IT Work Force Contracts

According to the ITAA, the U.S. work force shrank by more than a half-million workers in 2001. the hopeful news: IT hiring managers are forecasting happy days around the corner.

First, the bad news: The U.S. IT work force shrank by an aggregate of 528,496 workers in 2001, with companies hiring 2.1 million IT workers while laying off about 2.6 million, according to the Information Technology Association of Americas third annual IT work force study released Monday. Next, the hopeful news: IT hiring managers are forecasting happy days around the corner, according to the report, with aggregate demand for 1.1 million IT workers in 2002.

If hiring managers live up to the expectations expressed in the report—based on phone interviews with 532 hiring managers--it will mean the IT job market will have risen from the dead—or at least the comatose—with demand for IT professionals increasing 27 percent this year over last. But even that rebound wouldnt put the IT work force back where it was in 2000: Its only 71 percent of the number of IT jobs that needed to be filled just two years ago.

While demand for IT workers may be on the upswing, hiring managers--as they have in the past--said a significant number of open positions will go unfilled because of a chronic gap between the skills required by hiring organizations and the skills possessed by most applications. In fact, half of those 1.1 million jobs that could be added will go unfilled due to the skills gap, the report said.

The ITAA, an Arlington, Va., trade group representing IT product and service providers, has historically used this purported gap as ammunition in lobbying for increases in the quota of H-1B visas, which allow hiring organizations to use IT professionals from outside the United States. With the H-1B quota due for consideration before Congress again next year, the ITAA plans to ask for another increase in the quota despite the rough 2001 experienced by many laid-off IT workers.

"Theres lots of individual workers and companies showing pain," granted ITAA President Harris Miller. "Thats what the data show. But we dont want to make a mistake and repeat what occurred 12 years ago when this country went through a recession. … The conclusion reached—and it was false—by education and by companies was that we didnt need people with technical skills."

Besides planning to increase hiring, managers are also turning to other sources for their IT needs. Indeed, the report cited a 17 percent increase in outsourcing in 2001 compared to 2000. And, according to experts, increasingly that outsourcing is coming from offshore providers. According to a separate study by Meta Group Research Fellow Howard Rubin, the United States share of the estimated 5 million global IT jobs is shrinking. (Metas numbers dont jibe with the ITAAs because of varying definitions for what constitutes an IT worker. Narrow definitions used by the government, for example, have traditionally not counted positions such as technology support or Web development in counting IT workers, noted a spokeswoman for the ITAA.)

This country now has about half of the worldwide IT work force, and that work force is growing at a rate of about 10 percent annually. Worldwide IT work force expansion rates, meanwhile, have been growing by up to 20 percent yearly, with countries such as Canada, India and the Philippines experiencing a growth rate two to four times that of the United States.

As for the type of worker IT managers are looking for, technical support workers wont gain much ground. Companies are predicting theyll hire 281,406 help desk types in 2002. Thats up from 218,238 last year, but less than half of the 616,055 that hiring managers said were needed in 2000. Network design and administration skills, meanwhile, will be in big demand with 199,348 hires forecast in the coming year. Programmers and software engineers are the next most sought-after position, with 161,487 anticipated hirings in 2002.

The ITAA report was based on interviews with hiring managers at 155 IT firms and 377 non-IT firms between Feb. 11 and March 14. It also found that workers at IT firms have suffered disproportionately, with total IT jobs in that sector dropping by 15 percent. IT jobs at non-IT firms dropped by 4 percent. The South, which the largest percentage (3,406,519) of IT workers call home, also shed the largest percentage of workers, at 34 percent, or 181,928 workers.