The Government Shutdown and the Rise of Contract Jobs
The staggering budget deficit and the ongoing partial government shutdown shows that those once cushy federal government jobs are not so cushy after all. At its peak, over 800,000 federal employees were sent home. The idea of being laid off, even temporarily, on such a large scale is not something that government employees are accustomed to. However, the private sector is used to this kind of turmoil. In the course of a single decade, we have seen huge crashes in not one but two different major sectors (information technology in 2000-2002 and financial services in 2007-2009) with the accompanying massive layoffs. Also, there has been a flurry of M&A activity over the past decade, which usually leads to large-scale restructuring and layoffs. For example immediately after Oracle’s acquisition of PeopleSoft in 2005, Oracle fired 5000 employees, or 43% of the total 11,700 employees working at its former competitor.
What does all this mean for the modern worker? It’s a brave new world out there. There is no such thing as a permanent job. Companies across all industries value more flexibility in staffing; for the employee that means be prepared to get the pink slip more frequently with less notice. According to a report from the University of Minnesota, the average percentage of contingent workers (which includes all workers who work for an organization on a non-permanent basis) at Fortune 100 companies is currently 20-30%, but this is expected to increase to as much as 50% in the next ten years. In other words, contractors and freelancers will be closer to the norm rather than just a minority. In the next post, we will discuss how to navigate the world of contract jobs at Fortune 500 companies.