Posted on 05/14/2002 12:11:19 PM PDT by OKSooner
Like a Rubber Ball: IT Job Skills Squishy in the Year 2002
by Thomas M. Stockwell
A new ITAA employment report indicates optimistic IT hiring trends. No one need remind us of the economic downturn that has put so many IT professionals on the streets: The economy for IT sucks, and most analysts at Gartner Group and other consulting firms expect few miracles over the next months.
Yet, amid the doom and gloom, the Information Technology Association of America (ITAA) has released a report entitled "Bouncing Back: Jobs, Skills and the Continuing Demand for IT Workers." On the face of it, this report seems to have more in common with the tales of Polyanna than with the world that most of us IT professionals live in. Indeed, on some level the survey seems to conflict with other reports delivered by Computerworld, IDG.net, and others.
To derive this report, ITAA commissioned Market Decisions to conduct telephone interviews with 532 hiring managers from IT and non-IT organizations. The survey itself was sponsored and developed by a dozen organizations including Microsoft, Intel, the American Association of Community Colleges, and The Chubb Institute.
IT Loses 500,000 Jobs in 2002 First, the bad news! Alas, there's not much really new here at all.
According to the report, the number of IT jobs decreased dramatically in the early part of 2002. Of the 10.4 million professionals who compose the IT workforce, the number of jobs fell by 5 percentage points to 9.9 million workers. This was an aggregate loss of nearly a half a million jobs over a 12 month period. Though companies hired 2.1 million IT workers, they also let go 2.6 million.
Hardest hit were IT companies themselves: IT firms cut back their IT work force by 15%, while non-IT companies laid off only 4%. Nonetheless, considering that 92% of IT workers work for non-IT companies, a 4% drop in non-IT companies is actually greater than the 15% loss within the direct IT sector.
Technical support workers, according to the report, were the most likely personnel to be let go. By comparison, software programmers and engineers currently represent the largest category of IT workers in the United States, 21% of the overall IT workforce, with more than 2 million residing in the United States alone.
ITAA Projects a 500,000 Job Demand Gap in 2002? Now the good news! That is, if you can believe the ITAA's tallies. According to the report, companies are "optimistic" about their future hiring opportunities over the next 12 months. The report projects an aggregate demand for IT workers of 1.1 million jobs in 2002. At the same time, the ITAA expects that more than a half-million of those jobs will go unfilled due to a lack of "qualified workers."
So let's get this straight, ITAA! IT is currently down by half a million jobs--people let go for economic reasons. However, according to these figures, there will be a demand for 1.1 million jobs this year, out of which only 50% will be filled because there aren't enough qualified people available to do the work! Is the glass half full or half empty? Or are the numbers simply being tweaked by these analysts to give the industry what it desires: more H-1B visas for visiting IT workers and more momentum for outsourcing!
Outsourcing Grows, Job Longevity Shrinks For instance, the report states that, "As a means to cope for the lack of skilled workers, outsourcing continues to grow in popularity among non-IT companies, who cite an increase in outsourcing of 17% over 2001."
Perhaps most distressing of all is the longevity of IT worker retention: just slightly over 2 years for 84% of IT workers. This is actually down from estimates the previous year of 33 months, and non-IT companies (representing 92% of the IT jobs available) say they have reduced length of hire expectations from 3 years to less than 2. Database developers and administrators have the shortest retention rate, on average less than 10 months. By comparison, programmers and systems engineers have a retention rate of an average of 33 months.
Hot Areas: Security! Cross-Platform Languages! It's not too surprising, considering the events of 9/11, that information security and network security are currently the hot areas in the IT arena, with the majority of the jobs being in the larger companies of 1,000 employees or more. The hottest skills profiles that were reported remain C++, followed by SQL, Java, and Windows NT.
