For IT Workers, How Bad Will It Get?

November 24, 2008
By

James Maguire

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The fall off in job postings typically starts in mid November and runs through the holidays, usually picking back up in January, he says. Both IT recruiters and workers often put plans on hold in this period. Workers, in particular, want to stay with their current employer long enough to collect their year-end bonus.

“At least 5-10 percent” of the current drop is due to seasonality, Silver says, while noting that his calculation has an element of speculation in it. Yet at any rate, “This year will be more significant. I would expect to see a further decline in the job count between now and the end of the year. I think that’s highly likely.”

And, while Dice’s numbers suggest a cold wind blowing through tech hiring, the fact remains that IT unemployment is markedly lower than overall joblessness. The national unemployment rate has spiked up to 6.5% and is trending higher. But IT unemployment sits somewhere around 3.5%, based on the latest Bureau of Labor statistics. “It’s all relative," Silver says.

One indicator of the health of IT hiring: the ratio of job openings that are full time vs. contract openings. Dice’s tech openings are typically 70 percent full time, 40 percent contract. (The overlap is because some jobs are listed as “either or both” full time and contract.)

So far this year, this Dice ratio hasn’t changed. But Silver predicts it will. In a recessionary environment, employers lean toward contract hires, fearing the risk of bringing on full time staff. “That’s what we saw back in 2002,” he says.

“I would expect to see, probably over the next 6-12 months or so, an increase in the number of contractor positions.”

Companies assess which major projects can’t be postponed and hire a crew of contractors accordingly. When the project is done the IT pros typically get a ‘thank you’ and are sent home, though there's always a possibility the assignment turns into full time.

Amid the gathering gloom, a few bright spots still exist. Surprisingly, some smaller markets continue to see increases in job openings.

Silver says that while major markets like Silicon Valley, New York and Washington DC, which have thousands of jobs, are down heavily, secondary markets, cities with around 1,000 jobs, are up, if modestly. And sometimes not so modestly. Cleveland and Cincinnati “are up by over 20 percent,” he says. If you’re willing to relocate, the openings are still out there.

Similarly, certain sectors continue to look okay. Specifically, the virtualization job market. “Granted, it’s still small,” Silver says. Yet virtualization will continue to grow as companies seek to improve their efficiency. CIOs looking for payback in a 12-24 month project are willing to consider virtualization even in a belt-tightening period.

Silver also notes that some of the most commonly hired positions – he points to Java Programmer and Database Administrator – are retaining their value in the marketplace. "They are declining but they are still among the most popular.”

Annual Tech Sector Job Cut Announcements, 2001-2007

Challenger, Gray & Christmas figures (rounded off):

2001: 695,000

2002: 468.000

2003: 228,000

2004: 176,000

2005: 174,000

2006: 131,000

2007: 107,000

2008: (through Oct. 31): 140,000

Also see:

The 2009 IT Salary Guide

How to Ace the Technical Interview

How to Not Get an IT Job: 10 Tips

What If IT Pay was Performance Based?

The Best IT Job Boards