Another effect of the rapidity of technological advance is that many companies find that new business requirements place a premium on operations that they do not perform very well. Outsourcing functions such as Information Technology support or e-commerce allows them to maintain only the permanent staff needed to focus on their core competencies. In the traditional business model, a permanent full-time work force builds a company. Because of the tight job market and scarcity of critical skills, many independent professionals are able to command enormous salaries compared to traditional workers. Nevertheless, significant cost savings over staffing up with permanent employees drive the decision to hire IPs.
Traditional employees require an expensive benefit package, centered around a health plan.
The cost of maintaining them in the traditional workplace is also substantial. By contracting with an independent professional the company saves on office space, supplies, computer hardware and software, technical support, and so on. Human resource departments even factor saving parking spaces into the cost calculation. To maintain their market value, independent professionals must make substantial investments in their careers. A home office, with a computer, internet connection and a fax is an absolute necessity.