When it comes to drawing a bead on IT employment, the numbers say one thing but the feelings say another.
In the numbers department, Nik Theodore, director of the Center for Urban Economic Development at the University of Illinois at Chicago, co-authored a recent study using data from the U.S. Bureau of Labor Statistics and the Current Population Survey. His conclusion: Employment in the IT industry is trending downward, and the future is uncertain.
The study, “America’s High-Tech Bust,” specifically examined employment in areas such as software publishing, computer systems design and data processing rather than, say, IT jobs in financial services. From March 2001 through April 2004, the number of jobs lost in such areas topped 403,000.
While the reasons for the job losses during the recession (which began in March 2001 and ended, officially, in November 2001) had a lot to do with post-Y2K spending cuts and the popping of the Internet bubble, Theodore posits that the ongoing stagnation is due to three factors: business’s increasing tendency to buy off-the-shelf rather than build its own software, offshore outsourcing, and the reluctance of companies to hire in an uncertain economy. And because the trends toward outsourcing and buying off-the-shelf show no signs of slowing, “that would suggest we haven’t hit bottom yet,” Theodore said.
But others watching the employment picture are more sanguine. Since May, staffing company Hudson Global Resources’ “Hudson Employment Index” (a monthly phone-based survey designed to measure workers’ confidence in the employment market in a number of industries) has shown growing hope among IT workers, according to Kevin Knaul, executive vice-president of Hudson’s IT and telecommunications practice.
Indeed, says Knaul, IT workers are more optimistic than workers in other industries. In the August survey, 37 per cent of IT companies had hiring plans versus 33 per cent in other industries. As for personal finances, 51 per cent of IT workers said theirs were improving; 45 per cent of other respondents said the same.
And while Knaul acknowledges that worker sentiments may be on the rise given IT’s recent dismal history (where else can confidence go but up?), he is hopeful that perceptions do in fact reflect a new reality. Among Hudson’s offices, an upswing in business lends credence to what Knaul is hearing from the workers themselves.