Last week, the Information Technology Association of America (ITAA) released a report declaring that the recovery of the IT job market was "off to a shaky start." According to the analysis of a telephone survey of 500 hiring managers from both IT and non-IT companies across the country, the ITAA says that the IT workforce grew to only 10.5 million jobs so far in 2004. That represents only about a 2% increase over 2003. Meanwhile, the demand for new workers continues to drop, according to the ITAA. Companies told ITAA that they will fill 270,000 fewer jobs this year than in 2003.

Highlights

The ITAA's annual survey identified that there were about 10.5 million IT jobs in the first quarter of 2004. And nearly 90% of the 213,639 new jobs that have been created were in non-IT companies, such as banking, finance, manufacturing, food service, and transportation.

• The Northeast was the hottest market for IT jobs, representing about 5% of the total gains in IT job creation.
• The Western states lost IT jobs, losing about 0.7% of the IT job pie.
• The Southern states are home to the largest population of IT workers, representing about 3 million employees.
• The Midwest IT job market represented a meager 2.6% of the overall growth.
• The largest segment of job growth was in the area of IT support, adding about 67,000 employees overall. Network support and programming services also represented a large proportion of the numbers that were added to the market, but no statistics were provided.
• Security administration was perceived as a compelling future job credential for the next four to five years, primarily based upon the increased emphasis on data security in the workplace and the fear of terrorism.
• Global outsourcing continues to impact IT job growth in the U.S., but the report provided no statistics to quantify this impact.

What Went Wrong?

According to ITAA President Harris N. Miller, "This is still not the job market America's IT workers have been hoping for."

Yet, as recently as three months ago, Miller was declaring a resurgence in IT's job growth: "The positive job growth we're now experiencing is not just limited to today," Miller said. "Particularly in the IT sector, we anticipate that this growth will continue in the future. While a result of the global economy is ultimately the outsourcing of certain jobs at the bottom of the employment pyramid, new, better jobs are also created domestically. Our challenge is to make sure that U.S. workers are ready to step in and fill these positions."

But it didn't happen! These jobs did not appear in the employment market, and Miller now admits that the market is actually sliding backward.

According to Miller last week, "Instead, increased competition appears to be the rule for 2004 here and abroad. The U.S. workforce is not giving up its edge without a fight, but as an industry and as a nation, we must become more competitive if we are to retain our standing as the world's innovators."

Such brave words for the unemployed and under-employed IT workers in this country!

Impacts on Sliding Job Growth

So what, according to the ITAA, are the factors that are impeding IT job growth? The report cites six:

• General Economic Conditions--Despite claims by the current administration that typify the current economy as "robust," hiring managers of local and domestic businesses said they are not experiencing enough economic surge to encourage IT hiring. This lack of economic resilience is hampering overall employment growth and IT job growth in particular.
• Productivity Increases--Increases in personal productivity and cost-cutting measures within organizations are also delaying the hiring of new IT workers.
• Benefits--The skyrocketing costs of employee benefits, particularly healthcare benefits, are creating an atmosphere that is inimical to hiring additional staff.
• Business Objective Cost-Benefit Analysis--Companies said they have begun utilizing cost-benefit analysis processes to determine the viability of achieving their business goals without hiring additional IT staff.
• Global Outsourcing--Companies are looking first to cheaper global outsourcing resources before considering the addition of new staff.
• Technologies and New Business Models--Companies are re-examining their business models in light of new and burgeoning technologies that will reduce the reliance on IT staffing.

Getting the Job

The ITAA says that--according to the survey--the best credentials required to get an IT job today are not necessarily based upon touting the best job skills. According to the report, "Personality is a major plus. In the soft skill area, interpersonal skills drew the most votes from companies of all sizes--twice as important as project management or team building."

Miller says, "To be successful, IT workers should make themselves as valuable as possible to hiring companies, make themselves the stewards of their own careers, and understand the trends and directions shaping the IT workforce."

However, those trends cited in the report indicate that what employers really want today is not a better skill set, but cheap labor with nice, friendly dispositions and winning personalities.

