Wall Street Crisis Won't Impact IT Jobs... At First
The grim meltdown may have a bright side for some financial workers as top-notch IT pros laid off when the tech bubble broke eight years ago were quickly hired.
The shock waves roiling the U.S. economy haven't hit the IT job market yet, but high-tech specialists in demand today will still be in demand when the dust settles over the financial services markets, IT employment specialists maintain in an informal survey.
"There's going to be more high-quality high-tech people on the street," said John Estes of Robert Half Technology, which provides IT professionals nationwide. "A lot of these people are high-dollar folks, and they may not be quite as happy as they were before."
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Estes, who is VP of strategic alliances at Robert Half, said Friday that it is too early to predict what impact the collapse of investment banks like Bear Stearns, Merrill Lynch, and Lehman Brothers will have on IT job markets, but he believes the situation will work its way out over time as people who lose jobs now find new ones. He noted that many of the top IT jobs at investment banks and financial services firms were commanding salaries of $200,000, and they may have trouble matching those figures in new positions.
Many of the IT jobs are located in the New York City area, and Thursday that state reported its unemployment rate jumped to 5.8% from 5% in the biggest monthly increase in 30 years. While many positions are being lost in the financial sector, many IT positions have already been moved to offshore outsourcing facilities. One financially secure bank, J.P. Morgan, avoided offshore outsourcing, so its IT units are unlikely to be negatively impacted by the financial meltdown.
In some ways, the grim meltdown has a bright side for some IT people working in the financial sector. Noting that brokers and financial advisers have been leaving the big investment houses anyway in recent years, John Allen of the Open Finance Network, which supplies a technology platform for independent representatives, said: "While there were some company-specific conditions that drove these [meltdown] events, the truth is that these dramatic events are simply indications of an inevitable and irreversible shift taking place in the financial services industry."
The number of independent brokers and financial advisers began outnumbering the number of brokers employed at the large warehouses like Merrill and Lehman in 2006.
Allen, who is executive VP of OFN, said much of the move by investment banking representatives to independent operations had been propelled in large part by improved technology, with the result that the demise of the traditional Wall Street firms isn't likely to negatively impact IT hiring in the independent firms.
The Open Finance Network supplies front- and back-office technology for independent family offices and broker/adviser operations.
The OFN is headquartered in Charlotte, N.C., which is also the headquarters of the Bank of America, which acquired Merrill Lynch earlier in the week. One IT specialist, who asked to remain anonymous, said he plans to wait and see what the Bank of America will have to offer after the Merrill acquisition is consummated.
Robert Half's Estes said there could be "culture clashes" if high-paid IT specialists move out of New York City to lower-paying positions. "But if you're really good in IT, you won't be on the street for very long," said Estes, who noted that top-notch IT workers who were laid off when the technology bubble broke eight years ago were quickly hired.
Observing that the Robert Half agency reported strong nationwide demand earlier this month for infrastructure specialists -- including help desk workers and technicians -- Estes said employers are still looking for people who can give them a competitive edge in areas like Web 2.0 and business intelligence.
He noted that Robert Half found that both New York City and Charlotte were involved in net hiring in those in-demand positions.
Columnist Doug Smith at The Charlotte Observer had some comforting words this week for any Merrill employees who might move from New York to Charlotte.
"Those New York City dudes will be reporting to a Southern bank in a city where NASCAR rules and pork barbecue is cuisine," he wrote. "I bet those Merrill Lynch investment bankers will like it."
If you want to read more about how other CIOs are dealing with this tough economy, InformationWeek has produced an independent analysis on the subject. Download the report here (registration required).