Is the IT Profession Recession Proof?
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The last time the national unemployment rate hovered around 6 percent, five years ago, IT joblessness wasn't much different. Indeed, in the first quarter of 2003, IT unemployment at 6.1 percent edged above the 5.9 percent national rate, the only time this decade that happened. Today, as national joblessness again tops 6 percent, the IT unemployment rate is about 3½ points lower. That raises the question, are IT occupations recession proof? |
No doubt, IT professionals are among many of the hundreds of thousands of American workers losing their jobs as our economy heads toward a likely recession, but just not as significant as other professions. A CIO Insight analysis of government labor data shows IT unemployment rising 3,000 in the past quarter. Still, IT employment of more than 4 million workers remains near record-high levels.
Historically, IT employment consistently outperformed the overall job market. In the 1990s, the growing adoption of enterprise systems helped fuel business-tech job growth, and the Internet boom of the late-1990s and early 2000s provided an additional catalyst. But the dot-com bust and the recession that followed earlier this decade camouflaged the true strength of the IT profession. In 2004, some 300,000 IT jobs vanished, but the losses were temporary, and were regained within two years. IT job growth has been on an upward trajectory ever since.
More importantly, at least to the future job prospects of IT professionals, the innovation and massive investments made in the Internet during those boom-to-bust years radically changed the way businesses operates, and at the heart sea-change are IT pros. Whether on corporate payrolls or employed by IT services firms here and abroad, people with business-IT skills will be in demand, even in a weak economy. And, don't think all those IT services jobs will go offshore. Payrolls of IT services firms in the United States have soared by nearly 30 percent since bottoming out after the dot-com bust, an increase of almost 200,000 new IT jobs in that sector alone, according to our analysis of Bureau of Labor Stastics data.
And it's not only business, but society as a whole, that relies on IT to function. That fact will provide technology pros with more job opportunities.
One of the biggest challenges we face is global warming and the need to not only to discover alternatives to fossil fuels, but a better, more efficient way to use energy and manage its distribution. That requires IT.
In the current bestseller—"Hot, Flat and Crowded: Why We Need a Green Revolution and How It Can Renew America"—author and New York Times foreign affairs columnist Thomas Friedman sees the fusion of IT and energy technologies, envisioning
all the power systems in your home ... communicating with all the information systems in your home and that they had all merged into one big seamless platform for using, storing, generating, and even buying and selling clean electronics. It would feel like the information technology revolution and the energy technology revolution, IT and ET, had merged into a single system ... an Energy Internet.
Recession or not, Friedman says the world has no choice but to move toward the Energy Internet, not only for environmental, but for economic and geopolitical reasons as well. And, professionals with IT skills will be needed to build integral components of the clean-energy Web.
Comments (8)
I think IT always gets the short end of the stick in any crisis. We as a whole are always the fall guys (and gals). Many people think we sit around all day doing unimportant things. Truth is we are similar to the firemen waiting at the ready or like scientists working on new technologies. You may think we are wasting time playing games but that is a small percentage who seem to ruin it for the rest of us. In times of need we are always there. Think of us the next time you can get Windows to boot or you can't get access to a file. Without us you will be stuck.
Posted by Allen | October 8, 2008 8:42 AM
IT is usually the one part of a firm which is hidden from job cuts historically. Really only in the 2000/2001 recession did IT suffer significantly, and since the 1960s, IT has historically weathered the storm better than all the other groups within a company.
Today is no different. We have an amazing number of IT openings and you just cannot find people in the high demand areas like .Net, J2EE, Networking and Tech Support, SAP, Business Objects, Great Plains/MS Dynamics application support, EDI, SAN administration, C#, software testing, etc.
I am amazed at how unaffected our customers have been with the overall economy and how strong the demand is for hiring. We are seeing IT hiring boom for people with skills in the above mentioned areas, and demand is increasing my the month.
Posted by Greg David | October 9, 2008 10:21 AM
I'm sorry to pick on you Allen, but your post exemplifies why IT gets a bad rep. Personally, I don't wait until something breaks, so I can rush-in to fix it. I work to try to prevent it from breaking in the first place. A very large percentage of the things that cause downtime, from the desktop to the server room are predictable, and can be monitored and prevented. As IT shifts from the old reactive operational model to a proactive one, the perception as a department that "sits-around," fireman-like or not, will change.
Posted by Gregory Conterio | October 10, 2008 8:57 AM
The analysis is purely based on numbers due job losses. There is one very crucial employment source in the IT industry called contract worker / temp workers / 1099 - they may fall into one of these categories. The employer pays them on hourly basis and doesn't provide any benefits.
The IT industry off late has gone sea of change in recruitment process. Without hiring full time they get the job done through temp workers and in bad times fire temp workers first ( these numbers are not accounted for when a company releases its job losses or layoffs). Hence they get away by showing meager lay off numbers when compared to other industries, which in actuality is not true.
Posted by Blogger | October 10, 2008 9:25 AM
You have my vote. What we do for a living isn't for everyone and by no means is it easy to do. We are always working to find more efficient ways for our customer to streamline and do business. But when things don't go right, its our fault. I always tell people, "I don't make the problems, but I'm always expected to fix them." This is not simple to do for anyone in our line of work. Even when we are not tearing networks apart or reading technical documents, we are always learning new practices to benefit you.
Posted by Earl | October 10, 2008 9:31 AM
"The most likely way the world will be destroyed, most experts agree, is by accident. That's where we com in; we're computer professionals. We cause accidents" —Nathaniel Borenstein, as quoted in The Visible Ops Handbook by Behr, Kim & Spafford.
Let's face it, we are an indispensable class of workers, and hopefully job security is a result. I second Gregory's comment, and I highly recommend the Visible Ops Handbook for one perspective on how to climb out of the reactive mode of IT management.
Posted by Matt | October 10, 2008 1:41 PM
Well, there is not much to cut from most IT departments.
Add to this the fact that more and more IT activities are part of strategic side of the business and are funded well in advance.
Efficient staffing by CIOs through on-demand contracting is definitely helping with these job numbers.
While most IT activities are budgeted for 2008 and possibly even 2009, within the next year or so, following will affect IT funding:
1. The much advertised "credit crunch"--depending on how deep and wide it really is.
2. Redundancies and strategy shifts resulting from the on-going mega mergers in the finance industry.
Posted by RR | October 11, 2008 3:58 PM
... keeping an IT futures analysis ground is wise...
IT professionals in business be both their present and future on meeting the vital needs of business. This tough environment is one of the reasons that IT may be better positioned for surviving tough times.
I worry that the following statements may reduce the credibility of your voice. Information technology cannot be the savior of the human race alone, a wider plan for this is needed. That IT can do its part, I am glad for that.
"...And it's not only business, but society as a whole, that relies on IT to function. That fact will provide technology pros with more job opportunities.
One of the biggest challenges we face is global warming ..."
Posted by Don Turnblade | October 21, 2008 2:44 PM