Labor Department Statistics

During the 2000-2010 decade, the Bureau of Labor Statistics predicts, eight of the 10 fastest growing jobs will involve computer technology. Clearly, the world is becoming more wired and consultants who can help users adopt new hardware and software products and resolve problems will not have a difficult time finding work.

InformationWeek > IT Jobs > Tech-Job Upheaval > August 2, 2004

Tech-Job Upheaval August 2, 2004

While the total number of IT pros is down, the future is looking better for the highly skilled.
By Marianne Kolbasuk McGee and Eric Chabrow

.T. employment in the United States is in the midst of fundamental change. Joblessness has nearly doubled in the last three years, while the number of Americans calling themselves IT professionals has decreased by nearly 160,000.
Behind the overall stats--the latest from the Bureau of Labor Statistics--is a shift in the makeup of the nation's IT labor force. The number of programmers, analysts, and support specialists has fallen 15% since the first six months of 2000, while the ranks of managers and administrators grew 56%, according to InformationWeek's analysis of the bureau's numbers.

The market for IT people with specialized expertise is on the upswing, says Larry Stofko, VP of IT strategy and innovation at St. Joseph Health System, which runs 15 hospitals in California, New Mexico, and Texas. The hospital group is looking for a few people with health-care expertise in WANs, Web-based enterprises, and thin clients; it also needs as many as seven high-end project managers and process specialists with expertise in the clinical, business reengineering, and IT side of health care, Stofko says.

"It's very tough to find solid, qualified subject-expertise people," he says. That's the sort of talent a company typically would contract out, but St. Joseph wants to hire that expertise in-house.

At the job market's apex three years ago, 3.47 million of the 3.57 million Americans identifying themselves as IT workers held jobs; this year, that's down to 3.23 million employed out of 3.41 million. IT unemployment, which was less than 3% in 2000 and 2001, has stabilized between 5.5% and 6% in the past three years. Tech manager jobs have grown faster than any other IT job category, up 54% in the last four years. Still, managers account for only 10% of employed IT workers, up from 6% four years ago.

Project managers are in demand in Utah, says Joel Erickson, a senior project manager at a national beauty-products distributor. As a member and former president of the north Utah chapter of the Project Management Institute, he's seeing an uptick in demand for people with these skills. Erickson's company has had two IT staff reductions in the last few years and a two-year IT hiring freeze. Now it's adding staff, including a project manager.

The number of employed software engineers--the largest IT job category, accounting for nearly a quarter of IT workers--grew nearly 7% to 791,000. Other categories with increasing numbers are database administrators and network- and computer-systems administrators.


Some companies need to fill critical positions vacated by foreign IT workers whose H-1B visas expired earlier this year and couldn't be renewed because fewer of those visas were available as of last year. That's the case at Sutter Health, which runs hospitals in California and is looking nationwide for "hard-to-find talent" with clinical-systems expertise, says senior VP of IS and CIO John Hummel. "We've recognized there are a lot of people here in the U.S. to hire."

Where employment is down--programmers, computer scientists and systems analysts, network-systems and data-communications analysts, and support specialists--offshore outsourcing gets much of the blame. This is particularly true for programmers. "There's been hundreds of thousands of these jobs created in India, the Philippines, and other places," says Howard Rubin, executive VP at Meta Group and professor emeritus of computer science at the City University of New York.

In a recent study of the 100 largest New York companies, Rubin found that 70% offshore some work--predominately programming and support--and, within the next two years, 90% plan to do so. Most companies look at the potential cost savings of outsourcing only in terms of salary differentials, Rubin says. When other costs, such as remote management and infrastructure, are figured in, moving to nonurban U.S. locations can be a more cost-competitive option.

But offshoring is well entrenched and not limited to lower-skilled jobs. The Washington Alliance of Technology Workers, a labor group trying to unionize high-tech workers, last week said it had obtained internal Microsoft documents that indicate the company is increasing the number of offshore contractors working on projects, including its Longhorn operating system. "It's a product several years away from release; it's a next-generation product that's the backbone of the company," says Marcus Courtney, WashTech's president and organizer.

Microsoft says all development work on Longhorn is done by its own employees, although they aren't necessarily U.S. based. Any work done by offshore contractors is on tasks that don't involve development or the creation of intellectual property, a company spokeswoman says.

There are signs of impending domestic IT job growth. In a recent study, Meta Group concluded that the best IT jobs are staying in the country and that IT hiring should pick up at the end of this year or early next.

