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Given the March employment figures released by the government the week of March 29, technology jobs in the last six months have shown some real signs of growth, with over 22,000 new jobs being reported. The problem is that there are still some signs of instability in the air, as March also saw the loss of nearly 7,000 technology jobs.
The ebb and flow on jobs data for technology is complex, and points to a set of dynamics influenced not only by the recession, but by the shifting dynamics between technology business strategy and the hiring practices of companies, according to David Foote, CEO of IT research and analyst company Foote Partners.
“From October 2009 to February 2010, the five IT bellwether job segments reported in the DOL statistics grew by a net 29,100 jobs,” Foote wrote in a news release on the employment numbers. “They gave back 6,800 of those jobs in March, but that by itself doesn’t necessarily indicate that the momentum for jobs in this recovery is dissipating …
My sense-and I say this not just from looking at federal job data but from our own research views and executive interviewing involving 2,000 employers who are our research partner-is that we’re in a ‘three steps forward, one step back’ pattern. Jobs are also a lagging indicator in any economic recovery, and we’re not seeing a strong job recovery yet. But it’s clear that the bleeding stopped in October and many employers are once again acquiring needed skills and making selective IT hires. They are doing so very deliberately, and purchasing services where they once might have added full-time staff.”
In an e-mail interview with eWEEK, Foote delved into the larger trends and state of IT jobs and technology work in 2010. Foote, a former analyst with Gartner Research and Mega Group, co-founded Foote Partners in 1997 with former McKinsey & Company compensation executive George Foote.
Your latest news release cites government data of 22,300 technology jobs having been gained over the last six months, but is 22,300, in your opinion, a strong number considering 6,800 jobs were lost in March alone?
For the way that BLS [the Department of Labor’s Bureau of Labor Statistics] defines the ‘IT professional,’ it is a strong number, yes.
What do you think is holding back IT from seeing consistent month-over-month job gains?
Inconsistency is being caused by employers accelerating transitions to new staffing models. It’s not the recession per se that has caused this: Employers have been struggling with this for years. But resistance to changing models is natural. The recession has broken down a lot of this resistance, and the volatility is being driven more by that than anything else.
At this post-recessionary point in time, what is happening in the larger business climate that is keeping IT jobs from stronger hiring?
Employers have been moving very deliberately toward managed services models and various new forms of outsourcing and co-sourcing IT labor, and away from traditional staffing models. It’s been a very, very tough transition for them, having operated for years in a staffing model that encouraged full-time hires with contractors and consultants filling in a lot of the gaps. The end game right now is (and was, prior to the recession), ‘How can we achieve greater agility, flexibility, reaction time and speed of execution?’ not ‘cost cutting,’ despite recessionary pressures to reduce headcount.
The truth is that the recession has been beneficial in the sense that it has pushed many employers over the edge who had been dragging their feet about SAAS [software as a service], PAAS, IAAS, Whatever-AAS, as alternatives for the FTE [full-time employee] staffing model.
Even more to the point, the focus has been much more on skills acquisition than job acquisition. Employers aren’t looking for people per se but for skills, and how they acquire those skills is less important than speed in getting them. Major staffing decisions have already been made on major initiatives, short projects, operational infrastructure. Employers have a good idea of what skills and competencies are needed, acquisition has been budgeted. A frantic skills search has been under way and it’s easier and faster to find contractors and consultants to step in versus the time it takes to search for and process a new hire. Or simply consider purchasing it as a service (MS is a $33 billion market globally, moving to a $66 billion market by 2013).
Speed of execution is the prime directive. Hiring FTEs not only takes too long, but it is a tougher sell to management during an economic recession and recovery. So what is happening in the larger business climate that is keeping IT jobs from stronger hiring? Very little. They aren’t hiring because it takes too long to do find and process new hires, it costs them more to do that, and the marketplace is too brutally competitive right now to give competitors a lead time. Speed to market with the right product is key, and it has to do what you advertise it will do. It may take several tries, which is why labor force agility is key. Nobody wants to waste [money] making a new hire who may have a very short shelf life if the business decides to change directions quickly.
If 2009 was the year of cost cutting, what is 2010?
Getting back to business, staying competitive, launching new products to meet new customer demands. Also governance.