IT job market update: Hiring stalled, salaries slashed

Cost-containment remains a primary concern for many IT decision makers, which means IT pros still face salary reductions, potential layoffs and lengthy unemployment stints, according to recent survey data.

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Surveys conducted in May by Dice and separately by Challenger, Gray & Christmas show that employed IT professionals still have reason to worry about job security and unemployed high-tech workers face a challenging job search. Dice surveyed more than 1,900 human resource professionals and recruiters to learn about hiring plans and found that more than 80% of respondents have scaled back plans in light of the current economy. Layoffs continue to worry some 43% who said they were either very likely or likely, according to Dice, while 43% consider layoffs unlikely at this point.

Dice's research also found that those companies with open positions are taking longer to fill them. Half of those polled by Dice said the time to fill open positions has lengthened, and 65% of those said the longer time is due to caution related to the economy. More than 20% cited a lack of urgency to fill open positions, while just 9% said they experienced an inability to find qualified professionals to fill the jobs. More than 80% indicated an increase in the number of candidates applying for open positions, compared to six months ago, Dice found.

"Many hiring managers report that the skill requirements for open positions are more demanding and hiring times are lengthening," said Tom Silver, senior vice president and chief marketing officer at Dice. "While it's not surprising in this economy that companies are being selective, more than 90% of respondents indicated they have at least one hard to find skill set or position to fill."

Dice also queried the technology recruiters and hiring managers about salaries and discovered more than 40% are seeing slightly lower salaries than last year. Another 17% noted that salaries are significantly less than last year. The data in the Dice survey synchs up with a recent poll conducted by Challenger, Gray & Christmas. The outplacement firm reported that more than half of more than 200 human resource executives polled in May said their companies instituted salary cuts or freezes in an effort to reduce costs, up more than 27% from a similar survey conducted in January. And while 86% of companies continue to implement cost-cutting measures due to the economy, the survey found that 43% of employers are making permanent reductions, down from 56% in January.

"Companies may have more workers than they need for current business levels but are reluctant to enact widespread layoffs, knowing that a recovery will mean recruiting and training all new workers," said CEO John Challenger, in a statement. "This may be why we have seen an increase in the number of companies cutting salaries and other perks. It is a lot easier to restore compensation and benefits than it is to re-hire and re-train workers when the economy improves."

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