Last week, IBM said it would retrain 3,000 employees whose jobs were sent overseas rather than lay them off. Microsoft plans to hire 7,000 employees--4,000 in the United States--during the fiscal year that started July 1, and CEO Steve Ballmer said at the company's annual meeting with financial analysts last week that it's beating IBM by a large margin in hiring candidates with job offers from both companies and nabbing more than half of those with offers from Microsoft and Google Inc.

Twelve percent of CIOs in the Western North-Central and mid-Atlantic regions plan to increase hiring this quarter, but nationwide only 5% plan increases, says Katherine Spencer Lee, executive director of Robert Half Technology, an IT staffing firm. Among the hottest skills sought are security, .Net, Java 2 Enterprise Edition, and areas related to technology refreshes. "We're not on a rocket ship to the moon," she says, "but there's been a fairly significant uptick" in the placement requests.

That's good news for Mike Meder, who was laid off nine months ago from his senior programmer and project manager job at the mainframe disaster-recovery center of a major insurance company in New Jersey. With 30 years in IT, 50-year-old Meder plans to move to Greenville County, S.C., where housing costs are 60% less than in New Jersey. The region is "growing by leaps and bounds," Meder says, and he hopes to find an IT job. Short of that, he'll take anything--"even moving boxes at a Home Depot," he says. "But hopefully, it won't come to that."

-- with Larry Greenemeier and Aaron Ricadela

InformationWeek > IT Jobs > Business Technology: The Death Of American IT Has Been Greatly Exaggerated > August 2, 2004

Business Technology: The Death Of American IT Has Been Greatly Exaggerated > August 2, 2004: "Business Technology: The Death Of American IT Has Been Greatly Exaggerated Aug. 2, 2004 "

By Bob Evans


Polar-opposite rhetoric isn't limited these days to political races; it's rampant in the business-technology world in discussions of workers and jobs. Bob Evans notes you can find a study to support your argument, and maybe even a bill wafting its way through the Senate.

It's the season of political conventions, and in that spirit, it's probably a good idea to immerse ourselves in some totally contradictory findings. As we float amongst the dissonance--confidence is up, but so is insecurity about jobs; some folks feel that offshore outsourcing is sweeping the country and turning us into a nation of brainless, futureless twits, but outsourcing also "is a little bit of a myth," according to the author of a recently released report on IT staffing and compensation--we would do well to remember that IBM founder Thomas Watson once opined that the total worldwide customer target base for the company's large computers would be about six.


We have a bill being introduced in the U.S. Senate that would create a commission (bipartisan, of course, and blue-ribbon, of course; speaking of that, have you ever heard a commission described up front any other way--perhaps, say, as knuckleheads, morons, and dimwits, nitwits, and halfwits, for whom Harvey Korman clamored in Blazing Saddles?) to study the impact on the U.S. economy of changes in the global economy, including those stemming from offshore outsourcing. "Our entire innovation ecosystem is under stress, including the ties between basic research and commercialization, competition for capital and technology, and adaptive business models," said the bill's sponsor, Sen. Joseph Lieberman, D-Conn. "This 21st-century rat race--constant insecurity, constant competition, and constant change--presents an opportunity for all, yet it will be a nightmare for the unprepared." (Rat race? Is that what global business is these days?) So look for some millions of your tax dollars to be plowed into this nonsense that sounds like it might be out of Blazing Saddles as well: "the panel--known as the Commission on the Future of the United States Economy--would be charged with analyzing the impact of global economic changes on the American economy, including offshore outsourcing, and offering nonpartisan proposals to preserve our innovation infrastructure and create more high-wage American jobs." Feel better now? More confident and safer in knowing that this boffo panel will tell businesses how to keep you and them from becoming irrelevant? Well, in the off chance that it doesn't allay your fears, then consider this: The Meta Group advisory firm has recently released a study on IT jobs and concludes that not only are the best business-technology positions and professions staying right here in this country, but also that hiring in the IT sector should begin to pick up by the end of this year or in early 2005. (Memo to Sen. Lieberman: Thanks for offering to play nanny to our free market, but perhaps this is an instance where the all-too-visible hand of the federal government should stay in its pocket and just let the unmatched innovative and entrepreneurial spirit of the American worker work this out.)

