I am a manager in huge transnational outstaff/outsource/consulting service provider responsible for a group of customers with projects and individual consultants.

I make my living building, fixing, running and dismantling IT organizations.

I'd like to share my vision of why it's happening with the market.

1. Supply and Demand: Demand for individual contractors is low, supply of people who want to be self-employed is huge. Means customer has leverage in negotiations and thus race to the bottom. Demand for FTE is huge, while supply is low. Means employee can dominate the market and ask for high compensations.

2. Cost-To-Company: Everyone compares cash on hands with rate billed to customer. While company bears cost for extra taxes, benefits and internal services (Payroll, Operations, Internal IT e.t.c.). That's could be called direct costs.

3. Cost of developer/employee acquisition (On average pass rate is 1:20 (hire:Active Candidate) for developed countries and 1:90 for developing countries, and 1:200 for some consultancy roles) consisting off interview cost, recruiter bonus and other expenses.

4. Cost of customer acquisition: Mostly time spent by salesmans, architects, analysts, managers, designers and also representative costs. (Some presales can take 3 years, and all payed from company pocket)

5. Scale and Complexity: While it's still possible to find solo assignment there is a hoard of people who wants to take it, and it's a tiny part of market. 80% of a market it's a long term team play. And customer wants to have a team starting on Monday.

6. Economy of Scale and Offshore: Service providers are able to keep back office costs low while providing flexibility, scalability and risk management.

7. Bureaucrats: There's a ton of bullshit work needs to be done to get a contract (Legal, compliance, certifications), individual contractor theoretically can walk the route, but it will take forever and cost a fortune.

It's harder to compete with leviathans than ever before, but all is not lost. Here's the recipe.

1. Specialization. Focus on one language (Like Java) or even one technical problem (Like migrating to microservices). Focus on one business domain like e-commerce.

2. Sales and Marketing. Make your own blog, linkedin page, youtube, attend conferences, get certificates, talk to your ex-colleagues, managers, customers in a search for new assignments.

3. Market. You probably should avoid big-co's and focus on SMB's. Your ideal company should be small and unregulated internally and externally. Ideally Decision maker should be as far from IT as possible and inexperienced as manager to buy your 2. Sales and Marketing.

4. Convenience. You should emulate convenience to hire you, get yourself a personal assistant and lawyer to make paperwork. Choose trusted location to work from, to eliminate legal risks.

5. Jack of All Trades. Advertise as expert, work as problem-solver, talk to business, make documentation, code, test, build infra, sell your solutions.

6. Play long - stay focused. Onboarding to some roles might take even 6 month, no one needs jobhoppers. Work 1 contract at a time, avoid multi-contracting, better to jack the rate.

7. Build a team. Maintain a pool of few dozen of trusted partners to take on larger engagements.

8. Lazy support. Provide on demand support for solutions you have delivered for stand by cost.

Maybe I have forgot something but for the most part this is it.