner staffs in 2011, up from 30 percent last year and 28 percent in 2009. Nearly a quarter (24 percent) expect to add more than last year.


But many companies use contract hires as a way to "audition" workers for permanent positions and for many workers, these jobs are a good way to get their foot in the door.

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