IT Sector Posts Employment Gains, Volatility Remains: Report

Leading all segments were gains in management and technical consulting services and computer systems design.

U.S. employment numbers released Jan. 7 by the Department of Labor's Bureau of Statistics revealed a net gain of 9,600 in IT-related jobs in December, representing the seventh straight month of positive job growth in IT labor segments in federal employment data.

Five bellwether IT job segments in the BLS data showed a net gain of 45,800 jobs in the last six months of 2010 and 26,000 jobs in October through December. Leading all segments were gains in management and technical consulting services and computer systems design and related services segments, which accounted for 89 percent and 85 percent, respectively, of all new jobs created.

Jobs in the data processing, hosting and related services segment added 200 jobs in December, the worst performing segment in the month. Two job segments in the computer and electronics products industry category added jobs: communications equipment (+500 jobs) and computer and peripheral equipment (+700 jobs).

"The services industry has been on a steady roll since last March; in fact, nearly 95 percent of all new IT-related jobs created since March-54,600 of 56,000 jobs according to federal job loss data-were recorded in the management and technical consulting services and computer systems design and related services segments," said David Foote, CEO and chief research officer at IT analyst firm Foote Partners. "I don't want to overemphasize CIOs' dependency on contractors, consultants and managed services; indeed, they're also making key hires in many areas. But it's clear that demand for full-time workers outside the services sector has yet to experience the kind of momentum witnessed in services jobs."

Foote noted that what the federal government numbers hide are thousands of IT jobs created in other areas of the enterprise that are not considered the traditional IT workforce. "These people are working in business lines, corporate departments, and in various enterprise strategic and operation functions whose jobs require skills well beyond technology," he said. "We believe there are an additional 16 to 20 million IT professionals in the Department of Labor employment statistics on top of the 4 million technical, back office and infrastructure workers who are identified by the government's archaic definition of IT professionals."

Fourth-quarter 2010 volatility in skills and certifications values measured 29.1 percent, an increase of four points from the previous quarter. This represented a return to high volatility rates in the first half of 2010 but less than the record-setting 38.7 percent volatility during summer 2009. Noncertified and certified skills volatility this period-34.7 percent and 23.1 percent, respectively-represents a return to elevated values earlier this year following a brief decline in the third quarter.

"In our IT employment market analysis released last month, we noted that volatility remains the dominant trend right now for IT skills as well as jobs," Foote said. "We've been seeing 28 percent to 38 percent volatility since early 2008 in our quarterly surveys of premium pay for certified and noncertified skills, which is defined as the percent of the 466 skills we survey. Typical quarterly volatility falls in the 14 percent to 19 percent range."