It is a fact that small businesses, not large businesses, create the overwhelming majority of jobs in this country and many analysts look to find out why this is true. This is particularly true in the world of Federal Contracting.
For technical expertise such as Cyber Security, no matter how hard the government tries, it has failed to recruit the required number of Cyber warriors. The government is just too slow and inefficient to respond to the rapidly changing needs of the marketplace. The resulting shortage of qualified workers must be filled by contractors - large and small.
It is a common myth that, when it comes to career development, large Federal Contractors, by virtue of their size only, guarantees stability and employee career development. This is not universally true and an examination of current federal contracting patterns show that small federal contractors that pursue defined strategies often offer better career paths and stability than their larger counterparts.
In these troubled days with restricted federal budgets, stability is now becoming a major career consideration and those companies that can provide stability based on continuous work flow will have an advantage.
Other important career considerations include compensation and benefits, growth opportunities and a professional work environment.
One factor is emerging in this distressed marketplace: Large size does not ensure employee career stability and often the reverse is true: large federal contractors with heavy overhead and administrative burdens are reducing payrolls at a rapid rate and the trend of moving employees to new jobs without the proper credentials have sacrificed performance on key programs.
Compensation and Benefit Packages Favor the Small Contractor:
It is a misconception that large federal contractors have the size and dominance that allows better compensation and benefit packages than small contractors. Recent salary and benefit surveys show that this is not true with small federal contractors offering greater compensation and benefits than large contractors.
For example, the chart below compares salaries in the Washington D.C. contracting district:
Average Salary of Jobs Matching Your Search (Source Indeed.com)
In USD as of Sep 20, 2010
"Fortune 50" in Herndon, VA 20170
"Fortune 100" in Herndon, VA 20170
"Fortune 500" in Herndon, VA 20170
"Fortune 1000" in Herndon, VA 20170
"Early Stage" in Herndon, VA 20170
Average "Early Stage" salaries for job postings in Herndon, VA 20170 are 10.5-74% higher than average "Fortune 50, 100 or 500" salaries for job postings in Herndon, VA 20170. Large contractors do not pay more nor do they have the flexibility to stretch to meet the special needs of the most highly qualified candidates. Some smaller contractors however, do have the flexibility to close quickly and effectively.
As regards benefits, almost all contractors offer medical, paid time off, 401(k) matching (and a few offer direct payments as a bonus), health and disability and other fringe benefits. Many small contractors, because they tend to be more efficient in terms of less proportional overhead and general and administrative expenses, have richer co-payment and deductable plans.
Bench Strength is Not a Factor/Contingent Hiring is:
Large federal contractors in the past touted "bench strength" whereby individuals coming off of contract were kept on staff until new contract positions were secured. This added to the stability of the workforce because it tended to eliminate the anxiety of contract interruption but it increased overhead expense. With the cutting of defense budgets and the problem of excessive federal deficits, large contractors have focused on the profitability contribution of individual projects and have eliminated 'bench' placement expense from their overhead.
As an effective alternative to "bench strength" federal contracting teams (including small business partners) who win large proposals requires the ability to acquire key personnel on a contingent basis. Responding first to quick turnaround opportunities requires the ability to pull in pre-qualified candidates who already have knowledge and interest in the requirement.
It can be argued that small federal contractors, using modern tools of data management and social networking can more quickly identify and close on the best candidate for emerging jobs.
Focus on Growth for Employee Opportunities:
Small contractors are generally considered more innovative and agile in taking advantage of new technology or trends. Cyber security requirements are an example of this. Since cyber security is a rapidly changing and developing discipline in the federal marketplace, both large and small contractors are essentially starting at the same position. Furthermore, small contractors can evaluate and adopt new techniques and cyber security tools more rapidly than large contractors.
Stable Small Business Market:
By law, small businesses are required to receive 23% of federal contract dollars. This is not a guarantee however that all small business contractors will receive contracts and marketing experience and customer domain knowledge is required to obtain business.
Marketing experience is not limited to large businesses however and there are a number of successful small businesses owned and operated by experienced federal marketers. For a small business, marketing is the key to survival and successful small businesses make marketing and business development the first step to success.
Growth Oriented Management
It is an accepted fact that growth produces benefits, especially stable good paying jobs. Those that know how to grow companies are generally entrepreneurial and marketing oriented. There is a tendency for some entrepreneurs to repeat the model that proved successful in the past and create organic (non M&A) growth. Organic growth creates stability when the new business additions are within the culture of the small business.
Large companies on the other hand generally create growth through Merger and Acquisition activity and often the acquired company loses both its unique culture and existing jobs. The acquisition process can be a very destabilizing process when it comes to existing jobs.
When considering organic growth all aspects of the business are important. Core competencies must be aligned with areas and segments of the Federal Government that shows the best future growth. Presently the areas of greatest potential in government contracting are in two areas: Military Intelligence and Cyber security. In these areas however, a contractor must be prepared to nurture the employee base in order to remain competitive. This requires investment in effective training programs and a culture of recognizing individual performance.
Career Development: Conclusion
The Federal Contracting Industry offers significant opportunities for those interested in building an Information Technology/Cyber security career. There are many contracting companies that are active in the space but care must be taken to meet career objectives when selecting a job opportunity. There are many factors to consider and due diligence is required.
When considering a career move in the Federal Contracting Industry a number of factors should be considered when evaluating the potential employer:
These and other questions should be raised in the interview process by the candidate interested in building a rewarding and stable career. Consider growth oriented small businesses. They have a lot to offer.