While the ITAA report tries to paint a picture of optimistic trends in hiring (relying on company projections in interviews with hiring managers), the outlook is truly a double-edged sword for IT. Though the outlook for jobs looks promising, the stability of those jobs is really in question. Long gone from IT are the visions of a stable, long-term professional career with a single company. Instead, what we see in the ITAA numbers is a scramble for better-paying (or in today's market, any paying) gigs, with a short job life-expectancy and few incentives to stay with an individual organization. This, in turn, may mean that fewer non-IT organizations will have a real career path for their IT personnel, relying instead upon the volatility of the IT employment environment to meet their business needs.
Coders Remain the Bulwark of the IT Industry At the same time, the heart and soul of the IT employment market remains the programmers and the systems engineers whose careers are coupled with cross-platform languages such as C++, SQL, and Java. (Nowhere in the report is RPG or its derivatives even mentioned as a force in IT languages.)
Finally, while the ITAA report is a picture of the larger IT industry--of which the iSeries 400 employment market is but a miniscule part--it's worthwhile to note that there are no metrics to identify the skills turnover rate within IT. For instance, why will a half-million jobs go unclaimed for lack of qualified workers when there are more than a half-million IT workers out of jobs? Is it because the skills required by IT organizations are so new that there is a lack of truly qualified individuals? Or is it because it is more expedient in this employment market to merely pick and choose the expertise that your organization needs, consume that expertise within a few company projects, and then cast the employee to the wind to fend for himself while the company continues on choosing the next set of skills that are needed?
Regardless of how the numbers are crunched, it appears that the real agenda in the ITAA report is to project the shortages of skilled workers and not to identify the mechanisms by which the employment imbalances might be explained.
It's because IT companies prefer to fill job-slots with low-wage H-1B applicants, regardless of skill level.
Now coporations are going to the next level: Outsourcing IT projects to foreign countries (i.e., India).
I also think alot of dot.bomb jobs went away. Those tech support jobs going to new "multicultural arts" grads (who don't have skills for typing) for 85k quickly disappeared when the dot.bomb bubble burst.
The latter. Working the expense side of the ledger in IT is an unstable brook. Companies are overlevered and executives still are pulling millions in cash out of companies. What to do? Squeeze vendors and employees for all every dime you can get out of them.
Roger that. Qualcomm in San Diego was doing this big-time in San Diego as far back as 1994 when I took a position there. The managerial mindset (oxymoron, I know) was, "Hey, we get three of these guys/gals for what one American costs us!", when the reality is that we Americans had to recode damn near everything these folks slapped together after they left. Some were good, but most generated nothing more than endless megs of sh!tcode.
This increased the tax impact to companies that were developing software for internal use. Coincidently, this was also the point in time when the IT field started to go down the tunes.
We had alot of very complicated code written by H1-B's. Most of it is a case of using a sledgehammer to break eggs. We rewrote one website in 2 to three weeks. This site consumed enourmous amounts of server time and maintenance effort. Alot of the korn shells I get at work are a complete mess. Error checking logic that creates errors, not detect them. Useless undocumented code. The list can go on and on. It is very frustrating. The only good H1-B's we had left the company.
The yearly quota for H1-Bs is scheduled to fall from 195,000 to 65,000 next year. The ITAA is starting to hype this fictional "recovery" in the job market to keep, if not increase, the 195,000 level.
Congress will have another midnight voice vote to keep the level up, mark my words. Unemployed or ex- IT workers will have no influence on the process. The ITAA will channel another $40 million to the scum in Congress, and it will be all over.
you are wrong bubba. This is not the only reason, but it has a lot to do with it. I lost my job at IBM along with 15 other programmers(this just in our small group), because all the systems we maintained are being shipped to india. IBM alone has laid off hundreds of its people, mainly for the same reason.
SBC to cut 5,000 jobs
Date: MAY 14, 2002
Author:
Telecommunications giant SBC Communications Inc. said today it will cut 5,000 jobs this quarter, citing the continued slowdown in the economy and stiff governmental regulations not faced by its competitors.
San Antonio-based SBC said the cuts, which will be completed by the end of June, will involve employees in the management and nonmanagement levels in the 13 Midwestern and Southwestern states where it operates. The cuts won’t include employees who are directly involved in customer service, the company said in a statement.
