One of the great myths of the contract world is that it is less stable than being an employee. While it's true that contractors are usually the first to go during corporate downsizing, and rightfully so, employees are not immune. We've seen multiple waves of layoffs in the tech downturn over the last couple of years. In fact, many were blindsided when approached by HR, and many had been with their company for so long they were sure it was the last place they'd ever work.

But most of the contractors I know were employed during this time. Doesn't it seem strange to you that a lot of permanent people were out of work, but the "temporary" help were able to find work and keep it? The reason is that contractors are better suited to weather a difficult job market, and here's why: contractors are used to finding a new job.

You get used to the interview process.

The typical contract position lasts 12 months, but can range from a short 2 months to a long 2 years. Because you're constantly jumping from job to job, you're interviewing quite often, so you're bound to get good at it or be out of work a lot. I even have a good friend who goes on interviews for jobs he knows he's not going to take just to practice.

Changing markets direct your education.

Interviewing often gives you a chance to gauge the needs of many companies in a short period of time as well as giving you a good overview of the technology direction of the marketplace. Knowing what type of positions will be available by the end of your current (or next) contract allows you time to get up to speed on an array of emerging technologies. This also puts you in the drivers seat if you can find ways to use those technologies to benefit your current employer and give yourself some experience at the same time.

90% of the time you will know exactly when you're getting laid off – under any market conditions.

I've seen a few cases where a company has terminated a contract early, but for the most part in a financial squeeze your contract simply doesn't get renewed. You continue working until your contract end date and then hit the pavement for a new position – just like you'd planned to anyway. Assuming you're doing a good job and have a good working relationship with your manager, only a foolish company will cut a consultant without the standard two weeks notice. (If you're argumentative, lazy or a potential security risk it's a totally different story.)

I can't verify the validity of this story, but I heard years ago that IBM had a contract team working a project that was supposed to continue for another couple of months. When the project was cancelled every contractor got 2 weeks severance pay. Strictly speaking that isn't necessary, nor should you expect it since contracts are usually written with "terminate at-will" clauses, but let's face it – that's just downright cool.

But the story doesn't end there. When IBM lump-summed the severance payment to the agency that was brokering the contract in the first place the agency decided not to pass it on to the consultants who did the work. I don't know about the legalities of the issue, but when IBM found out they told the agency that they would never work with them again if they didn't make it right.

Now if IBM ever offered me an interesting contract I'd snatch it up in a heartbeat.

Stories like these are prevalent in the world of contracting. It's a much smaller community than you might think - and we know the good companies from the bad.

Networking leads to employment.

Speaking of being a small world, I've received many of my jobs through other contractors that have recommended me, and I've recommended many of them too. We really do stick together, although it's vitally important for your own credibility to only recommend those that you yourself would hire. We switch jobs all the time and are constantly networking with other contractors about past and future positions. We share skills, theories on industry direction and pool knowledge on the latest technology.

Most importantly we know lots and lots of hiring managers. If you are a manager looking for a contractor to fill a spot I would start by asking your existing contractors if they know anyone else who would fit the position before you spend a lot of money advertising for it. Chances are good they know someone who is willing to work with you through your vendor of choice or even directly.

Contractors are more flexible.

Few contractors I've worked with get an ego when it comes to hourly rate or location. While we all have our income and geographic preferences we are willing to negotiate much more than most full time employees I've seen. When the market is bad we'll take a pay cut and travel further to the office to stay employed, while many traditional jobholders are lost when they find themselves cut from the corporate payroll.

We barely blink an eye when we need to take a 3 month contract to get us by while others are looking for a career-building ladder-climbing shark infested political replacement position. When the market is good we hold out for better positions, pay and location - and because we are experienced in switching jobs often we are more likely to get them sooner.

While contractors may seem to be less stable than permanent employees I believe the opposite is true. We are used to interviewing regularly and our résumés are almost always current. Our educational opportunities are driven by the marketplace and are much more in tune than the view any single company can give - and if that's not enough, we have the huge benefit of networking. All of that leads to being better able to find work in a difficult job market, and also being in a better position to take advantage of a good market as well.