A new study showing a four-year low in the demand for IT workers indicates that prices for IT services will likely come down.
The news is bad for people looking for tech jobs, but for users of IT services, a persistent lackluster need for new IT hires bodes well. A new study showing a four-year low in the demand for IT workers indicates that prices for IT services will likely come down.
This year, the industry will hire approximately 490,000 new workers, less than half the number hired last year, according to a study conducted by the Information Technology Association of America. As IT companies continue to adjust for the lagging economy, enterprise users will likely be able to dictate the terms and conditions of their IT services, said Harris Miller, president of the ITAA in Arlington, Va.
"The customer is in the drivers seat," Miller told eWEEK. "Costs are probably going to continue to come down."
One bright spot in the ITAAs 2003 Workforce Study, which was sponsored in part by Cisco Systems Inc., Microsoft Corp. and Oracle Corp., showed that while hiring is slowing, layoffs are slowing as well.
It is unclear whether the hiring nadir is predominantly a function of the ongoing market correction following the excesses of the 1990s, or whether it is significantly exacerbated by accelerating competition from offshore work forces, Miller said.
Twenty-two percent of large IT companies have offshore facilities today, and to remain competitive, smaller companies will likely follow suit. As other English-speaking nations, primarily India, improved both their telecommunications infrastructure and their marketing initiatives in recent years, they became increasingly attractive, particularly for the more commoditized aspects of IT. There is growing competition from the IT work force in Russia and Central Europe as well, Miller said.
What does seem clear from the study is that the technology sector is not poised for a sharp turnaround in hiring any time soon. "It doesnt bode well for a short-term dramatic recovery in IT jobs," Miller said about the finding.
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