This Week, It's Lotus: Tech Jobs Go 'Temp'

Jon Kenneth is an entrepreneur with a staff that includes some of America's most talented computer programmers - and no products for them to create.

That's for other people to decide.

Mr. Kenneth is part of a fast-growing industry that rents high-tech professionals to other companies on a project-by-project basis.

As the former Wall Street executive sees it, the rise of his company - I.S. Group Inc. in Boca Raton, Fla. - symbolizes a broader change under way in much of the economy.

"Companies today are not fixed objects. They are an event, and managers need people who can produce and move on," he explains. "Companies have found it more cost-effective to rent their talent rather than maintain it in-house.... The bean counters of business don't want fixed overhead, because they have to show their stockholders they can run a lean organization."

Though this shift affects only pockets of America's economy, such as high-tech, a growing class of workers now expects to work for several employers each year.

Many of these workers line up their own jobs as freelancers, while others are employed by placement services.

Either way, lots of techies are cashing in big. The people I.S. Group places usually have at least a four-year college degree and several years computing experience. A person contracted out to write a Lotus Notes network might command up to $115 an hour, while a programmer analyst might earn $30 an hour.

How the placement services operate varies from company to company, but at I.S. Group, Kenneth pays his workers directly, including both a salary and full benefits, while billing the companies that come to him for people.

When corporations call Kenneth, he sends one or several people to the work site for projects ranging in length from a week to several months.

Some people see this brave new world as a scary place, but those who have the right skills seem to enjoy the flexibility and opportunities of being a nomadic professional. They won't have to spend many years in a corporate environment where they are unhappy, because all jobs will be short-term.

"It's a real challenge to serve as many as five clients over two years, but it offers me terrific experience," says David Levine, who moves from job to job for Cambridge Technology Partners, another placement firm in Cambridge, Mass. Each assignment builds skills "that I can apply to the next project."

Flexibility is a big benefit for many contract workers. One I.S. Group contractor wants to be home to care for her mother. She chooses the hours she works on her current job, overseeing a payroll system covering 20,000 people.

Many of the firms that farm out high-tech contractors are tiny start-ups, hundreds of which have sprouted up across the country. Several firms that started with one or several contract workers have grown huge as a result of the technology revolution. Ten-year-old BSG Alliance/IT in Austin, Texas, employs 1,500 people and has clients throughout the United States and Canada.

"Our company began with the notion that the microprocessor would change the world," says Steve Guengrich, managing director of BSG. "We saw that companies would have to organize themselves differently.... Companies are outsourcing more and more of their work in areas such as procurement, inventorying, and payroll."

Moreover, Mr. Guengrich adds, "many business executives have lost faith in their own internal information-systems people and want to outsource the work. That is where people like us come in."

Guengrich says BSG can actually offer people more of a career path than a traditional corporation. The reason: the skills the workers build over time. "Those who are ambitious will do well. The information-services business is a $1 trillion industry and a large percentage of that is being outsourced."

Cambridge Technology Partners also serves clients throughout the world. It employs 1,600 people. Like BSG, it sends its workers mostly to large corporations, for projects ranging from installing a mainframe to upgrading an electronic mail system.

One group of Cambridge Technology workers, headed by Mr. Levine, specializes in serving the securities industry and money-management firms.

"We are providing computerized solutions to companies that are dealing with intense foreign competition, international distribution, and deregulation," says Malcolm Frank, head of marketing for the company. "Companies are making the transition from an industrial economy to an information economy." The explosion of the Internet, he adds, is a key driver of change. "In a few years, all businesspeople will have to be on the Internet to stay in business. Companies are coming to us, and we have more business than we can handle."