IT Job Market Softens, But Demand Remains

Information technology remains at the forefront of the U.S. economy, accounting for approximately 7 percent of the nation’s workforce, according to a study by the Information Technology Association of America (ITAA).

The study found that more than 10.4 million people in the United States are IT workers, and this number does not include jobs in government, nonprofit organizations or small entrepreneurial firms. Demand for IT workers is down 44 percent from 2000, but employers will still attempt to fill more than 900,000 new IT jobs in 2001.

The talent gap for IT workers remains large, although it has closed compared to 2000. Managers report an anticipated shortfall of 425,000 IT workers to fill their openings. In 2000, the ITAA found a shortfall of approximately 850,000 workers.

Non-IT companies remain the largest employers of IT workers with 9.5 million, and they also generate greater demand at more than 640,000 and experience the larger gap at approximately 303,000. This isn’t surprising when you consider that 22 non-IT companies exist for every IT company in the United States. Non-IT companies expect their IT workers to remain on staff an average of six months longer than their IT company counterparts, the study found. The average acceptable tenure at non-IT companies is 36 months, compared to 30 months at IT companies. Non-IT companies also retain their employees longer. Eighty-two percent remain on board for an acceptable length of time compared to 74 percent for IT company employees.

Technical support people remain most in demand by IT and non-IT companies alike and will account for one-fourth of all new positions over the next 12 months. Despite this, the ITAA study found demand for technical support staff is down 65 percent from last year. In 2000, hiring managers cited a need for three times as many technical support people as the next closest category — programming/software engineering.

The ITAA study is based on the results of 685 telephone interviews with hiring managers inside and outside the IT industry.

A survey by Intellor Group conducted at the SAP-Microsoft Congress 2001 conference held in Redmond, Wash. in January, 2001, found that skilled staff shortages increase an average of 20 percent with e-business initiatives compared to traditional business initiatives.

“Staffing of skilled IT professionals in support of a company’s movement into an e-business environment is creating an even greater challenge for IT managers. The number of new e-business technologies continues to grow on a weekly basis, making it nearly impossible for IT professionals to keep up and develop the depth of experience required,” said Richard Rist, founder and CEO of Intellor Group. “We believe that many organizations are charging into e-business initiatives with skill levels that would have stopped many traditional system deployments dead in their tracks. The pressure to be perceived as an innovative leader in e-business is driving organizations to build and deploy at a pace that may come back to haunt them. The good that has come from the dot-com crash in 2000 is that the pace has slowed significantly, and what would have been a technology skill train wreck has been avoided.”

Intellor’s study found that if an organization did not have a skilled employee, the most popular choice was to train an existing employee. In fact, 41 percent of the respondents indicated they will train existing employees to fill positions to handle mobile computing in support of e-business. But respondents fell quiet when asked if they would use an ASP to avoid a skill shortage. Twenty-eight percent of the respondents indicated they will train existing employees to handle business intelligence for their traditional business.

Thirty-nine percent of the respondents already have skilled individuals on staff to support B2B marketplace initiatives. Thirty percent indicated they will train existing staff, while another 24 percent said they will hire consultants.

There were 137 respondents to the Intellor survey, representing more than 20 industries. Nineteen percent of the respondents were C-level executives while 45 percent were director-level or higher. Respondents were split 50-50 between companies with revenues above or below $1 billion in revenue.

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