Domestic IT Hiring Up Slightly, Insurance Sector Flat
Outsourcing, hosted services contributing to most recent U.S. Department of Labor technology job statistics.
Domestic IT Hiring Up Slightly, Insurance Sector Flat - The United States experienced a net gain of 11,800 IT-related jobs in January, according to employment statistics released last week by the Department of Labor's Bureau of Labor Statistics. The gain, which represents all sectors, plays out to eight straight months of positive job growth in IT labor segments.
"This increase is not as good as it looks since the BLS made a downward adjustment down of 45,300 for December," notes Victor Janulaitis, CEO of management consulting firm Janco. "From the data, it's not clear that IT employment is signaling that the recovery has started. "
However, the fact that total employment for telecommunications, data process, information services, and system design sectors has risen slightly 0.22% (5,900 jobs seasonally adjusted) since January 2010 is a good sign, noted Janulaitis.
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In the insurance and financial sectors, the numbers aren't that rosy. From January 2010 to January 2011, the number of insurance and finance IT jobs dropped one half of one percent, or virtually flat.
The job picture is mixed for other technology professionals. The data shows that telecommunications is still a depressed market with a loss of 50,400 jobs since January 2010. Elsewhere, there has been a compensating increase of 52,700 jobs in the computer systems design and related services sector. According to Janulaitis, a larger review of the data that was published in January that factors in BLS adjustment, actually shows a decline of IT jobs of 1.28% in December versus an increase of 0.36% that was originally reported.
Leading all segments in IT job gains were management and technical consulting services, along with computer systems design and related services segments, which together accounted for nearly 95% of all new jobs created, notes the DOL.
Two IT job segments in the computer and electronic products industry category also saw a hiring increase in January 2011: communications equipment (+800 jobs) and computer and peripheral equipment (+700 jobs). In the past 12 months these segments have had net job gains of 6,500 and 3,900, respectively.
The influx of outsourced hosted computing services is rapidly taking its toll on the internal staff of U.S. firms, with the worst performing areas being data processing, hosting and related services, which saw a decline of 1,900 jobs in January. In the last 12 months, there was a net loss of 6,600 jobs in this segment, 1,700 in the past two months alone, according to the report.
Based on the most recent data, Janco asserts that the IT job market will be soft for at least one more quarter. Further, Janco expects more churn in IT staff as CIOs accelerate their move to more flexible staffing models.
CIOs are outsourcing more technical work, including managed IP services such as VoIP and VPNs. They are hiring more contractors for desktop and security services, and they are putting more applications such as remote backup in the cloud. At the same time, they are looking to hire IT people with business and analytical skills, such as risk management and project management. CIOs report that they're having trouble hiring IT people because either they can't find IT professionals with the right business skills or they can't afford them. All of this means more turnover in IT departments.