Why tech jobs are beating the employment odds

Why tech jobs are beating the employment odds

Summary: While tech jobs are in no way immune to the ups and downs of the rest of the economy, right now they're holding their own. Here are three reasons why.

TOPICS: CXO, IT Employment

Just in time for U.S. workers to flee to the shores to celebrate the birth of our great nation with the requisite three-day weekend packed with backyard barbecues and impressively choreographed fireworks displays, we're capping off one of the most depressing weeks for employment reports in the better half of a decade.

The number of employees on private-sector payrolls fell by 79,000 in June, the steepest fall in six years and nearly four times what economists had estimated, according to the ADP National Employment Report released Wednesday. Today the Labor Department announced that 62,000 non-farm jobs were lost last month, bringing the number of jobs shed in 2008 so far up to nearly half a million. Meanwhile, new applications for jobless benefits hurdled to 404,000 last week.

Yet as Larry Dignan noted this morning, tech employment is holding up amid this ugly jobs outlook.

The tech sector and its related functions aren’t growing jobs, but aren’t hemorrhaging them either. And in some spots there’s even growth–management and technology consultants as well as information systems architects are actually adding jobs compared to a year ago.

So why is the tech sector beating the odds? The experts I have spoken to had three salient points:

1. It's not 2001, and this isn't a tech-driven slowdown. Even though the U.S. economy is clearly hovering on the brink of a full-blown recession, the initial culprit has not been overvalued tech stocks, but the subprime mortgage crisis. Any effects tech feels are secondary ripples; this is not to say that no tech jobs will be lost, but that they're not the in eye of the storm.

"Traditionally, tech is much more immune than other sectors because it tends to deliver to people products that over time grow in value," said Stephen Baker, vice president of industry analysis for The NPD Group, a global provider of consumer and retail market research. "If the boat is sinking, we're kind of moving along at the top not bouncing up the way we have been in the past. Clearly things are better here than they are in other categories but not without challenges as well. We're certainly not immune, certainly feeling the effects of the economy that are holding down growth in the hardware business."

2. If you're in the right areas, you're still needed. Whether you're consulting or a salaried employee, if you're in the areas that businesses deem essential--such as cost savings, virtualization and green technologies--this isn't going to change because of some belt-tightening.

"It's a very different job market than it has been in previous economic slowdowns," said Jim Lanzalotto, vice president of services and marketing for Yoh, an IT services and recruitment company. "High-impact skills are showing a really strong demand. For example, there is a gap of 30,000 workers between SAP need and SAP supply. This is just one area where we can't find enough people fast enough."

3. A diminished pipeline is piquing demand. Though the state of technology and engineering education in this country is nothing to cheer about--a study by the Computing Research Association released in March found that there were half as many computer science majors in 2007 as there were in 2000--the shortage of people in the IT pipeline can translate to better job security for those already in the field.

"American students get to college and they're not prepared for science and technology careers and the pipeline for skilled workers is drying up. We don't have enough American kids going into those fields," said Josh James, a senior research analyst with the AeA, a high-tech trade association.

Topics: CXO, IT Employment

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  • Can somebody tell me when

    an economist has ever called it right? Every piece of economic
    news includes the line "more than" or "less than" what economists

    Why do we even listen to these folks?
    • It's spin

      People in the financial industry can only make sales (and profit) when people are spending. If I don't feel secure with the economy, I won't spend. In order to get people spending, a better-than-reality picture is presented. This is how the sub-prime issue happened. The consumer trusted the spin (ie did not look beyond the immediate information) and now is in trouble (I hear houses are being auctioned off on the courthouse steps in Atlanta). It's only when thing are so bad they can no longer be ignored that the "reports" change to something closer to reality. Even then, they have a positive spin to get people motivated to spend.
    • economic forecaster

      Don't know who said it, but...
      [i]An economic forecaster is like a cross-eyed javelin thrower. They don't win many accuracy contests, but they keep the crowd's attention.[/i]
  • I'd have just put it more brutally...

    US companies have wanted science/engineering to be cheap, so now they are reaping the rewards of that mindset. That coupled with the sad state of interest in and delivery of science/engineering from grade school on up. And put that down to the "Where's my 4.0?" idiocy that exists.
    • Even though the cost of pertinent education has gone up.

      Then everyone says "debt is bad", so to even get a job means living with debt for decades, hoping the job is semi-stable, hoping another job quickly comes around if you lose the first one due to downsizing or whatever excuse... then everyone says people aren't saving because our economy runs on debt...

      I could go on forever with the two ambivalent mindsets on display, often by the same people.
      • On the cost thing...

        It costs a lot more for colleges to produce a Doctor or Engineer or Scientist than it does an MBA, Lawyer or Accountant, and it's generally far easier to graduate with something like a 4.0 in a non-technical degree. Also, from talking to folk I know at places like Boeing they have been getting more and more horrified at the lack of quality of the graduates in these fields.

        So, given that and offshoring or bringing in cheap substitutes, is it at all surprising that the science/technical area is in dire straits?
  • It's also the nature of the work

    If you do not really love technology, you would not want this job. The hours are long, breaks are always interrupted, and the pay rarely matches the true value of the work (true in the sense of time spent vs remuneration). This keeps the number of people that are in the field low enough to have a steady demand.
  • welcome to the world of free software

    When programmers write software for free, they STEAL from the programmers who want to make a living writing software.
  • RE: Why tech jobs are beating the employment odds

    Deb refers to the job market as "depressing", but the July 3 unemployment rate is 5.5%, which is barely over the 4-5% figure that economists call "full employment" (there's always some "frictional" unemployment, so it never drops to zero). Instead she uses absolute numbers (like "79,000 jobs") which is misleading. It sounds like a lot, but is it? Regretably the article appeals to emotions rather than reason.
  • RE: Why tech jobs are beating the employment odds

    I just got an offer from Dell for $110K !!!!- I'm crossing my fingers and praying it get the job.. - Walter Anderson MCSE, A+, Network+ - Sharepoint Consultant
    • I wish you the best of luck!!

      OMG, I have never seen that much money! I am currently training someone to be my "backup", so I expect to be out on the street soon. I suspect that I will be competing with all the H1-B's who are actually filling all those jobs that are out allegedly out there.
  • RE: Why tech jobs are beating the employment odds

    Kids are not bothering to get Computer Science degrees because the pay and working conditions are no longer good in that field. I worked in it for 10 years then left. More and more of my coworkers were special visa workers who were afraid to EVER go home and they would work for less money. Meanwhile, management people don't value work they don't understand (IT) but THEY get paid very well for going to meetings and doing their less difficult work. It's ridiculous that our press always makes a big deal of how our kids don't want to study engineering, IT and science but never comments on the lousy working conditions, pay and competition from all the special visas in these fields.
  • RE: Why tech jobs are beating the employment odds

    This is more of the same stuff they've been saying for years.

    If SAP was really that short of consultants then here is a concept for them. HIRE SOME PEOPLE WHO HAVE RELEVANT SKILLS AND TRAIN THEM IN SAP instead of charging them for the training.

    Otherwise... just deal with the shortage and the lost business.

    Since they don't seem to be doing that... then there obviously isn't a shortage!!