In-Depth

Careers: IT Employment Rebounds

It’s worth remembering how much the employment outlook has improved in the last half decade—and how far we have still to go

• By Stephen Swoyer
• January 24, 2006

Depending how you look at things, the latest research from the National Association of Computer Consultant Businesses (NACCB) is either encouraging or sobering. NACCB found that IT staffing levels rebounded strongly in 2005—marking a return to form, so to speak, to the post-salad days of 2001. According to the NACCB, a trade association sponsored by prominent IT staffing firms, U.S. IT employment reached 3,527,700 in 2005.

That’s slightly higher than in 2001, when 3,527,100 IT professionals were employed. It’s almost 200,000 better than the IT job market’s lowest point—2002—when employment dropped to 3,339,500.

NACCB principals expect smooth sailing for 2006, too. “Based on reports of IT staffing companies citing high demand for their services, we believe employment in IT staffing is up markedly” said NACCB CEO Mark Roberts, in a statement.

With some industry watchers predicting robust IT budgets in 2006, there’s a lot to recommend such optimism. Consider a recent projection from FedMarket, a researcher that specializes in the federal government sector. According to FedMarket’s newest prospectus, corporations have budgeted $65.1 billion in IT spending for 2006. (This trumps an earlier FedMarket projection, which anticipated $63.3 billion in IT spending in 2007.) On top of that, FedMarket researchers say, as much as $250 billion in long-term federal IT contracts could be up for grabs this year.

Roberts says this is good news for IT staffing firms: After all, when demand for IT skills starts to pick up after a downturn, enterprises often tap IT staffing companies to help them meet their employment needs.

The numbers weren’t all rosy, however. The growth rate of IT hiring actually declined last year. In 2004, for example, U.S. IT employment stood at 3,522,900—a 4.5 percent improvement over 2003’s performance. From 2004 to 2005, the IT hiring rate grew by a paltry 0.13 percent. That’s even worse than the year-over-year increase from 2002 to 2003 of 0.89 percent.

There’s more to it than that, of course. For one thing, IT employment plummeted from August to September of 2005—consistent with the impact of Hurricane Katrina. (The IT employment index was reduced by approximately 10,000 jobs.) That negated otherwise strong growth through the summer months, when—between May and August—about 41,000 new jobs were added to the index. Indeed, it wasn’t until November that IT employment rebounded to pre-Katrina levels, cresting at about 3,552,000 jobs.

“In light of the downward pressure on IT employment following Y2K, the bursting of the Tech Bubble, the 9/11 terrorist attacks, and the 2001 recession, I am heartened by the 2005 employment figures evidencing strong employment growth in IT,” Roberts concluded.