Is IT hiring picking up?

A number of signs point to increasing demand for tech workers, but not all the clouds have been driven away. Gain or drain?

Joe Fuller is looking for a few good techies in the United States.

Fuller is chief technology officer of online classified-ad company Trader Electronic Media, a division of Trader Publishing, which expanded its information technology staff from 60 to 70 in the last quarter. And the Virginia Beach, Va.-based firm isn't done hiring IT employees. "We're planning to add probably eight more in the next six months," Fuller said.


What's new:
Online ads for tech jobs are increasing, IT services companies are hiring and analysts are warning companies to take steps to retain prized workers.

Bottom line:
Not all the clouds have been dispersed. Declining tech employment, job cuts and "offshoring" paint a less optimistic picture.

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Fuller's IT expansion is one piece of a puzzling set of data about whether the job market is improving for U.S. techies. On the one hand, online ads for tech jobs are increasing, IT services companies are hiring, and analysts are warning companies to take steps to retain prized workers as the job market tightens.

Diane Berry, an analyst at research firm Gartner, goes so far as to predict a shortage of technology professionals in the United States in the near future, thanks to factors such as declining student interest in the tech field. "Within the next three to five years, the labor problem in IT (for example, unemployment) will reverse course, and there won't be enough IT workers in the United States to satisfy the demand," Berry said in an e-mail.

The unemployment rate for people in computer and math occupations has dropped to an average of 4.5 percent for the first three quarters of this year, from an average of 5.6 percent during the first three quarters of 2003, according to U.S. Department of Labor data.

But not all signs indicate that the job market is turning around for techies, who weathered massive job cuts earlier this decade. For example, the average number of people employed in computer and math occupations during the first three quarters of this year slipped to 3,094,000, down 7,000 from the same period in 2003. That, coupled with the lower unemployment rate, suggests that some techies left the field, possibly discouraged by grim job prospects.

Ken Warner, who has 15 years of experience as a Unix programmer, is a case in point. The Mammoth Lakes, Calif., resident hasn't been able to get work since mid-2001, despite applying for more than 100 jobs. "I doubt if I ever will work as a programmer again," he said in an e-mail. "I've pretty much stopped sending out my resume."

Offshore tsunami coming?
Other factors working against tech professionals include the rise of so-called "offshoring"--when tasks such as programming get sent to low-wage nations. Research firm IDC on Monday predicted that the worldwide market for offshore information technology services will more than double between 2003 and 2008 to $17 billion, suggesting that U.S. techies will lose jobs to countries such as India and the Philippines.

In addition, announced job cuts in the technology sector hit 54,701 in the third quarter, up 60 percent from the second quarter, according to a report this week from an employment services firm.

That study comes on the heels of a report from the Information Technology Association of America trade group, which found that hiring managers have less ambitious plans for filling IT posts this year compared with last year.

But ITAA's report came from data collected early in the year. Bob Cohen, ITAA vice president, said he's since heard anecdotal evidence of a hiring pickup. "It certainly is encouraging," he said. "A lot of it is tied to the economy and discretionary spending by businesses."

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