Meanwhile, my colleague Eric Chabrow, who's been covering employment issues for us on a daily and sometimes hourly basis, reported late last week that an InformationWeek analysis of just-released employment figures from the Bureau of Labor Statistics shows some additional contradictions. While the overall IT workforce has shrunk by 160,000, certain job categories are growing. The number of IT managers soared by 54% from 2000 to 2004: from 212,000 four years ago to 326,000 today. But before you start campaigning for a promotion, Eric says this growth market has a wrinkle: The way the government classifies certain jobs, someone could fall under the category of "manager" but not supervise anyone.

And then we have the findings of "The State of the IT Industry" research study by InformationWeek's sibling, TechWeb, which shows that in an online survey of more than 1,000 IT respondents, about 52% have little or no concern that their jobs will be eliminated or sent offshore; 19% are mildly to moderately concerned; and 29% are very concerned. At the same time, though, most of those respondents also said they expect a raise this year, and 20% of them said their companies plan to invest in "significant" hardware and software upgrades both this year and next, while another 65% expect to be purchasing moderate upgrades to their hardware and software. So 85%--that's not a bad number of companies to be buying new stuff over the next 18 months.

So in light of all that, when we asked in another survey (this next one being informal, but still drawing 541 respondents) which business-technology issues would be figuring into which presidential candidate to vote for in less than 100 days, we weren't surprised--but perhaps should have been--to see that offshore outsourcing topped the list, followed in descending order by job creation and retraining, privacy, IT security, Internet taxation, H-1B visas, technology innovation, electronic medical records, and, at the bottom, universal access to broadband.

Are there any hot IT job areas other than manager? Quite a few: According to the Meta study, senior program director Maria Schafer highlighted Internet-related specialists, particularly those with expertise in application development, Java-application management, and networking; and, CRM and ERP specialists. From the Bureau of Labor Statistics, the number of software engineers employed in the United States grew from 742,000 in 2000 to 791,000 today, a jump of 7%; database administrators are up nearly 90%, from 47,000 to 89,000; and network-computer systems administrators jumped 31%, from 133,000 to 175,000.

Meanwhile, our very own 2004 National IT Salary Survey revealed that "while some IT professionals report that they would explore a job opportunity if one arose, few are actually looking for a change in venue. Three in five tech staffers and managers report no interest in job hopping. In fact, job tenure is up. IT staffers have an average of five years with their current employers, compared with three years at their previous companies. IT managers report an average of six years, two years more than at their last employers, where they worked an average of four years in total."

So you tell me--does all this sound like a profession in crisis? Is this a description of onrushing irrelevance? Will the profoundly overused "nation of hamburger flippers" cliché come to pass, or is it an absurd canard perpetrated by those who either know nothing of what they're saying, or for some reason are intentionally trying to distort the issue?

I think the excessive hand wringing over The Death of IT needs to stop. Have a lot of people left the field? No doubt. Has there been enormous pain and difficulty among many whose skills didn't match up or whose employers sought lower labor costs? Definitely. But that's consistent with what happens in a country of explorers and adventurers and risk-takers and free-market entrepreneurs. And I yield the floor for a closing comment to a guy who knew a thing or two about adventurers and risk-taking, Mark Twain: "We are called the nation of inventors. And we are. We could still claim that title and wear its loftiest honors if we had stopped with the first thing we invented, which was human liberty."

August, 2004

When is it going to get good again?

When I'm asked this uestion, it usually means, "When am I going to get a job again?" For some people it's, "When will salaries (or billing rates) get good again?"

The answer is . . . things are improving and, barring terrorist attack, will get better next year regardless of who is elected.

Although markets don't like uncertainty and that's what happens if Kerry is elected.

Look, you can't put the genie back in the bottle about offshoring any more tha you an tell a manufacturer not to build a car or a shirt in a cheaper market. It reduces the cost and allows more American consumers (and foreign buyers, too) buy the shirt or car. Same thing with offshoring.

So, wages will be lower for a while . . .althouhg we are starting to see some companies raise rates and some raise salaries.

What are companies looking for? Business knowledge as well as technical experience. Training is not enough. Experience si required. For example, a project manager with fixed income experience. A developer with J2EE and equities. Network professional and financial services experience.

There are a lot more consulting assignments and rates are mediocre at best. Full time salaries are up a few percentage points.

Sought after skills? The list of requirements in a job spec are still pretty long. It's not just J2EE and business knowledge as in the example above. Its about 5 or 6 skills plus business knowledge.

But firms are finding these people and hiring them.

And that is different from a little while ago when the list was onger and firms were interviewing and NOT hiring.


And evertything changes if there is a terrorist attack.