
Is the Rise of Contract Workers Killing Upward Mobility? - fern12
http://knowledge.wharton.upenn.edu/article/the-perils-of-contract-workers/
======
wvh
I've done mostly contract work because I liked the freedom when I was younger.
Now I notice a lot of people my age have moved on to management or jobs
"higher on the ladder" while I stress about the uncertainty of income when
contracts end. I assume the lifestyle might suit people who are
extraordinarily good networkers, but I feel mostly tired these days. My
younger self didn't know about the fatigue the responsibility for a family
brings.

In a fixed career you have a chance to build something up, while in
contracting you're often back to square one with each new contract. You might
have more experience, but you don't have the sort of trust and responsibility
which you earn if you work long enough in a company or with the same group of
people.

It's hard to find truly permanent jobs these days.

I think it's also biting companies in the long run, as I notice more and more
graveyards of abandoned projects and services running without anybody present
who was involved in building or setting up. But those costs don't seem as
obvious to those in charge who'd rather not have to hire permanent workers.

(I work in software engineering and security.)

~~~
twobyfour
And contracting in a high-paying field like software development is one thing.
Contracting for low-skill labor through a marketplace like Uber, TaskRabbit,
Handy, etc. provides even less opportunity for any sort of career development.

~~~
RationPhantoms
I feel an odd magnetic sway towards the future envisioned in Neil Stephenson's
"Snow Crash" where the gig-economy IS the economy.

~~~
wavefunction
What could be more alluring, living in a shipping container in one of the
shanty slums most of Snow Crash's people live in or being one of the lucky few
to live in a corporate enclave?

I'm just glad we're going to have the opportunity to live in a cyber-punk
dystopia!!!

~~~
creaghpatr
I just started reading Snow Crash, really loving it.

~~~
s73ver_
Read The Diamond Age afterward. It's not exactly a sequel, but all indications
seem to show that it takes place in the same world, a couple decades later.

~~~
Fnoord
Approx 80-100 years according to Wikipedia [1]. Though no source is cited.

The world of Snow Crash, where a few corporations own the entire world with a
very tiny government, is also the basis of the book Jennifer Government [2] by
Max Barry.

I found that book a bit easier to read. Diamond Age, I can't get through it
yet. Cryptonomicon, also by Neil Stephenson is on my list, as well as
Neuromancer by Gibson.

[1]
[https://en.wikipedia.org/wiki/The_Diamond_Age#Snow_Crash](https://en.wikipedia.org/wiki/The_Diamond_Age#Snow_Crash)

[2]
[https://en.wikipedia.org/wiki/Jennifer_Government](https://en.wikipedia.org/wiki/Jennifer_Government)

------
arca_vorago
I am taking a break from being a senior sysadmin because I got burnt out for
the third time and am happily pursuing a data science degree. I've been the
contractor and the employee.

My two cents is that companies have become so focused on killing upward
mobility on purpose as a cost saving measure due to what I feel is
increasingly more short term thinking. I can't tell you how many times during
my contracting days I heard a story about how $company used to have one or
more full time employees who setup, managed, and knew all their systems, but
they decided they would rather save the salaries and just use the contractor
"when needed". Of course half the time it was some halfassed MSP type shop
that didn't know their ass from their elbow, didn't really care about being
proactive, and milked billing enough the companies ended up spending just as
much money as the salaries but with 1/8 the effectiveness. Throw in
outsourcing to foreign countries (Goldman Sachs) and abuse of H1Bs and yeah,
I'd say the rise of contract workers is killing upward mobility.

That said, its not the contractors fault, its managements. My view is this is
largely because the CTO and CIO positions are failing to properly brief the
Cs/board of directors on why they shouldn't be doing this, and that is largely
because the CTO/CIO is too much a management and not enough tech. Often I
would even see companies without a CTO/CIO, and some poor greybeard would be
haphazardly trying to run an IT department and speak board speak at the same
time, in the end doing neither well because they had little backing from
higher up.

