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The endangered Western IT professional: Will there ever be a significant hiring uptick?

September 5, 2009

IT layoffs appear to be bottoming out and there are even signs of a slight uptick in hiring in some areas but if you are an unemployed IT professional in the West, you are still an endangered species and don’t expect a sudden surge (and perhaps not even a trickle) of job offers in the immediate future.

After all, 2009 has been a banner year for IT layoffs (see a slideshow from NetworkWorld of the most notable ones) and despite the fact that there were signs of an uptick in the hiring of IT professionals starting this summer, CIO.com nevertheless reported back in June that IT professionals still faced having their salaries slashed along with potential layoffs and lengthy stints of unemployment. And while the Conference Board has recently reported that online job ads have increased, a recent Robert Half Technology poll of CIOs found that CIOs remain cautious about IT staffing levels with staffing plans for the fourth quarter remaining largely the same as plans for the current quarter.

Moreover, hiring trends in the years before the recession do not point towards any upsurge in employment for IT professionals – at least in the West. As a Forester Report earlier this year noted, IT employment growth was actually fairly modest in both 2006 and 2007 with IT departments running lean operations with little in the way of fat to be trimmed in terms of staff. In fact, Forester noted that in 2007 (the year before the current recession started), there was only a 2.8% increase in IT department staffing levels – a sharp contrast from the 9.2% growth in the year 2000 right before the 2001 to 2002 recession began.

endangered IT Professional
Furthermore, a July survey by the IT Job Board (a British based job board for IT professionals) revealed that almost two thirds (64%) of companies surveyed have off-shored some portion of their IT department or an IT function during the last six months. In fact, 34% of those surveyed said that more than half (51%) of their IT department has already been offshored (with 79% of respondents saying it was offshored to India) while half of all respondents said they believed more offshoring was planned over the next 6 months (with 75% saying they believed the work would be sent to India). When asked what types of roles they thought were being sent overseas, 79% of respondents said software developer jobs, 71% said programmer roles and 67% said IT support jobs. However and interestingly enough, 40% of respondents said that offshoring was occurring due to a lack of business knowledge and 83% of respondents said that offshoring was having a negative impact on the quality of their IT departments. In other words, companies are not only trying to cut costs by offshoring, they are also attempting to bridge a local skills gap but are still not necessarily achieving the results that they want.

What does all of this mean for the future of IT professionals, especially in the West? Clearly cost cutting is not the only motivating factor for offshoring IT functions although clearly it is a major motivating factor given today’s economic climate when many companies must be willing to sacrifice quality in order to survive. However and when the current economic crisis is clearly over with, IT departments will likely be reevaluating their outsourcing programs and strategies and will no doubt be looking closely at the service quality levels being achieved by their outsourcing vendors. Hence, there will likely be a reshuffling of venders perhaps along with more nearshoring and homeshoring options considered. Nevertheless, even if prerecession hiring growth for IT professionals returns, more than a few IT professionals in the West may have already found themselves to be an extinct species.

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Written by JohnU · Filed Under HRO Blogs 

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