Saturday, October 18, 2008

Job prospects in a bad economy

I have a long standing hypothesis that opportunities for contractors actually go up during recessions, because contractors are an inferior good in the economic sense of the word. For those who aren't up on econ theory: when times are bad, the price of a used car goes up and the price of a new car goes down, even though people prefer new cars to old, because fewer people are buying new cars and more people choose to buy used over new. Likewise, if the price is the same most businesses would rather have a permanent employee than a contractor, because of the benefits of continuity and the reduced cost, but in an uncertain financial environment prefer contractors because getting rid of them is free. Recently, my recruiter confirmed this.

What I did not anticipate was how this would affect recruiting companies. Last week I got eight calls and e-mails (three of which were the same company with the same offer. I sense some inter-department competition). Of those that actually gave positions, rather than instructing me to send them my resume or asking me to do their job for them, they were either for a stable company that has the reserves to ignore the recession, or a company that just got a second round of venture capital that (I assume) is run by idiots. So there are still jobs to be had, and the recruiters are hungry.

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