This is why so many companies are literally drowning in their own technical
debt due to greediness and short term thinking!

I think its time for more technical people to go get an MBA and shake up the
stagnant CTO/CIO positions.

For a long time I just wanted to be in a cold data center all day with my head
in a terminal doing good work. As a senior sysadmin though I have learned that
I should have been playing the politics game in the meeting room to protect my
department and the company. I wish I had learned this sooner.

------
sreenadh
Contract workers or Uber workers is a bad deal for all, with some short term
gains.

For a worker, yes, its less of office politics and having to deal with crappy
co-workers. But that is how you grow. I learned so much when I am working with
people than being all alone. So, having couple of people approach the same
problem in different ways, helps you learn, teach & grow. I was learning
something new everyday, when I was working in a team. Plus contract jobs are
effecting the basic needs of human beings - "food, clothing & shelter", due to
the very nature of uncertainly. Basically I am more worried about the basics
and not as focused at my job when I have a full time job. I feel that I am
just completing the task at hand to get paid. I don't analyse the issue and
try to find a solution or seek for some improvement. Plus working in a
specific domain for a period will help in gaining experience and you have
build up skills.

For a employer, how much ever you document a solution, there is going to be
knowledge gaps. Only when you have someone working on a problem for a while,
will they be able to come up with a better solution. Each employee comes come
a different background and will view the problems differently. That will bring
about a nice work culture.

Team work is not given enough credit. Instead, there is always the focus on
one rock star that does it all. I personally feel that for that one rock star
to actually perform, there needs to be a team behind to support.

~~~
mgkimsal
You write as if "contract work" means you never talk to anyone at all, and
it's just not the case. As a freelance developer, I have to communicate with
clients and end users all the time. I subcontract out some work, so I have to
work with them, oversee some work, manage timelines, etc.

> Plus contract jobs are effecting the basic needs of human beings - "food,
> clothing & shelter", due to the very nature of uncertainly...

Until your job (or department) is eliminated, or targeted for reductions.
You'll have a similar level of uncertainty, but will have less control over
doing anything about it.

> I was learning something new everyday, when I was working in a team.

Great for you, but at some point, you won't be learning much. Or you'll start
to learn that "we're doing it joe's way because he's been here the longest".
Or "we're going to use nodejs because XYZ... " but what it really means is
dave wanted to learn node so his resume looked better when he left for the
next job last month.

> and having to deal with crappy co-workers. But that is how you grow.

You can "grow" in a number of ways. Figuring out how to get clients, get work
done and deliver projects to get paid is at least as much 'growth' as learning
how to deal with office politics and crappy co-workers, many of whom may not
share your work ethics, drive or priorities (yet their ethics, drive and
priorities will still impact your ability to get things done).

> I personally feel that for that one rock star to actually perform, there
> needs to be a team behind to support.

And I've seen the opposite - where 1 or 2 people did 90% of the work - they
were the true experts (domain, tech, etc) yet the entire team was praised,
even when they either didn't contribute or in some cases were actual drains on
the project. To publicly call out the bad team members, by, say, moving them
to a different project, would look bad and make the manager(s) look bad, so
things were kept as they were.

There is no one right setup for all projects or personalities.

------
jondubois
I've done a lot of contract work as a software engineer over the past 5 years.
It's a good way to experiment with a lot of different companies and
industries.

It's generally true that contractors can't get promoted within the company.
It's not unusual to see 40+ year old contractors still working as engineers.

The money is great but you really need to have a low risk investment strategy
on the side... I don't think you can get rich from contracting but you can
have a very decent retirement.

Contracting is good if you're burned out with startups that lead nowhere. It's
the closest I've felt to being my own boss.

~~~
Nursie
As a contractor in the UK I feel like I have better pay and prospects than 90%
of staff members.

Not 'promotion', but more respect for my expertise and more choice about my
working practices.

'Promotion' is not something I've often observed happening in any of the
software departments I've worked with of late.

