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Senior Editor

IT workforce demand lowest in four years

May 05, 20035 mins
Data Center

WASHINGTON – IT workers looking for jobs in the U.S. have nothing to cheer about in the latest workforce survey released by the Information Technology Association of America. Hiring projections for IT workers during the next year are the lowest since 2000, and more than a tenth of IT companies are looking at moving IT jobs to countries with cheaper labor.

The only sliver of good news in the study, released Monday, is that the total number of IT jobs in the U.S. seems to have leveled off, with the number of IT layoffs no longer outpacing the new IT hires projected in the survey. The ITAA study, based on a survey of 400 U.S. hiring managers at both IT and non-IT companies, predicts that U.S. companies will fill 493,431 IT jobs in the next 12 months, compared to projections of 1.1 million jobs in last year’s survey and 1.6 million in 2000. The ITAA projections don’t measure predictions of layoffs and unfilled open positions when projecting the number of IT hires, so the net job growth in the U.S. IT industry will be lower.

“The good news is that it looks like we’ve hit bottom finally,” said Harris Miller, president of the ITAA. “The companies have rightsized about as far down as they’re going to rightsize. That’s not to say we’re going to suddenly see a dramatic upward spike. I don’t think that’s likely to happen, but I do think that there are some indications out there that CIOs are starting to get a little bit of permission from their CFOs and CEOs to start spending a little bit of money again.”

The U.S. began 2003 with 10.3 million IT workers, according to the ITAA, up 4.2% from the start of 2002, but up less than 1% from the last quarter of 2002. The IT workforce appears to have bottomed out at just under 10 million jobs at the start of 2002, the ITAA said, after 500,000 IT job layoffs in the U.S. in 2001.

Sixty-seven percent of those surveyed for the study released Monday said they thought hiring demand would stay the same or decline over the next year.

ITAA began its workforce study in 1997, but started using new methodology in 2000. The number of projected hires is the lowest since the association began using that new methodology, but Miller also called the number a historic low.

The message to IT workers is that the skills expectation bar has been raised “not by inches, but by several feet,” said Clare Dolan, senior director of educational initiatives for Oracle, one of the sponsors of the ITAA study.

IT workers shouldn’t look at increasing their skills as a lifelong learning process, but a daily one, Dolan added. “Because of the competitiveness, you need to be learning daily,” she added.

Asked about moving IT jobs outside of the U.S., 6% of all firms said they already have, including 22% of IT companies with 1,000 or more employees. Fifteen percent of IT firms say they will or might move IT jobs out of the U.S. in the next year.

The jobs most likely to be moved from the U.S. are programming/software engineering, followed by network design and Web development, according to the ITAA survey.

Roy Haggerty, president and CEO of IT staffing firm Ajilon North America, said moving jobs out of the U.S. isn’t cost effective unless it’s for a project that requires hundreds of jobs. Although there are some public relations and other risks involved, he said the trend may continue in the short term.

“During a time when we’ve had a significant economic downturn, cost cutting has been paramount,” Haggerty said. “It will be very interesting to see what happens in three or four years, when our economy goes back into a normal growth mode.”

Miller predicted that moving IT jobs “offshore” to Canada, India or other countries will likely be a controversial subject in the next couple of years. But he didn’t expect a huge move toward “protectionist” legislation, such a bill proposed this year in New Jersey, which would restrict offshore outsourcing for state contracts.

Still, Miller expects debate about the issue during the next U.S. presidential election. “It’s going to become a political issue in 2004… because it’s all about jobs,” he said.

Asked what the U.S. Congress or President George W. Bush’s administration can do to promote IT job growth, Miller called on Congress to pass the president’s economic stimulus package, which originally included $726 billion in tax cuts, including a tax cut on stock dividends.

“This IT (worker) surplus depends a lot on the state of the economy overall,” Miller said. “As long as CEOs and CFOs are fairly negative about the future of the economy, they’re not going to go out and spend money… so that’s the most important thing Congress can do.”

According to the ITAA, the U.S. has 2.1 million programming jobs, 1.9 million technical support jobs, and 1.1 million enterprise systems jobs, the three most common IT jobs on the ITAA’s list.

In a separate study, also released Monday, the ITAA found that women and racial minorities made little progress into high tech employment between 1996 and 2002. Based on statistics from the U.S. Bureau of Labor Statistics, the percentage of women in the U.S. IT workforce fell from 41% to 34.9% in those six years, and the percentage of African-Americans fell from 9.1% to 8.2%. However, when administrative positions were removed from the numbers, the percentages of both groups rose slightly.

The percentage of Hispanic Americans, Native Americans and Asian Americans in the U.S. IT workforce grew over six years, according to the ITAA. Hispanic IT workers went from 5.4% to 6.3%, Native Americans from 0.2% to 0.6%, and Asian-Americans from 8.9% to 11.8% between 1996 to 2002.

Miller called on U.S. universities to encourage more women and minorities to complete undergraduate degrees in engineering and computer science.