Interesting Tech Economy Indicator

Nat Torkington over at O’Reilly has an interesting tech economy quasi-contrarian indicator: the movement from contractor to full-time employee and back again:

… a lot of our friends are changing jobs again… Mike Loukides pointed out that movement in salaried labour means the industry is booming. Similarly, when [smart people]all return to contracting from salaried employment then you know that there’s a ton of demand.

The corollary is, of course, that when the clever contractors head for salaried positions then bad times are coming. I know that I ran for the bosom of O’Reilly in 2000 when I felt the bust coming. If you wanted a bellweather for the future of the tech economy, you could track a few dozen brilliant contractors and see when they all begin heading for safe jobs.

He’s right, and this should be easily tracked by meta-analyzing Craiglist, mailing lists etc. While my sense is that it is a lagging signal, it is still worth watching.


  1. This transit is true only for medium-to-good contractors. The really good ones can write their ticket – regardless of the economy.