It does scare me when people say things like "40+ contractors _still_ working
as engineers", as if 40 is old. I'm 40 next year and less than halfway through
my working life (according to the government, obviously I'd like to retire
early).

~~~
Swinx43
I agree with your assessment of being a contractor in the UK. I work as an IT
contractor in the UK as well and have been a permanent employee before that.

Permanent members of staff seldom get the same money as skilled contractors
and have to put up with a lot more restrictions around holiday and work life
balance.

I would equate a contractor in the UK to being the equivalent experience of
being a consultant without the politics and drama that comes with it. I have
worked for almost a decade as a consultant in different countries and much
prefer being a contractor to that.

Promotions seem to normally equate to more responsibility with a meagre if at
all pay increase for permanent members of staff. People forget that there is
only 1 CTO in an organisation, not everyone can ever get to that level. Most
get stuck in middle management hell doing unfulfilling jobs.

~~~
switch007
Any tips for transitioning to contracting? Should you be in a certain place
(experience, ability, etc) or is just about taking a leap of faith?

~~~
Swinx43
I would be happy to give some assistance and guidance if you would like. Get
in touch with me, my email is in my profile.

~~~
ajamesside
If you're willing then I too would love to pick your brain about this. Can't
see an email on profile though.

~~~
Swinx43
Sorry about that. I have added it. Feel free to send me an email and I will
get in touch asap.

------
otakucode
Upward mobility? Research came out 3-4 years ago I believe that showed that
social mobility no longer existed in the US. It is normally measured by how
many people die in a different tax bracket from their parents. As of a few
years ago, that simply wasn't happening. If you were born to poor parents, you
die poor. If you were born to rich parents, you die rich. On the overall
statistical scale, there is no mobility.

~~~
hectorlorenzo
Trying to find references for this, I've found a New York Times article(1)
that claims that upwards social mobility has not changed in 50 years. The
article points to the research site(2), where they say:

> Our work shows that children's prospects of earning more than their parents
> have fallen from 90% to 50% over the past half century.

Is the second source referring to absolute mobility?

(1) [https://www.nytimes.com/2014/01/23/business/upward-
mobility-...](https://www.nytimes.com/2014/01/23/business/upward-mobility-has-
not-declined-study-says.html?_r=0) (2) [http://www.equality-of-
opportunity.org/](http://www.equality-of-opportunity.org/)

~~~
frgtpsswrdlame
I think perhaps he overstated the effect but this article will give you a
bunch of information on social mobility in the US.

[http://www.politifact.com/florida/statements/2014/nov/06/jeb...](http://www.politifact.com/florida/statements/2014/nov/06/jeb-
bush/us-workers-least-mobile-developed-world-jeb-bush/)

~~~
hectorlorenzo
Amazing, thanks!

------
grahamel
> “One big issue is training,” notes Bidwell. “As an employee, your employer
> may pay to train you and keep you up to date on new technologies. They will
> also give you a chance to try new kinds of work and learn that way. As a
> contractor, nobody is paying for you to learn

I've now been contracting as a developer for as long as I was a permanent
employee and I've learnt more as a contractor. Sometimes it's been a bit of
luck with a job but the rest is mostly from only having to do the job you're
in for - so no reviews, company meetings and the rest, plus I can pick and
choose (and afford) to go to more workshops and conferences.

It can be easier to be complacent as a perm employee but less so as a
contractor.

~~~
mattmanser
That's very different than what they're talking about.

Firstly they're not talking about your kind of contracting.

Secondly, as developers we have a lot of power and freedom because our job is
to use the very tools which make it easy to learn.

Other people need more formalised training, or help even getting started using
the new tools.

It feels like you're trying to blame the workers, the victims, here.

~~~
grahamel
Oh, I wasn't incinuating any blame with that comment, just that it's not
always the case.

I read the article as covering all types of contracting, include my own.

------
sporkit150
I come from a blue collar family and was one of the first to take a white
collar job in 2007. I planned on making a long term commitment to my first
employer, but spent 6 years fighting tooth and nail for more responsibility
and money.

