Recession-Proofing Your Career as an IT Contractor
High-profile layoffs, particularly in the technology field, have been hitting headlines since the summer. Twitter, Meta, Amazon, and HP all contributed to the reported 9,587 U.S. job cuts in October, according to Bloomberg—which was followed by a slightly increased IT unemployment rate of 2.3% reported in November. However, LinkedIn CEO, Ryan Roslansky, told Bloomberg that this wave of layoffs was in reality “a great talent reshuffle.” While big-name companies have terminated many employment contracts, small and mid-sized businesses have been struggling with an ongoing IT talent shortage, and this appears to be a prime opportunity to recruit the workers they need.
Experts at Wired Magazine agree, adding Salesforce, Apple, Snap, and Lyft to the list of big tech companies condensing their payroll. Despite these layoffs, the demand for technical talent is still competitive across many other industries.
This bodes well for IT contractors who may be nervous about the outlook of their field against speculation of an impending recession. In fact, a recent BLS report announced an additional 11,800 temp jobs—a steady rate of growth month-over-month—as well as notable gains in technical services.
Labor market research firm Foote Partners LLC points out that 40% of those new IT jobs are in technical consulting services and computer system design. This indicates a trend of companies turning to consultants instead of full-time employees—a common practice in an economic downturn.
This data adds up to an optimistic outlook for IT professionals who are looking to recession-proof their career. Choosing contract-based IT work will ensure you have a wider range of opportunities even if a future recession impacts technology hiring.
Why the Demand for IT Talent Remains Strong
Traditionally, essential sectors such as healthcare, education, and government have maintained their demand for talent regardless of the economic situation. It has become clear, however, that IT deserves to be on that list of recession-proof fields.
Companies across every industry are heavily dependent on their digital infrastructure. Four years ago, the Wall Street Journal declared that “every company is now a tech company.” The pandemic only cemented this reality. The exponential increase in remote work required organizations to think more intentionally about cybersecurity, while simultaneously ecommerce sales experienced four years’ worth of growth in just 12 months. The overwhelming consensus is that digital transformation has accelerated at an unprecedented pace since March 2020, bringing with it a bounty of new opportunities and new challenges.
The extent of this technological advancement is one reason why big tech companies are laying off workers now, almost three years after the pandemic first hit. These organizations simply over-hired. Mark Zuckerberg of Meta recently wrote, “Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I got this wrong, and I take responsibility for that.”
For companies without the hiring power of Meta and Amazon, however, digital acceleration and increased dependence on technology created a need for technologists that was met by a scarce IT talent pool. That demand has not slowed down. In fact, Staffing Industry Analysts report a projected 7.8% growth in worldwide IT spending through 2027—and professionals will be needed to support that growth.
Why IT Contractors Will Thrive in a Recession
According to Bloomberg, more than three-quarters of business leaders are likely to avoid hiring full-time employees during economic uncertainty, in favor of freelancers or contractors. The most attractive reason for this approach is the ability to scale up or down quickly as the market changes. This allows companies to be flexible and agile—two qualities that have risen in value since the pandemic.
Furthermore, Forbes suggests that while historical trends show that an “external” workforce of contractors or freelancers is often the first to be cut in a recession, the current employment landscape may change that story for good. Many companies have realized the high value and streamlined convenience of employing contract workers—there is less pressure on HR and finance functions in this employment model
When we better understand the current demand for IT as well as the reasons why contract work is more immune to economic conditions, it is easier to see why Forbes’ list of “recession-proof jobs” is primarily filled with IT jobs. IT product managers, game developers, and data analysts are all growing professions with robust outlooks for the future. Labor market research firm Foote Partners LLC also lists business process automation, 5G, IoT, cloud, edge computing, applied AI, and cybersecurity as high-demand fields keeping IT in the spotlight for the foreseeable future.
How to Recession-Proof Your Career as an IT Contractor
If the news headlines about a coming recession have made you question the stability of your IT career, your fears are thankfully unfounded. Technology is a mission-critical element to the operations and delivery of almost every company, especially in the wake of the pandemic. The result is that your technical skills are in high demand.
A recession is a good reason to consider contract-based IT positions. Company leaders have had their eyes opened to the deep value of contractors when the economic outlook is uncertain. That said, if you are new to contracting, making the switch might be intimidating. Working with an IT consulting firm like Resource 1 can make it a smooth transition. We are focused on finding the best-fit opportunity for your goals and experience and are dedicated to ensuring stability, excitement, and advancement in your career.