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3/4/2003
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Critical Path

Workers worry the IT career path has become less promising. That's bad news for the industry. Second in a three-part series.

Christopher Connor, a database administrator with bachelor's and master's degrees in computer science and 27 years' experience, is convinced the dynamics of the IT profession are forever changed. Unemployed since July, Connor is encouraging his 23-year-old son, a Linux specialist, to learn new skills. "I would strongly discourage anyone who wants to get into IT," Connor says. "If they have the engineering aptitude, go into other areas, like designing airplanes, cars, bridges. Anything but software."

It's not just the unemployed whose faith in the IT career path has wavered. Mary Cinotto is gainfully employed as a database engineer for one of the world's largest computer companies, and she gave similar advice to her niece in college. Like Connor, she's concerned about layoffs and the number of technology jobs that are moving offshore--both of which are happening at her company, in order to cut costs. "I encouraged her not to go into IT. Go get yourself a skill you can market," says Cinotto, whose niece has since shifted her focus from computer science to accounting.

How could this happen? Just three years ago, technology was the "it" field, where skilled professionals commanded double-digit signing bonuses on top of six-figure salaries. Now a wave of pessimism has hit the IT industry, brought on by corporate cost-cutting, close scrutiny of IT projects, and competition from lower-paid IT workers in India, Russia, and elsewhere. How bad is this funk? Seven out of 10 IT professionals say the IT career path isn't as promising as it was five years ago, according to a survey of more than 15,000 IT people for InformationWeek Research's 2003 Salary Survey, the complete results of which will be published next week.

There's much more at stake here than fear and frustration. For leaders of IT organizations, the pessimism permeating the industry raises concerns that the field won't attract the best and the brightest young people, or that it could lose some of today's top talent. It raises issues of how to motivate people if they don't see the opportunity for growth in the industry or their companies. And if declining college enrollments persist, it creates the possibility of an IT talent shortage.

For IT workers, the biggest question is whether this is more than a trough in an economic cycle. Global sourcing of IT work won't go away. And while businesses' IT budgets might loosen if the economy improves, IT departments will emerge from this cost-cutting session as much leaner organizations not likely to return to the free-spending ways of recent years. Connor is one of many IT professionals facing up to the fact that, to some degree, the change is permanent. Unhappy with management at his old job, Connor left to work as an independent contractor just when companies were clamping down on all but vital IT projects--and in particular restricting the use of contractors. "I had no idea that suddenly the rules had changed, and the people in charge of these companies were saying, 'We can't afford to do IT anymore,'" Connor says.

Offshore outsourcing may be only one of the challenges facing U.S. IT workers, but it has certainly become the lightning rod. The topic invariably comes up in any discussion about IT employment, and many unemployed are furious. "IT workers should unionize," Connor says. "Then we'd have a better chance at negotiations, rather than being picked off one by one." But even those employed, like Cinotto, wonder if their jobs will be the next to get cut or sent overseas. "I'm just doing my best and pedaling as fast as I can," she says.

Harris Miller, president of the Information Technology Association of America, acknowledges that the industry has changed, but he says the employment woes are temporary and that other industries have weathered similar historic moments of doubt. The ITAA, a trade association representing the IT product and service industry, released a study earlier this month with job-search firm Dice that found U.S. companies hired 265,000 IT workers but cut 168,000 tech jobs in the fourth quarter of 2002, for a net increase of 97,000 new jobs. That's surprising, perhaps even counterintuitive, given the poor economy. But the trend isn't up. Consider that in the third quarter of last year, the industry had a net gain of 147,000 jobs, the ITAA says.

For Rick Halpert, IT labor cost-cutting has become a fact of life. The Lotus Notes administrator has been employed as a contractor with a large consumer-goods manufacturer for more than three years. But he's been told by management that the company is looking to replace him within the next few months with another contract worker, probably from India, who will come here on a work visa and earn about $20 less per hour than what Halpert is paid. Meanwhile, Halpert is being asked to train his replacement. "Frankly, I don't have a problem with outsourcing. The wrinkle here is now they're bringing in people from other countries to work for half price," he says. Still, Halpert isn't too worried about finding another job. "I'm up to date on the latest skills," he says.

History doesn't offer a comforting picture of how lower-cost international competition can change a domestic IT industry. Miller notes that offshore manufacturing in industries such as automotive didn't have the long-term, crippling effects on the economy and the U.S. workforce that some had predicted. Yet those forces did bring a painful period of job loss and readjustment in many communities that suggests the challenges facing the IT industry are just beginning. And other domestic industries, from textiles to steel, have been decimated by foreign competition. Miller acknowledges the competition and says the IT community needs to accept the challenge. "Perhaps there was a false sense of security or arrogance that this work would never go offshore, but there's real competition now, and the industry will just have to adjust to that," Miller says.

But even as workers fret about their jobs, there's concern among IT leaders about a shortage in the future--especially of the very best people. ITAA's report says hiring managers predict they'll need 874,327 more IT workers in the next 12 months, an 8.5% increase. In 2002, ITAA estimates the number of IT people in the workforce grew only 3.3%. "Some people say, 'I'm unemployed right now. How could there be a shortage?' But their outlook is today and tomorrow," Miller says.

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