* Mission-critical jobs safe, discretionary spending at risk
The economic crisis seems to be getting worse by the week. Should IT pros be worried about getting laid off? The possibility certainly exists, especially in the financial sector, but some job market observers say there have not been widespread impacts on IT workers so far.
Outside of the financial services segment, “we haven’t seen it trickle down into hiring of IT resources … as much as we would have thought by now,” Sean Ebner, vice president of professional services for Technisource, told me recently. “There still seems to be a healthy demand for technology resources.”
IT executives remain cautiously optimistic overall, David Foote, CEO and chief research officer of IT workforce research firm Foote Partners, said in an interesting interview published by Computerworld this week.
But about 40% of companies have cut their 2008 IT budgets, Foote said. “Bottom line, considering the lag time between business decisions and direct labor-market effects, we won’t see much IT workforce reduction or jobs being outsourced this quarter, except perhaps those that are bankruptcy-related,” Foote told Computerworld. “But starting next year, thousands of permanent IT professionals will be incrementally cast off from employers large and small. Many will find new employment, join the ranks of the ‘partially employed’ or return to school. This isn’t a big deal, though, considering that the overall size of the U.S. IT workforce is approximately 4 million.”
There are certainly some bad signs for IT pros. A survey of 50 CIOs found that one-quarter has decided to freeze IT hiring, Network World’s Denise Dubie reports. 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, according to a report based on Bureau of Labor Statistics data.
“This is the fourth straight year that the U.S. tech industry is adding jobs,” CEO Christopher W. Hansen of the AeA technology trade association said in a press release. “But the pace of growth is slowing, and given the economic downturn and current disruption in the financial markets, future job growth will be – at best – uncertain.”
Numerous venture-backed companies have announced recent layoffs, according to the Dow Jones VentureWire Alert. Online video company Heavy cut 14% of its staff, while layoffs have also been announced at Wikia, Hi5 Networks, Pandora Media, SearchMe, Zillow.com, Jive Software and others, Dow Jones said.
Ebner of Technisource, which does technology recruiting and staffing, says even if the economic downturn worsens substantially there are certain types of IT jobs that will remain safe. IT pros who maintain networks, servers or ERP systems like SAP or PeopleSoft should feel confident, he says.
“The folks who know the guts of how those platforms operate, those jobs are safe,” Ebner says. “In a market downturn, discretionary roles are the ones that are most at risk.”
In an economic downturn, businesses are less likely to pursue new application development projects, putting some jobs at risk, Ebner notes.
Foote also noted that non-mission-critical projects are likely to be put off, unless the payback period is 12 months or less. IT workers involved in mission-critical areas – such as daily operation of core networks, strategic applications, disaster recovery and security – shouldn’t suffer too much, he said. Skills that remain in high demand include business analysis, project and vendor relationship management, storage, security, data management, mobile operations and virtualization.
“Some independent consultants may suffer, but the diversified, global IT services vendors will suffer only minimally and will continue to hire to fill demand,” Foote told Computerworld. “Job losses overall will be industry-driven, surgical and well thought-out.”
Hopefully, the $700 billion bailout plan Congress designed for the U.S. financial system will accomplish its goals and stabilize the economy. There are already signs that the weak economy is affecting IT vendor profits and the spending of IT departments, and if the stock market keeps falling there’s certainly reason for employees to worry. But it’s probably too early to tell just how long it will take for the economy to recover, and how extensive the impacts on the IT industry will be, as Pund-IT analyst Charles King told me recently.
“It’s not clear to me whether or not we’ve hit the bottom of the trough yet,” he said. “The further it goes down from here, the longer it will take to recover.”
