IT Hiring Stalls - new job creation is almost nonexistent
BLS data shows new job creation is almost nonexistent, hiring is limited to replacing critical staff according to Janco Associates
IT Hiring Stalls - new job creation is almost nonexistent - Job creation in the IT market has slowed, according to the latest data from the Bureau of Labor statistics.
"According to BLS there were only 5,400 jobs created for IT professionals – down from 9,800 created in January," said M.V. Janulaitis, CEO of IT consulting company Janco Associates, adding that more people are leaving the job market, contributing to falling unemployment numbers.
"For the first time since the dot com bust, Janco's metrics show that hiring by CIOs is at a standstill – there is a high degree of uncertainty in the economic climate," Janulaitis said. "We looked at the number of IT pros employed and compared that with our own independent survey of 97 CIOs in North America, and conclude that the hiring has come to a standstill. Only 12 percent of the CIOs that we interviewed are looking to expand the size of their IT departments."
Despite declining demand overall, Janulaitis said demand is increasing for mid-level security and compliance managers to assist with the implementations of web-enabled applications.
In addition to BLS data showing record-low labor market participation levels, Janco notes that the sequester increases the likelihood the economic recovery could falter and job growth could slow further.
"The true unemployment rate would be over 11 percent," if it included those people who have dropped out of the labor market, Janulaitis said. "The year-to-year comparison of workforce participation shows how deep a hole we are in. Until those percentages turn around, the overall recovery will be weak at best. If that is the case, then there is a strong possibility that IT demand will be dampened, and overall IT job market size could fall back to the levels of 2010 and 2011."
Many CIOs have become more cautions in the past month, according to results of recent Janco survey, Janulaitis said.
"In telephone interviews of 97 US based CIOs in late March, we found that many companies are uncertain of which way the economy is going with sequester, tax increases and unstable world political situation. CIOs continue to closely manage their overall FTE (full time equivalent) headcounts level and adding staff for critical new developments," Janulaitis said, adding that the number of bullish CIOs has declined.
One notable exception is in the health care sector, where the IT job market continues to expand, which Janulaitis attributes to the implementation of electronic patient records (see chart above).