Is Chicken Little Crying Foul?

Is the sky falling on IT? A recent InformationWeek survey found that two in five North American IT executives cut IT spending by as much as 40 percent during the second quarter of 2008. The Goldman Sachs Group released a survey in July indicating that IT staff jobs are at increased risk as CIOs take note of a slowing economy. And a recent U.S. Department of Labor report says IT employment has dropped significantly during the past 12 months.

However, those reports are contradicted by others; earlier this year, eWeek reported that IT employment had reached a record high in the second quarter of 2008. That report was followed in August by another positive plug from the National Association of Computer Consultant Businesses (NACCB), which tracks monthly IT employment. The NACCB report revealed that IT employment reached 3,907,000 in July, another record high, and that overall, IT employment increased from July 2007 to July 2008 by 251,000, or 6.7 percent — far outpacing the general employment market.

In response to these conflicting reports, Al Strong, CEO of Commercial Programming Systems, Inc. reflects that he, too, sees a positive outlook in the IT job market. Strong says, "Although there's a lot of coverage about the recession in the media, we're not seeing a huge downturn in IT hiring. I think a lot of people see the media reports and think that things are worse than they are."

Southern Californians, for example, have seen plenty of high-profile corporate challenges covered by the media. One of the bigger local IT employers, Countrywide, was purchased this year by Bank of America, and a hiring freeze during the buyout was seen as a hiring slowdown. The company is now filling open positions with internal candidates so that they can retain employees and still fulfill their hiring needs. Likewise, the City of Los Angeles has implemented a policy of filling available jobs with candidates who are already city employees. This policy lets the city fill needed positions in IT and elsewhere, but external hiring remains slower.

Amgen, another Southern California employer, also experienced cutbacks as it completed a large-scale restructuring plan. And the banking industry has been on the front page because multiple financial institutions have failed recently; the IndyMac Bancorp bankruptcy is an example of the kind of impact that a single employer can have on IT hiring freezes and job cuts.

Some reports, too, may reflect overall belt-tightening across industries. For example, some IT cutbacks are in hardware and software purchases and unless return on investment is high and fast, budget constraints are forcing many organizations to stick with immediate purchase needs and delay wish-list items. On the human resources side of the equation, consultants and contractors are under a watchful eye as their bottom-line values are measured and assessed.

Still, things might not be as bad as they seem. Strong says that overall, diverse IT skills are still in high demand, although reports of a slowing economy have caused several employers to assume that the field of candidates is bigger as a result.

"Our clients are taking more time to make their hiring decisions, definitely," says Strong. "They want to look at as many candidates as possible before making a final selection. Because that process can be time consuming, they sometimes lose their first and even their second choices to fill those positions."

In Southern California, says Strong, widely valued skills include experience in ERP and CRM. The candidate pool is strong in all areas, too, as candidates seek stable, long-term employment with reliable firms. But economic worries aside, IT salaries are still holding firm. Janco Associates, Inc. conducts an annual salary survey based on responses from businesses throughout the United States and Canada. Their findings? IT median salaries are still rising for IT staff at all levels. The best IT candidates might be on the prowl for new positions, but they sure don't think the sky is falling.