THE RECESSION FORCED companies to lay off project managers in droves, bur chat doesn't mean their roles vanished. Many oí che jobs have simply rransitioned From full-time salaried positions to contract slots.

"Larger organizations seem to be especially interested in hiring project managers who work for a contract timeframe - hiring them for the length of a specific project or to complete projects started by previous staff that were displaced in 2009," says Dhirendra Shantilal. Singapore- based senior vice president, Asia Pacific at Kelly Services, a global recruitment, outsourcing and consulting firm.

For some companies, the transition to contractors is merely a financial juggling act. They need to show a salary spending reduction through layoffs, and contract workers are usually paid from a different budget, explains Steven Mulhall, a London, England-based contract project manager.

"Project managers are still needed, particularly for cost-saving projects," he says. ''But when companies work with contractors there's no additional headcount or payroll, and the contracts are usually covered under the operations budgets."

Temporary options also give companies greater flexibility to deal with a shifting marketplace.

"Contractors fill specific jobs or tasks as they are needed, and when the contract runs out, the company can decide whether to continue the relationship," says John Challenger, CEO of Challenger, Gray & Christmas, a global outplacement firm based in Chicago, Illinois, USA. "It's a lower-risk scenario."

Even with the first signs of a recovery, companies are continuing to seek temporary solutions.

Research from Giant Group pic, a U.K. contract services provider, shows the number of IT contractors out of work for three months or more fell by 33 percent in the first quarter of 2010. Matthew Brown, managing director of Giant, cites increased business investment as a driver for the shift.

"After cutting back on IT investment for so long, businesses are now kick-starting projects that were stalled during the recession,' he says.

Yet the mere promise of new work often isn't enough ro convince beleaguered companies to add to their ranks.

"Executives are wary about getting engaged with too many new employees in case business goes south again," Mr. Challenger says.

Barry Asin, president of Staffing Industry Analysts, told Bloomberg Businessweek in January that he expected the global contractor trend to hold our for the next five to 10 years. "When! hear people talk about temp versus permanent jobs, I laugh," he told the magazine. "The idea that any job is permanent has been well-proven not to be true."

HERE TO STAY

Although companies seem to be looking at freelancers for just about every task, the inherently temporary nature of projects makes them particularly good candidates for contract work.

"Project managers can be brought in to lead specific projects, and if they do well they are moved onto other assignments," Mr. Challenger says.

Microsort has tapped into the temp trend for years, using contract workers for a variety of short-term projects, spokesman I ,ou Cellos told Bloomherg Businessweek. "Our contingent workforce fluctuates wildly depending on the different projects rhar are going on," he said. "Somebody does just part of a project. They're experts in it. Boom, boom, they're finished."

And the move to contract work ism necessarily a bad thing for project managers, says Jason Hill, PMP, partner at Sound Advice Consulting Services, a consulting and recruiting company specializing in project management, headquartered in New York, New York, USA.

"It is an excellent opportunity to try out an environment before making a long-term commitment," he explains. "Additionally, it provides project managers with exposure to new ways of conducting work and affords them a degree of choice and flexibility. This can prove to be a very effective path to employment for project managers who may have been out of the workforce for a period of rime and/or those who are looking to increase their compensation and abilities."

Going the contract route can also offer higher pay and greater flexibility, Mr. Mulhall says. He has often secured higher rates than his salaried counterparts, particularly now that bonuses for full-time workers have dried up.

The research by Giant reveals that the proportion of IT contractors expecting their earnings to rise in the next year has jumped from 61.4 percent to 65.8 percent over the previous six months.

"Contract work is more lucrative, but its more risk," Mr. Mulhall says, adding mat it's not for everyone. "A lot of people don't tike the idea of changing jobs every six months."

It's also more challenging to land contract work today than it wa,s prior to the recession, as more experienced professional project managers have begun vying for the jobs.

"Stronger candidates, with 10 or 15 years of experience have been trickling in," he says, noting that many of them are willing to take lower positions just to get back to work. That puts younger and lessexperienced project managers at a disadvantage.

To gain an edge on the competition, Mr. Mulhall advises project managers to seek opportunities that mirror their experience.

"Recruiters always want to reduce risk, and they do that by looking for contractors who know the industry," he says. "Sell yourself through your experience, because the past dictates the future."

And be prepared to keep selling, Mr. Challenger says. "Being a contract project manager is like running a small business. You have to always be looking for new projects- Otherwise you risk having gaps in your income."

Contract project managers need to be as adept at marketing as they are at standbys like scheduling and budgeting.

"You can't just apply for jobs online, then sit and wait to be hired," Mr. Mulhall says. "Contract project managers need to manage their careers as though they are projects."

That means setting career goals and objectives, communicating those objectives to their "team" (that is, the recruiters) and gathering feedback on their progress so they can adjust their plans accordingly.

"It's a lot of work," Mr. Mulhall says, "but if you can stay on top of it, it's an exciting and flexible career."