The trend: commoditisation of I.T. and falling rates

[SussexSeagull]

I'm currently on the same rate I started on in 1996, which is a little disconcerting...

I think the OP has been reading my blogs over the years but he's missed a point. If there are no entry level roles, where are the middle managers and PMs coming from in five year's time? That's the real price we're paying.

This is the bigger problem. I don't think there is any new blood coming into the industry, which in the short to mid term means less sharks in the tank but makes things unsustainable long term.

However it should be noted that a lot of industries haven't had much wage growth in the last few years, even before 08, but it was somewhat masked by relatively low inflation.

I personally think in 20 years the mass IT industry will go the same way as the coal and shipmaking industries, i.e. being done cheaper abroad. Sadly as it is white collar and mainly non union based, it will be with a whimper, not a bang.

I need a drink.

[Jeebo72]

Good article.

For what it's worth though, I'm on the highest rate I've been on in 12 years, but as a whole I think you're correct...

There's the problem, I've seen no hit. Also, there has been a massive import of cheap labour, but quick frankly it's poor quality. And for me has lead to more work "doing it right". If you're good at your job then there's been no down side. However, the crap contactors that have been doing the rounds for the last 5 years are out of a job. No bad thing.

[Jeebo72]

It's a good article but goes against my experience over the last 2-3 years in that clients I have worked for have consistently found it difficult to hire high calibre people (contract and permanent). My rate has actually increased over the last 2-3 years. I think it may come down to specific skill areas/sectors. My opinion is this current situation as described in the article will sort the "wheat from the chaff" and high calibre IT professionals will always be in demand.

Defo my experience too. The guys who are out of a job are the guys who've been chancing it for years ...

[Spacecadet]

There's the problem, I've seen no hit. Also, there has been a massive import of cheap labour, but quick frankly it's poor quality. And for me has lead to more work "doing it right". If you're good at your job then there's been no down side. However, the crap contactors that have been doing the rounds for the last 5 years are out of a job. No bad thing.

WHS

Back to the OP

The rates and ease of switch jobs back in 2000 were unsustainable, at some point there was going to be a massive downward pressure as clients demand more value and certainty for forking out for a contractor, and from other competition.

[doesNotCompute]

This is the bigger problem. I don't think there is any new blood coming into the industry, which in the short to mid term means less sharks in the tank but makes things unsustainable long term.

However it should be noted that a lot of industries haven't had much wage growth in the last few years, even before 08, but it was somewhat masked by relatively low inflation.

I personally think in 20 years the mass IT industry will go the same way as the coal and shipmaking industries, i.e. being done cheaper abroad. Sadly as it is white collar and mainly non union based, it will be with a whimper, not a bang.

I need a drink.

Would you advise a young whippersnapper (late 20's / early 30's) thinking of contracting to jump now? In all honsetly, don't think I would if (s)he wasn't pushed from their comfortable permie role.

N.B. speaking from a WAS/J2EE skillset point of view.

[ronanm]

Agree with all you say. Made the same pitch to a contractor mate of mine about 5 years ago. His, rather excellent reply, was: "Have you seen how badly most other industries/jobs pay?"

He was right, of course.

In the last 5 years I've certainly not re-lived the boom days of 2000. But... I'd say even including a 7.5 month stint out of work in 2009, I've still banked £500k+ in the last five years. I'd imagine most other decent, experienced contractors have achieved exactly the same, if not more.

Now ask yourself, where else are you going to earn that kind of cash as easily and risk-free as we do?

For me, the 2 year re-train isn't a problem. And if I can cling on for another 5 years I'm done, retired.

Just my two cents amongst all the doom-and-gloom.

Wow - Just makes me more depressed - what rate are you on?!!

[nomadd]

Defo my experience too. The guys who are out of a job are the guys who've been chancing it for years ...

Funny thing, actually...

Yesterday one of the Directors of the IB I work for was asking for a "guru" to sit on a new Technical Design Board. He was insisting on someone very, very senior, min VP-level with xxx years min experience, yada, yada.

My manager replied by email with my name and a finishing line of "Sorry, but at that level of experience and expertise I only have contractors."

[SueEllen]

Would you advise a young whippersnapper (late 20's / early 30's) thinking of contracting to jump now? In all honsetly, don't think I would if (s)he wasn't pushed from their comfortable permie role.

N.B. speaking from a WAS/J2EE skillset point of view.

I would tell them to get into a more people focused skilled area first.

Straight technical areas can be outsourced to people overseas, but talking to people in a way they understand can't.

[Hot Mess]

As stated, there's just an abundant supply of mediocre 'contractors' who just don't have sufficient skills or experience to compete for a diminishing pool of opportunities. Contracting is not an entitlement.

If you go contracting you need to be able to offer a lot more than 'I am available immediately' and I have 5/10 years generic expertise, blah, blah, blah. You need to do something, whatever it is, very well and know how to rescue projects mired in the tulip, without asking loads of dumb (i have no idea what I'm doing) questions.

Bob's, under-resourced permie's (there are growing numbers of these) or even graduates will pick up the slack unless you can prove that you are worth the premium.

[Scotgal]

As stated, there's just an abundant supply of mediocre 'contractors' who just don't have sufficient skills or experience to compete for a diminishing pool of opportunities. Contracting is not an entitlement.

If you go contracting you need to be able to offer a lot more than 'I am available immediately' and I have 5/10 years generic expertise, blah, blah, blah. You need to do something, whatever it is, very well and know how to rescue projects mired in the tulip, without asking loads of dumb (i have no idea what I'm doing) questions.

Bob's, under-resourced permie's (there are growing numbers of these) or even graduates will pick up the slack unless you can prove that you are worth the premium.

I have to agree with this, I have worked with a few contractors who have n years in x and y skills, but they offer no more than that. When I hire I look for people who will give me a value add, something extra for the huge rates contractors expect. Gone are the days when you can come in and silently code away just doing the work assigned and no more.