Meanwhile, Miller chided, "America must do more to provide a better fundamental and vocational education for her workers."

Yet, as already noted, technical credentials or advanced degrees don't necessarily translate to higher employability. According to the report, the best basic background needed to obtain an IT job was simply "experience" and a simple four-year college degree in a related field. Clearly, this is sending a mixed message to those of us within the industry who are attempting to fathom the mysteries of the IT employment scene.

The Impact of the ITAA on Government

It would seem that the ITAA's latest report represents the first sober evaluation of the U.S. IT employment market that it has ever produced. Indeed, in its past reports on the IT workforce, this organization stressed the ballooning personnel requirements for new IT workers in the U.S. and successfully used that argument to lobby for increased numbers of H-1B visas to allow non-U.S. IT workers into the country.

As late as 2000, the ITAA was lobbying the U.S. Congress to quickly pass new legislation to dramatically increase the cap on H-1B visas, even while the dot-com investment bubble was imploding.

And as recently as June of last year, Miller, as the president of ITAA, was appearing before the Senate Foreign Relations Committee asking for further tax concessions for U.S. IT companies that sought to outsource their work to other nations.

Year after year, over the past 10 years, the ITAA has labored diligently to lower the cost of offshore investment opportunities, to reduce taxes and tariffs on international services, and to convince Congress that the ITAA was representing the good of the IT industry as a whole. In actuality, each step has initiated demands on Congress to substantially lower the value of domestic IT workers to the economy as a whole.

Representing IT

Before the Senate, Miller says he represents the IT industry. But by his own statements in the testimony before those members, he acknowledged that his organization represents only 400 members, "many of whom are global information technology companies generating 50% or more of their sales revenues in overseas markets." In fact, the ITAA's executive membership consists primarily of global international corporations that have substantial contracts with the U.S. government itself.

In short, the ITAA is a lobbying organization that represents neither the domestic IT industry nor the domestic IT workers, but a narrow band of global IT industrialists and financiers who are intent upon maximizing their investments by lobbying the representatives of Congress. This is not hyperbole. In a recent article in MC Mag Online ("ITAA: Global IT Outsourcing to Grow at 26%"), we documented that the ITAA actually represents the IT outsourcing industry, with its association officers originating directly from companies that have major financial investments in global outsourcing.

ITAA Change of Heart? No Way!

Yet, perhaps the ITAA's sobering employment report has finally awakened it to the threat that the current economic structure is creating for the U.S.

Not so! In the ITAA's "Short List for Congressional Action," released just two weeks ago to both the House and Senate, three of its top seven requests to Congress attempt to derail current legislation designed to curb the abuses of outsourcing and H-1B visas on the U.S. IT workforce:

• Pull the Dodd Amendment, which limits offshore outsourcing of government services.
• Pull the Kaptur Amendment, which prohibits the offshore outsourcing of food stamp programs, from the Agriculture Department appropriations bill.
• Exclude from the cap on H-1B visas those foreign-born individuals who have earned PhDs or Masters degrees from U.S. institutions.

Only the issue of asking Congress to grant it an increased R&D tax credit rated higher on the ITAA's priority list. And, in fact, there is little doubt that these lobbying requests will be dutifully heeded by the current leadership in Congress. The only doubt in the minds of Congress is in how to postpone action until after the Presidential election.

Friendly Faces in High Places

Clearly, the ITAA must in fact be relishing the slide in the IT job growth rate in the U.S., while simultaneously cajoling the domestic workforce with bland and encouraging remarks about taking responsibility for its own fate. With a lobbying force of such influence and with such a friendly face, who in our IT workforce needs real enemies?

Thomas M. Stockwell is Editor in Chief of MC Press Online, LP.

Thomas M. Stockwell is an independent IT analyst and writer. He is the former Editor in Chief of MC Press Online and Midrange Computing magazine and has over 20 years of experience as a programmer, systems engineer, IT director, industry analyst, author, speaker, consultant, and editor.  

 

Tom works from his home in the Napa Valley in California. He can be reached at ITincendiary.com.

 

 

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