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270K Fewer Workers Will Have Been Hired In 2004--ITAA

Staffing trends--including offshore outsourcing--continue to strip IT workers from their jobs, according to the trade association.
American employers will hire 270,000 fewer IT workers this year than they did in 2003, according to a poll of 500 hiring managers by the Information Technology Association of America, providing fresh evidence that the IT-labor market continues to weaken.

Offshore outsourcing is having an impact on American IT payrolls, ITAA president Harris Miller suggests.

"This is still not the job market America's IT workers have been hoping for," Miller said Wednesday in prepared remarks announcing the study. "Instead, increased competition appears to be the rule for 2004 here and abroad. The U.S. workforce is not giving up its edge without a fight, but as an industry and as a nation, we must become more competitive if we are to retain our standing as the world's innovators."

Though the forecast is grim, IT employment rose between the first quarter of 2003 and the first quarter of 2004, albeit by a paltry 2%.

Nearly nine in 10 of those new jobs came from buying companies, not IT vendors. Banking, finance, manufacturing, food service, and transportation companies provided the bulk of IT employment, accounting for 79% of the IT workforce.

Despite a general improvement in the economy, the report states, employers remain cautious about hiring. Some employers blame climbing employee-benefit costs for the slowdown in hiring. In addition, savings brought on by offshore outsourcing and new technologies and business models mean employers can continue to be productive without hiring new personnel.

The ITAA poll isn't the first evidence of a weakening IT-labor market. An InformationWeek analysis of Department of Labor data last month also showed a shrinking American IT workforce. That analysis revealed that the number of employed IT professionals has decreased by nearly 7% in the past three years as IT unemployment nearly doubled. The analysis of government data shows an IT workforce of 3.57 million Americans. ITAA uses a broader method of calculating the IT workforce, which it says approaches 10.53 million.

Other key findings of the ITAA study:

• The Northeast added the largest percentage of IT jobs--5%. IT employment fell in the West by 0.7%. IT employment grew in the South by 4%, and it remains home to the largest number of IT workers in the nation: 3.13 million. IT employment in the Midwest edged up 2.6%.

• Technical-support and network-system-design categories saw the largest year-to-year increases in employment, up 5%.

• Employers place the hiring emphasis on a solid track record. The best background for IT jobs appears to be previous experience in a related field and a four-year college degree in a related field.

• Personality is crucial. Interpersonal skills drew the most votes from companies of all sizes--twice as important as project management or team building.

The ITAA-commissioned random survey of 500 managers responsible for hiring IT personnel took place between Feb. 24 and March 23. The margin of error in the survey is plus or minus 4.4%.