The U.S. job market showed a 3% drop in IT jobs last quarter, showing a tech economy that hasn't been able to sustain an employment recovery.
It's not a disaster. With 3.9 million IT pros employed, the U.S. economy has clawed back many of the nearly 300,000 IT jobs lost in the recession, according to the quarterly report from the Bureau of Labor Statistics, based on household surveys. Employment is up 5% from the lowest point in the recession. However, employment's still below the peak of 4.2 million IT jobs in middle of 2008, before the banking crisis and recession hit. Like the broader economy, the IT sector is struggling to create jobs.
IT unemployment stands at 4.5%, compared with 4.9% for professional and managerial workers overall. The IT employment numbers are based on eight IT job classifications used by the BLS. The three largest categories are software engineers, computer scientists and systems analysts, and IT managers. The three categories that have grown the most since the same quarter a year ago, are network and system administrators, software engineers, and IT managers.
Companies are often turning to consultants and contractors to meet their project needs, one specialist on IT employment says. That’s likely in part because the economic uncertainty makes them reluctant to commit to new full-time hires, but it's also because they're under huge pressure to deliver results quickly.
David Foote, CEO of the IT employment specialist Foote Partners, tracks a different set of BLS stats, which look at jobs from the employer side. There, the data shows September marked the fourth straight month in which employers report adding jobs. But 68% of the jobs were created in the Management and Technical Consulting Services segment. Writes Foote:
"… businesses are looking to the IT services industry to help them get their work done and this has created some healthy jobs growth in this sector. They're not depending entirely on consultants and managed services---many of our clients are indeed also hiring workers with specific skills and experience---but it's clear that demand for full time workers outside the services sector in particular has not gained the kind of momentum that many analysts and pundits had been predicting earlier this year."
Foote wasn't among those optimists and has consistently warned that IT jobs wouldn't see meaningful growth before mid-2011.
We are seeing--by anecdote and data--that IT spending is loosening up a bit. We saw a clear uptick in growth-oriented projects in an InformationWeeksurvey this spring--36% expected to introduce a new IT-led product, twice as many as in 2009. We saw signs of growth in our InformationWeek 500 data, with 57% expecting IT spending to rise in 2010, and just 20% expecting to cut spending. Last year, 42% expected to cut. Gartner estimated IT spending would rise just over 1% this year, compared with an 8% cut last year.
However, most of this budget loosening only looks good compared with the death grip on spending we had in 2009. Kind of like this quarter's IT employment numbers.