How IT bosses turned the tables on our cushy consultancy gigs
I wasn't laid off, I was freelancing from the beach, honest
I think I’ve been through enough economic cycles in my life to say that the nature of employment, at least in the financial-tech industry that I’m most familiar with, has changed fundamentally in the last few years.
If you’re a technology worker and your job suddenly seems unusually precarious, that’s because it is: fear of unemployment, especially chronic or long-term unemployment, was virtually non-existent among techies in the not-too-distant past, but that carefree era seems to have gone the way of the COBOL programmer.
The short explanation for this is that tech people are now more subject to “market forces” than ever before, and that the market itself has become far more merciless and competitive.
More specifically, employers’ obsessive drive to cut costs (driven in turn by the growth of shareholder power and a greater-than-ever focus on the bottom line); the delicate state of the economy since the start of the global financial crisis in 2007; and the ready availability of very low-cost labour in Russia and India, or even Scotland and North Carolina, have conspired to burst the bubble of invulnerability that once protected us.
There was a time when job security was a non-issue for techies. A seemingly insatiable demand for good people, and a chronic shortage of technologists with the skills required by companies scurrying to build out their technology infrastructures, meant that we could virtually call the shots. In the 1980s and 1990s the number of consultants in the most demanding financial-tech jobs grew and grew.
Being freelancers, consultants were able to jump between gigs more or less at will, were blissfully removed from the nasty world of corporate politics, and, being paid fixed hourly rates, weren’t subject to the fluctuations of investment banking’s annual “bonuses”.
I was a consultant for years during that period, and I was never out of work unless I chose to be. I took multiple breaks of six months or more, and when I wanted to dive back in there was always something available. On the few occasions when a contract ended unexpectedly, I was able to find another gig pretty much immediately.
But at some point things changed. For me, it was during the recession of 2001 to 2002, a period of greatly reduced profits in banking that also happened to coincide with the dot-com bust. I was laid off from my job at a global investment bank - a full-time position, in this case - and found that landing another one was not so easy.
No one on the planet was qualified for the jobs advertised
In fact I was unemployed for longer than I’ve ever been - more than a year - at a time when I definitely wanted to work. It was then that it became clear to me that the world was suddenly a different place. The general problem was that, because of widespread layoffs and tight budgets, tech people now faced a “buyer’s market”. Employers and hiring managers were firmly in control, possibly for the first time in my 20-year career, and they made the most of the situation.
The requirements lists for open positions - programming languages, middleware, operating systems, networking protocols - became almost laughably long, with managers insisting on skill sets that, it seemed to me, no one person could possibly possess.
But if this meant it would take three times as long as usual for them to find qualified candidates, so be it. They didn’t seem to be in any rush, and with thousands of newly axed technologists flooding the market they were confident that they would be able to find someone who fit the profile eventually.
Coupled with a previously unknown stinginess, the shift in the balance of power also meant that technologists could no longer demand the same compensation as before. In my case, when I would sheepishly tell headhunters what my last salary was, some of them would practically chuckle at the number, or at the very least let me know that I couldn’t possibly expect to get that kind of money now.
(That salary was high by “normal” standards, but nothing earthshaking on Wall St.)
There was an additional catch here: Some potential employers feared that if I accepted a big pay cut, I would bolt the minute the economy improved and I could get more. My reassurances to the contrary generally failed to change their minds, though I did eventually take a job making considerably less than I’d been paid before; this was essentially the same position I’d been sacked from, and for the same company, but I was wise enough to realise that a bird in the hand was worth a lot more than being unemployed for another year or two.
Which brings me to another problem I faced after my layoff: the stigma of being among the unlucky chosen people. Sure, thousands of employees across the financial industry had just been let go, but why was I part of the 10 per cent or so selected?
Coming to terms with being told you're not wanted
Clearly I was not a top performer, or I would have been seen as too valuable to sack. As always, there were any number of reasons that particular people were shown the door during the 2001 recession, including personal grudges and salaries that were making too large a dent in newly scaled-down budgets, but it would have been counterproductive to complain about conspiracies against me or the fact that I’d been deemed too expensive.
So the stain on my reputation, even though this had been a mass layoff, was real, and the longer I remained unemployed the bigger that stain grew.
Having been selected to get the axe and been unable to find a new job in three, six, nine months was not a winning combination. There have been positions advertised where the requirements have explicitly (and, from a legal standpoint, foolishly) stated that candidates “must be currently employed”. But even with no such text in the ad, ongoing employment can be an unspoken requirement.
In the best case a hopeful applicant might simply have to work much harder than usual to convince the hiring manager that he or she is worthy despite being found expendable at a previous job. Once the candidate’s unemployment period passes, say, the six-month mark there is often the additional (and frankly silly) perception that his or her technical knowledge is now woefully out of date.
Being unemployed for an extended period, I found myself subject to the same worries and fears — more pronounced as each month went by — that plague anyone in this position, though no one I’d known up to that point.
Would I ever find another tech job? If not, what else was I qualified to do that would bring in anything remotely close to what I’d been making? Would I have to lower my expectations and aim for a tech position in a less prestigious industry, doing less interesting work and making much less money? For that matter, given the state of the economy, was the hiring environment in other industries equally brutal?
After years studying computer science in school and decades working in the field, was my career over just like that? It was surreal that I was even asking myself these questions. Then there were the usual long-term worries about money and medical insurance: What if my wife lost her job, which would leave us uninsured (a sad fact of life in the US) and with no money whatsoever coming in?
That particular story had a happy ending when, as mentioned, I got my old job back, albeit as a consultant at a ridiculously low rate. (The status of consultants had changed also; now being a full-timer seemed preferable because it was slightly harder to let them go.) Though, miraculously, my annual compensation eventually climbed back to where it had been previously, the lesson was clear: even with a “permanent” position I could be laid off suddenly and with the flimsiest of excuses, or no excuse at all.
More importantly, I could no longer count on having a new and possibly better gig within two months, let alone two weeks.
Between offshoring, relentless pressure to keep costs down, a glut of software engineers, and aggressive new management practices like the annual culling of the “bottom 10 per cent” now common among financial firms, job security, even in once-exceptional technology departments, was no more. And significantly, excluding a small group with extremely specialised skills such as algorithmic trading, ultra-low-latency messaging, or pricing of complex derivatives, there was no noticeable change in this state of affairs in the relatively calm years between the dot-com-bust and the current one. This suggested that the new precariousness could be with us for a long, long time.
I remember when I found certain kinds of blatant kissing-up offensive — at one firm, for example, there was the unfortunate tendency even for people who hated playing golf to pretend they loved it because that was the only way to get on upper management’s good side.
Now I wasn’t so sure I’d sneer at these people. And if I were ever laid off again I’d most likely have to adopt the approach I’d learned from colleagues of mine who’ve also spent extended periods “on the beach” in the last decade: I wasn’t unemployed, I was “in transition” — or better yet, “doing freelance consulting”. My list of clients? I’m sorry, but that’s confidential information. ®