Internal economies and large companies

Life as an independent contractor is going to be a whole lot more ‘interesting’ for the next few months and possibly few years. The credit crunch (cue bad joke about the ‘credit crunch’ sounding like a bad breakfast cereal) has been having an effect on the wider economy for a number of months and from my personal survey it appears to be hitting the technical community and big companies. It may simply be that November/ December are simply exhibiting their usual end-of-year slow down and that activity will pick up again in 2009, but I don’t think so.

I have been more active than usual in monitoring job vacancies on account of the fact that a major contract ended and I had no immediate opportunities. As the financial markets started to resemble a roller coaster (up and down, but far more down than up) there were many, many contracts advertised in the financial services sector. Now I don’t have any experience in financial services, but when you don’t have any other work, you start to consider other possibilities. Of course as the financial meltdown continued the possibility of turning up on a Monday to start work and getting terminated 24 hours later grew and grew. So maybe financial services wasn’t the way to go for me, but that question became moot as within a couple of months there are almost no jobs being advertised in financial services. The companies have closed down all recruiting activity as they try to work out what on earth they are going to do to weather the storm.

Fortunately for me I managed to get a new contract with an existing client but this got me to thinking as to why I was having difficulty finding new opportunities. Obviously, the credit crunch is not helping, but I also realised that as a small contractor my network is very dependent on the people I meet. I have had a contract at a large company for over two years now and I realised that my network of contacts is actually almost exclusively internal to the company.

The company is so large it is functioning as its own mini-economy- people change jobs, move, have health care and many the other benefits that are typically assigned to a government. And they do all of this without ever actually leaving the company. Even more bizarrely is that different departments start poaching people to server their own means and consequently even turf wars erupt. When people are looking for a new role they have to advertise their own services to the rest of the company, just as you would in the ‘real world’.

I have no idea if this is the same in all really large companies, but I can imagine that it is. And here is my point- although this company is exhibiting many characteristics of a country, a government and an economy, it is not a totally related to the world outside the walls. The closest analogy I can come up with is the artificial economy that was put in place by the Soviet Union: I can clearly remember having a discussion in the early 1990’s with an ethnic Russian in his late 50’s who was convinced that the West was forcing up the price of bread. I never did work out if he thought it was all part of the closing stages of the Cold War or just some capitalists playing with his mind. What became clear was that under the soviet system he had been paying far, far less for his loaf of bread: the system was determining the price to pay, not external factors such as the price of wheat in Canada or a rise or fall in the price of oil to transport the oil.

What I find most interesting is that the very companies that are the basis of the whole free market system are functioning internally in exactly the same way as a system that they brought to its knees. I think it is going to be one hell of a ride to watch how this plays out over the next few months. But in the meantime I am going to put much more effort into developing an external network. So look out for me at a few more conferences in the next few months- I’ll see you there.

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