Are employers pulling back on IT hiring?
Analysts have different views of May's dismal U.S. jobs data from an IT perspective
by Patrick Thibodeau
Are employers pulling back on IT hiring? - Analysts who track IT employment are offering starkly different views of IT hiring that range from still healthy to troubling. The U.S. overall only added 69,000 net new jobs in May, according to the Labor Department, a report that triggered a sharp stock market decline on Friday.
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But there's no consensus on how IT employment fared last month because of the different ways analysts examine government labor data. An optimistic view of IT employment in May was offered by the TechServe Alliance, an industry group that tracks IT employment month to month. The group said IT employment increased by 15,500 during the month, putting IT employment nationally at 4.179 million, a new high and a 2.71% more than a year earlier.
In April, the group reported 17,000 new IT jobs. "IT [employment] remains robust, without question," said the CEO of the alliance. "Corporations are still investing in technology and when you invest you need to have people to develop and maintain it."
The alliance, similar to other labor analysts, uses U.S. Bureau of Labor Statistics (BLS) Data, but also notes that it examines IT employment in more than 20 non-IT industries, such as trucking, so employment numbers are typically higher than those reported by others.
Other analysts look at IT industry specific categories.
The CEO of Foote Partners, estimates that the BLS IT labor categories represent about one fifth of all the people who work in IT. Foote Partners counted a net gain in May of 5,200 jobs across four IT job segments, the third weak month in a row by its count. The jobs data "is not going in the right direction," said Foote. "People are getting nervous and at this point the trend is not to hire." By Foote's analysis, in the BLS categories it tracks, IT employment has increased by 45,000 jobs over the last seven months, and that hiring is now flattening. But Foote believes that government data is missing new and emerging IT skill sets in its data, particularly those that combine business and tech skills.
Janco Associates estimates that the net number of new IT in May was only 200, versus 6,600 added in April. The difference in Janco's estimate is explained, in part, by the decision not to include the BLS category of management and technical consulting services, which saw an increase. Janco says the percentage of IT pros in that group may be low.
The company's most recent CIO survey of just over 100 executives in May found that most plan to keep overall headcounts level "and do not see any increase in permanent staffing within the next few months," said Janco CEO Victor Janulaitis. Something that may impact the IT jobs number in the months ahead is Hewlett-Packard's recent announcement that it plans to cut 9,000 employees by the close of its fiscal year, Oct. 31, and a total of 27,000 over the next two years.
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