IT sector adds jobs despite economic turmoil

* Government data shows IT jobs increasing as most industries decline

Surprising new findings from the U.S. Bureau of Labor Statistics show that the IT profession may be in far better shape than the job market as a whole.

About 240,000 jobs were lost nationwide in October, and unemployment rates rose from 6.1% to 6.5%. Yet the IT profession actually grew in this time of layoffs. About 5,500 jobs were added in the category of computer systems design and related services, and another 300 jobs were added in the category of management and technical consulting services.

“They grew when everybody else is shrinking. That must tell you something,” says David Foote, co-founder, CEO and chief research officer of Foote Partners, a research group that tracks IT salary and skills. “It’s amazing that those numbers are not flat or going in the other direction.”

IT jobs were slashed in huge numbers during the major economic downturn of 2001 to 2003, Foote points out. The instinct back then was to fire IT people because they were viewed as overhead. What’s changed since then is that large portions of the IT budget have moved into the lines of business, and companies are thinking about IT as it relates to profit and loss, rather than simply looking as IT as an expense, he says.

“More and more IT jobs gravitated into functional specialties,” Foote says. “You weren’t just a programmer. You were a person who was part of a team doing marketing or finance and accounting. You were now part of a functional group within the company.”

If IT workers are seen as enabling the business through technology and improving the bottom line, rather than simply providing a service, they should be more likely to survive job cuts.

Foote says you could argue this trend can also work the other way. If a line of business becomes less profitable in any given quarter, then IT folks could be vulnerable just like sales and marketing reps. But at least in October, the Bureau of Labor Statistics numbers show tech jobs were saved from the general bloodletting that’s ongoing as America sinks into recession.

Lots of businesses have already outsourced purely technical jobs over the last several years, Foote says. IT pros that remain are often architects, analysts, project managers, specialists in key applications like CRM and ERP, or involved in customer-facing duties, Foote says.

“They’re like knowledge workers. Now if you’re going to actually fire an IT person you’re firing a knowledge worker and not simply a body doing systems maintenance or programming,” Foote says.

That’s not to say the IT profession is immune to economic problems. Highly-paid IT senior and middle-management types residing in the lines of business are at the most risk because they make too much money, Foote says.

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Overall, the U.S. high-tech industry added 78,300 jobs between January and July this year, but that’s less than the 111,400 tech jobs added during the same period in 2007, we noted in a recent newsletter

Foote says in the first two quarters of 2009 we may see more companies outsource some IT functions. Any predictions should be taken with a grain of salt, however, because he says it is way too early to tell what will happen on the outsourcing front. IT outsourcing vendors, he adds, have seen a drop in the size of customer deals because of the economy.

Lots of people worry about the impact of jobs being outsourced overseas. That possibility is there if the economic slowdown is prolonged, but offshoring probably won’t happen in great numbers in the short term, says Rajendra Pawar, chairman of NIIT Technologies, an IT training company in India. “I think in the short term, everyone’s in a freeze,” he says. “We’ll have to see how the situation evolves in the United States and Europe, how bad the economic situation gets.”

One question I’m wondering about is whether IT pros will be less likely to pursue certifications in a down economy. Though certifications can improve job prospects, the value of certifications to an IT worker’s salary has been dropping for some time. And training and certifications can cost thousands of dollars, money you might be less likely to spend while your 401k takes a nosedive.

Chris Porter, CEO of U.S.-based Training Camp, an IT training organization, says his business was “absolutely dead” for a couple of days when the stock market was crashing. “The surprise to me was the following Monday everything rebounded,” Porter says.

Demand for Training Camp’s services not only rebounded but exceeded normal levels, according to Porter, who theorizes that the gut reaction among IT pros was to hone their skill sets and resumes to best weather an economic downturn.

Security certifications are among the most valuable, says Foote, whose research firm meticulously tracks the dollar value of IT skills and certifications.

Overall, certification-related pay dropped 2.7% in the six months ending Oct. 1, and 4.3% for the past year, Foote says. Yet the value of security certifications grew 2% for the last six months and 1.9% for the year. IT security is in high demand in both large private organizations and in the public sector, the latter because of government regulations, Foote says.

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Copyright © 2008 IDG Communications, Inc.

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