SBC spokesman Selim Bingol said after the cuts are made, the company will employ about 185,000 people.
Bingol said SBC reduced its workforce by about 10,000 in the past two quarters. Last month, the company said it planned to cut 4,000 jobs over the last three quarters of 2002.
“We accelerated [that plan] and increased the amount,” he said.
SBC President William Daley said the soft economy and regulations that SBC’s competitors don’t have to face combined to force the company to cut expenses and jobs.
Bingol said local telephone companies like SBC are discouraged from investing in new infrastructure or new jobs because they must then open up their high-speed DSL lines to competing Internet service providers. However, their major competitors, cable companies, aren’t required to comply with those regulations.
Frank Louthan, an analyst at Raymond James & Associates Inc. in St. Petersburg, Fla., said that all the major telecommunications companies are continuing to suffer from the slowdown in the economy as well as from the governmental regulations, which, he agreed, discourage them from rolling out new infrastructure.
Louthan said companies like SBC aren’t likely to see an improvement until enterprises start to do more hiring and more IT spending.
| Employer Name | H-1B Visa Requests |
| Group One Therapy | 169,666 |
| PricewaterhouseCoopers LLP | 87,096 |
| Syntel, Incorporated | 43,252 |
| Deloitte Consulting LLC | 38,252 |
| Hps America Inc. | 37,616 |
| Langeveld Bulb Co., Inc. | 32,000 |
| Baton Rouge International Inc. | 31,483 |
| Continental Graphics Inc. | 31,001 |
| Ernst & Young LLP | 26,392 |
| The Metal Kitchen | 25,000 |
| Oracle Corporation | 23,352 |
| Cisco Systems Inc. | 22,558 |
| Tata Consultancy Services | 22,128 |
| Cap Gemini Ernst & Young US | 19,255 |
| Intel Corporation | 18,586 |
"Vietnam is not yet known for its software, but Vietnamese programmers have good skills. And we are cheaper than India and China," Hung said.
Based in Ho Chi Minh City, the software company had little money to promote itself abroad. But, like many other tech companies in Vietnam, Hung used another means to get the inside track on some of his high-powered deals -- contacts with fellow Vietnamese overseas already working in the industry.
With cheap, educated and plentiful labor, Vietnam's emerging information technology sector has mushroomed from a handful of software companies two years ago to at least 250 domestic and foreign-owned companies, said Truong Gia Binh, chief executive of Vietnam's largest Internet company, FPT.
It's only a matter of time before the Communist country becomes a full-fledged regional IT player, he said. IBM, HP, NTT -- they already accept the quality of Vietnamese programmers. Young Vietnamese IT people are very eager to take on the challenge of showing they can do more," he said.
The country's Communist leadership only allowed the Internet into Vietnam in 1997, and access is restricted through filtering software.
But that hasn't stopped information technology from blossoming into a $290 million market that could more than double by next year, according to the research firm IDG Vietnam. The country is starting to carve a niche for itself as a software development base for clients from North America, Europe and Japan, a new study suggests.
The report, released by Andersen Vietnam Ltd., finds some of the industry's leading names -- IBM, Cisco, Nortel, Hewlett-Packard, Sony and Fuji -- already sending work to Vietnam, although the overall value of contracts remains well below $10 million annually.
"If you want fast turnaround, go somewhere established like India. But if you're looking for a long-term, cost-effective partner, Vietnam has the potential to be that," said Marc Lopatin, director of Research Vietnam, the independent analyst who conducted the study.
The number of U.S. companies seeking to outsource the labor-intensive writing of code to cheaper locales will grow by 50 percent in the next two years, Forrester Research predicts.
Vietnamese programmers charge less than half what their counterparts in India make. Including overhead charges, corporate customers pay about $20,000 per person per year in Vietnam, compared with $30,000 in Russia or Romania and $40,000 in India, Research Vietnam says.
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