Eventually I had enough and tried jumping into contracting (but ended up in
consulting). At this point my career and pay went through the roof. I'm making
(literally) twice as much money now, and finally achieved the title I was
after.

Most of the companies I've worked at don't value the domain knowledge their
current work force has. They waste time and money taking risks on new
resources like myself.

I don't feel I'm personally a bad investment, but if companies we're willing
to prioritize their current work force, I wouldn't have to bounce around
employers to get where I feel I'm best utilized.

~~~
crispyambulance
This!

It reminds me of a great Clay Shirky essay:

[http://www.shirky.com/weblog/2013/11/healthcare-gov-and-
the-...](http://www.shirky.com/weblog/2013/11/healthcare-gov-and-the-gulf-
between-planning-and-reality/)

------
oldpond
Or upward mobility was dead and spurred contract working. Rates have changed
little in the last 20 years. We know our masters sell us for $120/hour when we
only make $40/hour. I was stagnated for 10 years before I went solo in 2006.

------
rurounijones
Look to Japan for an example of a working underclass of part-timers /
contractors and their lack of stability, mobility and career prospects vs full
timers.

Japan's unusual hiring practices in large traditional corporations (Straight
from university or bust) doesn't help.

------
danschumann
Any time you can earn more than you spend, and take advantage of compound
interest (index funds, etc), you could eventually become rich, i.e. upward
mobility.

In terms of jobs, it seems there are fewer guarantees and fewer formulas to
follow (you used to be able to work somewhere for 30 years and count on a
pension).

Upward mobility is still alive and well, but it's through self education and
using the internet. Constantly improving is the only way to beat the game.
Discipline, etc.

~~~
speedplane
Agreed, upward mobility exists, it just takes forever, literally a full
lifetime. Chances are you won't really benefit from it, either you'll have a
nice retirement or your kids will get a better start.

------
walshemj
Its always struck me as odd that Contractors in IT in the USA don't get the
premium you do in the UK. I would expect 3x my FTE rate as a self employed
contractor and that's before the better tax treatment even after the reforms
to tax on dividends.

~~~
danmaz74
From what I read, it looks to me like actually, in the UK, it's permanent
workers which have pretty poor salary for the IT market.

~~~
richardknop
Yes. Bus/tube drivers have similar salaries to what many companies are
offering to software engineers. So it's a bit ridiculous situation. Often the
same company which offers low perm salary will hire contractors with high
daily rate (which roughly translate to 2-3x money after taxes) without
blinking an eye.

~~~
danmaz74
Any idea about why? I could understand a big difference if firing employees
was very difficult for employers, but AFAIK after Thatcher firing people in
the UK is pretty easy.

~~~
taway_1212
IMO, in the UK the FT employment (for "senior" roles) is for suckers who don't
realize their actual value. If companies can't find enough of them, they bite
the bullet and supplement with contractors. Hence the two separate pays for
the same job.

------
acty1
Upward mobility to what?

As a software contract worker, the last thing I want is "upward mobility".

That means more bullshit and less actualy hands on development.

Being a contract worker let's you control your taxes better and you can find
another gig without feeling like you killed the family cat when you 'leave for
another opportunity'.

If your thing is upward mobility, then incorporate yourself. Slap on CEO and
Director title on your LinkedIn profile and call it a day.

------
bsenftner
This mentality is far worse then the article describes. The short sighted lack
of institutional knowledge is, for technology companies, a serious issue. We
are knowledge workers, and we know too clearly how technology management tries
to treat salaried developers as inter-changeable. Add in contract technology
developers and you have a recipe for success-causes-failure situations as
there are black holes in the institutional knowledge of the flagship revenue
generating product the company offers.

