The IT Contractor Crunch - How to beat it

The ostrich is famed for its ability to stick its head in the sand. Up and down the land, people could be forgiven for doing just the same, such is the uncertainty of the predicament we find ourselves in.

To continue with the animal metaphors, now that the economic cat is out of the bag, companies large and small have to take tough decisions on costs and spending, and they will be, and are being, ruthless.

For contractors, decisions on contract extensions will likely come out of the blue, the office will reek of rumour, and each day will bring fresh news, most of it of the black variety.

In such a situation, a contractor needs a strategy, and quick.

The alternative is to do nothing, wait out the gig, and be ready to leave your desk at a moment's notice, should the call come – and for many, it will.

Having said all this, some contractors will know that their position is as 'safe' as it can be, perhaps because they work on a business critical system and their knowledge seems irreplaceable. I say "seems" because anyone who has ever been involved in a project which was outsourced will testify to the surprising speed with which knowledge can be transferred.


A strategy is not a plan as such, but a flexible approach to possible outcomes. The key is to assess each possible outcome, and lay out actions you can take now, that will put you in a better position, should the outcome occur.

Step 1: List the Possible Outcomes

For example:

1. Contract to continue under the same terms.

2. Contract re-negotiated Rate.

3. Contract End Date brought forward.

4. Contract terminated.

5. Changed responsibilities e.g. covering 3 Systems/Projects not 1.

6. System/project outsourced.

These are some of the possibilities. Write down your own list, in order of most likely to happen, based on your experience and feeling.

Step 2: Prepare an Action List

For each possible outcome, what can you do now that will put you in a better position, should it occur.

Here are a selection of typical circumstances and actions:

If you think/feel that you are in a strong position, but that you may be asked to cover other systems, you may decide to learn a little about how those other systems work, such that your position is strengthened even more.

If you think/feel that your contract may be terminated any minute, then maybe it's time to start putting out feelers with your network of contacts for other work. Also, you may need to discuss with a partner, where you may be willing to work, if need be. The earlier these discussions are had, the clearer you will be on what contracts you are willing to take.

Re-assess the market for your skills and experience. Considering your life, as a whole, and the commitments you have, lay out your criteria for where you would be willing to work, and at what rate – should push come to shove. The earlier you can consider and weigh up these issues the better placed you will be to ACT when required.

If you think/feel that your project is a candidate for being outsourced, then once again, you need to lay out your own exit strategy. The company will expect you to play ball and pass on your knowledge willingly. This may give you some space to negotiate an extension or the opportunity to move to other projects.

Once again, if your Project/Contract is terminated, are there other opportunities in the same company, perhaps Projects with ring-fenced funding that are critical to the business? If so, it's worth exploring the possibility. If you have a good relationship with your manager, they may well be able to assist in finding other projects internally.

Step 3: Act on it

There's little point in spending some time on a strategy, only to leave it sitting there.

Act on it. Make some calls, make some emails.

It is often tempting to do nothing; to let "the wind" decide on which shore your boat turns up. But whilst circumstances are not in your control, it is up to you how you respond to them.


Finally, let's look at how to continue to do your work well, whilst operating in these uncertain and rumour-filled environments.

Because, let's be honest, it's hardly motivating to work on a system/project that may be canned at any moment.

Now, every contractor has a different approach. Some will continue to do a good job and be motivated simply because they are being paid to do so, and that's that. For others, whilst the money is important, they want to work on something that will last and be of use.

The simple fact is that, in times like these, you need to swing the focus around, and provide your OWN purpose and motivation for working – and one that also fits with your strategy as outlined above.

Once again, here are some examples of providing your own purposeful approach to work that does not depend on the company:

You may decide that strengthening your knowledge of a particular system/aspect-of-the-system will make you less likely a candidate for early contract termination. In which case, make that a priority, and the communication of that too!

As mentioned before, if you have identified that there may be other possibilities internally, then use some time to explore where those may be, and who to contact.

If there are extra skills that you might develop, which could stand you in good stead after this contract, then turn some of your focus to that.


Another way of looking at this is that it's about positioning yourself such that, whatever happens, you have already prepared the way, and are clear on a course of action.

I hope this has provided a useful overview of a strategic approach to un-certain times.

In a nutshell:

· List possible outcomes in order of most likely.

· For each one, make an Action List that will put you in a better position.

· Act on it.

· Have your own reasons and purpose for working.

The IT Coach – The #1 Coach for IT People!

Friday 21st Jan 2011