Study Says IT Job Market Is Stabilizing

ITAA report says both hirings and dismissals slowed in the third quarter.
The IT workforce is stabilizing as both hiring and dismissals of IT professionals slowed in the third quarter, according to a report issued by the Information Technology Association of America.

There was a net gain of 147,000 jobs in the third quarter, but the number of IT workers hired in the past year declined to 1.1 million, according to the study released this week. During the same period, there were fewer dismissals, with 844,000 tech workers dismissed in the 12 months ending in October 2002, compared with 2.6 million in the 12 months ending in 2002.

"Both hiring and dismissals are far below January numbers, which may signal a stabilization of the IT workforce after the roller coaster of recent year," ITAA president Harris Miller says. "We're also seeing more optimism than last quarter on the part of hiring managers as they anticipate their needs over the next year." The total number of U.S. IT workers was up in October to 10.1 million, compared with 9.9 million in January, the report says.

IT managers predict they'll need to hire an additional 1.1 million workers in coming months, roughly on a par with plans at the beginning of this year and an improvement over July projections, indicating improved optimism by hiring managers.

Tech-support workers represent 42% of all IT hires during the quarter, with 152,000 hired. The overall number of network administrators declined 8.5% since the beginning of the year, from 733,000 to 671,000, while the number of Web developers and database developers climbed 5.4% and 5.3%, respectively, since January.

Top tech skills include Oracle, Java, SQL Server, and Windows NT.

But Frances Quittel, an independent technology recruiter known on the Web as CareerBabe, was skeptical. She says she sees the job market continuing to get worse for IT job seekers through the end of the year, and the outlook for 2003 is completely uncertain.

"There was no Santa Claus effect this year," she says. "Usually, at the end of the year there is some rally in the stock market." Companies' revenues are down, and therefore they aren't hiring.

"Companies are waiting, they are not making any plans, they are in hold mode and are trying to figure out how they can wrap up the fourth quarter before moving along," Quittel says. Uncertainty over war in Iraq is contributing to keeping the market down, she adds.

And companies are not innovating; there's no new technology that companies feel compelled to have, as they felt compelled to implement the Internet in the '90s, Quittel says.

"When you're in maintenance mode, you don't need to hire a lot of IT people. You can outsource those jobs. There is nothing driving this economy that is a huge wave of must-have technology," she says.

Where there is hiring, she adds, people are hiring one-off; there's no mass hiring going on.

On the other hand, many companies are interviewing. IT managers are optimistic about being given the green light to start new projects and want to have job candidates ready to hire when the projects are ready to launch, Quittel says. Also, equipment bought from 1997-99 is now fully amortized and may be due for replacement, which would lead to new jobs installing and maintaining that equipment.

She says increased government spending will lead to added jobs in government.