I see time and time again, technology management not grasping it is the
comprehensive solution, the product that allows customers to solve their
problems without other software that make the difference. Any key technology
is great, but without all the "document / project" wrapper, multiple
import/export options, and API interfaces that contract developers are often
tasked to create that enable the "key technology" to have the accessibility to
be successful. Without all the "interface and GUI stuff" you do not have a
product. That "interface and GUI stuff" is a core competency, yet technology
management rarely recognizes this.

~~~
emidln
> This mentality is far worse then the article describes. The short sighted
> lack of institutional knowledge is, for technology companies, a serious
> issue. We are knowledge workers, and we know too clearly how technology
> management tries to treat salaried developers as inter-changeable. Add in
> contract technology developers and you have a recipe for success-causes-
> failure situations as there are black holes in the institutional knowledge
> of the flagship revenue generating product the company offers.

Quoting a bit of comedy:

    
    
        As long as there are ill-defined goals,
        bizarre bugs, and unrealistic schedules, there will be 
        Real Programmers willing to jump in and 
        Solve The Problem, saving the documentation for
        later.
    
        -- "Real Programmers Don't Use PASCAL"[0]
    

There are a lot of consultants who stand to make a ton of money due to lack of
institutional knowledge.

[0]
[http://web.mit.edu/humor/Computers/real.programmers](http://web.mit.edu/humor/Computers/real.programmers)

------
Kiro
Do all contract workers have their own companies, do their bookkeeping etc?
Seems like a lot of hassle just to do gigs.

~~~
Nursie
I do.

Rather that than fill in holiday forms, attend company meetings, have annual
performance reviews etc etc.

~~~
Kiro
Yeah, but you don't risk going to jail just because you're bad at bookkeeping.

~~~
Nursie
I don't do it myself, I pay an accountant. There are lots of accountants
around that cater for this sort of stuff. I pay £120 per month and they keep
the company ticking over, let me know what it owes and who to, when I need to
pay etc. They also prepare my personal tax return each year.

I'm not going to jail anytime soon.

------
godzillabrennus
Yes.

The problem is that automation will be taking even more jobs away in the near
future.

It’s going to be a hard transition for people.

~~~
briandear
We’ve heard the same argument throughout industrialization. And everything was
fine. Nothing is uniquely different now.

Starving blacksmith, out of work horse trainers; yet an entire new industry,
the automobile essentially created from nothing that employed more, created
more wealth than all horse related commerce in the history of the world.

It’s arrogant to think that this time it’s different, that somehow our
technology advances are finally going to wipe out the common worker. These
arguments that automation is going to collapse society, etc— straight out of
the Marxist playbook; they were saying the same thing about factory machinery
a century ago, weaving looms, for example.

Everything will be fine.

~~~
jacobush
Exactly! Nothing will happen that a global war or two can’t sort out.

~~~
logfromblammo
Every displaced worker can retrain as an infantry soldier within weeks.

~~~
jacobush
Every displaced worker can be repurposed as training targets for the drones
and then upcycled to Soylent Green after the training session!

------
ivanhoe
IMHO the single best thing about contracting is not having to deal with office
politics and chasing promotions... which is also a downside, career-wise, as
you don't get promoted, ever.

------
mc32
As a contract worker it's unlikely you move up thru the organization you've
been placed with. You may move up the org of the company who you contract with
but your best bet is to opt for the trigger strategy and hop from one job to
another with the accrued expertise, of there is expertise you can leverage. If
it's repetitive stuff, then, there is little leverage and the best bet might
be in moving to the management track.

------
chasd00
I'm a consultant and think about going independent every so often. The thing
is there's only so many hours to sell.

I'd rather be at my firm with bonus tied to account revenue which is generated
by teams of people. That way your pay is disconnected from your time and has
much more room to grow.

------
pgeorgep
There are costs and benefits to choosing this line of work. The benefit is
obviously the freedom to work when you want. Meanwhile, there is a hefty cost
of being a contract worker - which comes with a lot of hurdles.

------
jussij
At least when it comes to software development, contract work in that field
ain't what it used to be :(

------
kevin_b_er
Yes. This is a further consequence of the maximization of profit at the
expense of the common person.

------
Animats
Well, duh. Is that really an article from today, or did something from a
decade or two back get recycled.

------
k__
I make double the money I made as an employed dev, so I think I moved upward
quite good.

