Commentary: Jobs outpace workers

Despite the current slackening in demand, the overall message is that there are still too few people and that they still cost too much.

3 min read

There are still too few candidates for IT jobs.

That's in spite of recent statistics on demand for IT workers--such as a report

See news story:
Laid-off techies take the world by storm
from the Information Technology Association of America showing that demand for U.S. technical workers fell 44 percent in the past year-which document a slowdown in demand that we had expected.

We previously expected nearly 1 million unfilled jobs based on the dot-com boom, and with the dot-bomb trend and slowing economy we now have about half that if you accept the ITAA's figures. The figure is probably closer to 600,000 unfilled jobs. This lessening of demand actually brings the number of unfilled jobs closer to our predictions of early last year, before the dot-com boom exploded company expectations of need. U.S. Department of Labor statistics that came out at the end of November indicated 850,000 unfilled openings.

Despite the current slackening in demand, the overall message is that there are still too few people and that they still cost too much. Organizations must be prepared for a continuing shortage, because if the present economic downturn is just a bump in the road, they will need more IT professionals than they expect. Obviously, if this is the start of a long downturn across the entire economy, all bets are off.

Demand is lessening in some categories. One of the first of those is consultants, as the consulting marketplace is being hit hard by the downturn. However, our clients are telling us that they expect high demand to continue in key areas such as infrastructure, networking, and e-business, specifically business-to-business (B2B) initiatives.

It is clearly easier to hire than it was a year ago. However, the current hot-off-the-press staffing survey results indicate that turnover has dropped only one percentage point, and average turnover continues to be relatively high, ranging from 10 percent to 15 percent, compared with 11 percent to 14 percent last year.

Our clients have yet to indicate any widespread cutbacks and are evenly split between expecting budgets to grow or stay the same. Only 15 percent of our clients expect budgets to be cut. In any case, where IT is concerned, good people are almost always in high demand.

Good people are also rare in the marketplace. Despite the many highly publicized layoffs, companies will hold onto their good people as long as they stay in business. The danger is that good people leave for better positions. Companies need to focus on keeping their top performers and use the downturn to reassign or let go of lesser-quality performers.

Despite the current economic downturn, the lack of competent IT staff is still having a dampening effect on the economy. Therefore, companies need to concentrate on the productivity quotient--technology plus savvy people who translate the technology to drive productivity and profitability.

Meta Group analysts Val Sribar, Maria Schafer, David Cearley, Jack Gold and William Zachmann contributed to this article.

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