Survey: IT Job Growth to Remain Soft

By Roy Mark

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Predicted demand for hiring IT workers has reached an historic low of only 493,000 positions over the next 12 months, according to research released by the Information Technology Association of America (ITAA ). The hiring prediction is down from 1.6 million at the start of 2000 and less than one-half of the predicted 1.1 million positions needed at the start of 2002.

The telephone survey of 400 hiring managers from IT and non-IT companies nationwide found 67 percent of those interviewed said they thought hiring demand would stay the same or decline over the next twelve months.

Companies are also moving more positions overseas, with 12 percent of IT companies and 3 percent of non-IT companies saying they have already opened up overseas operations. Sixty-seven percent of respondents already outsourcing IT work overseas say that jobs most likely to be moved offshore are programming or software engineering positions, followed by 37 percent moving network design, and 30 percent moving Web development jobs.

"We will closely monitor increased offshore activity to see its impact on U.S. IT workers," said Harris N. Miller, president of the Washington-based trade group. "This new phenomenon is a factor of cost and the relative portability of IT products, and the increased usage of broadband connections worldwide."

The ITAA annual survey, conducted by Market Decisions Corp. of Portland, Ore., placed the size of the U.S. IT workforce at 10.3 million, with hiring and terminations amounting to less-than-one-percent growth during first quarter of 2003, with the IT workforce growing by 86,000. While that is good news, it is below fourth quarter 2002 growth, which added 97,000 jobs, the slowest quarterly growth in 2002.

"If the demand for IT workers is an indicator of business growth, our survey results are not encouraging," said ITAA President Harris N. Miller. "The fact that firms have dramatically scaled back force reductions may indicate that they are properly staffed to handle existing and new business. There are several bright points, such as companies adding technical support workers at the highest levels and the fact that most workers are not seeing pay cuts."

Other key findings of the survey included:

* IT companies in the Midwest and West are most likely to send jobs overseas;

* Seventy four percent of companies say they have not changed compensation for IT workers in the past 12 months. Of companies taking action, only 8 percent lowered pay;

* 91 percent of companies were able to meet or exceed their hiring plans in 2002;

* For non-IT companies, both hiring and terminations were down roughly 25 percent in the last 12 months;

* IT companies appear to be more likely to cute wages than non-IT companies; and

* Reductions by IT companies were down almost 50 percent in the last 12 months, while hiring was static.