The IT Job Market Is More Competitive, Says Gartner

Published: August 1, 2007

by Timothy Prickett Morgan

According to a new report from IT industry watcher Gartner, chief information officers are having a hard time filling vacant positions in their shops for IT professionals. Specifically, because some IT skills are in high demand, positions are being left open for longer than they would like them to be as candidates pick and choose among job offers.

If Gartner's assessment is right, then this competitive IT job market is a matter of demand exceeding supply and not a drop in supply. But anecdotal evidence from some colleges as well as statistics from the U.S. government would seem to indicate that there is a supply issue at work here as well. This, at least, is the argument that big IT firms like Microsoft, Intel, IBM, and others make before Congress when they are asking lawmakers to raise the limits on H-1B visa entrants into the country. When they are making this argument, all we hear about is how American workers do not have the skills and foreign workers do. And when IT Jungle runs such stories, we get all kinds of feedback from IT professionals with lots of skills who can't find a job.

And with good reason, if you want to try a little bit of hard, cold logic. In last week's issue, Victor Rozek's As I See It: Lawyers, Lies, and Statistics column laid it all out there pretty succinctly:

"It's no coincidence that as the job market turns predatory, American workers have lost their teeth. The numbers tell the tale, and the story told by the Bureau of Labor Statistics is one of betrayal. Between 2000 and 2005, IT employment opportunities in the United States grew by about 332,000 jobs. If those opportunities escaped your notice, there's a good reason. During the same time period, the United States imported about 330,000 H1-B workers to fill many of those jobs. Engineers fared even worse. While 95,000 H1-B visas were issued for engineers, the Department of Labor reports that engineering employment shrank by almost 124,000 jobs."

When you look at those numbers, it is not hard to figure out why and where the stats are being bent, and it goes a long way toward explaining that it is sometimes hard--and maybe often hard--to get a job in IT these days.

To get a sense of what is going on in IT hiring right now in the United States, Gartner did a survey of 225 corporations. Of those surveyed, 66 percent said that they would increase their IT staff sometime between March 2007 and February 2008. This is a little bit higher than a survey done last year, which indicated that about 61 percent of CIOs were going to do some hiring between March 2006 and February 2007. The survey results for the last year, however, show that the employee-initiated turnover rate is rising, up by 1 percent this year compared to the same time last year--and marking the third year in a row that employees were initiating their own moves to new jobs.

"With the competition for IT talent increasing in the market, even a small increase in the number of people who leave that were considered critical talent can cause an immediate and negative impact on the performance of the organization," explained Lily Mok, research director for Gartner EXP's content development group in announcing the results of the study based on the survey, which is called the 2007 IT Market Compensation Study. "Although employee turnover is inevitable, it can be managed by investing in the right retention programs. This year's survey results indicated that pay, career development opportunities, and work/life balance continued to score high as the key reasons for turnover, which point out where companies should focus to increase retention."

While the IT market is tightening, the situation is nothing at all like the dot-com boom from a decade ago. And Mok says that Gartner does not anticipate a return to that crazy market any time soon. The data Gartner has gathered shows a slow, steady recovery in IT, as gauged by average salary budget increases. In this year's survey, the median expected increase in IT salaries was between 3 percent and 4 percent. The balance between work and life is becoming a factor in the data center, and it is one of the top reasons cited by CIOs for IT turnover, in fact. Those companies with flexible hours and telecommuting tend to fare better in retaining employees, but mysteriously, among the companies surveyed, a low of 1 percent to a high of 18 percent of employers' workforces had some option for telecommuting.

"The companies that address the 'whole person' and recognize the multitude of conflicting demands on individuals are often those that become the employers of choice," said Mok. "Such programs not only enhance an employee's loyalty to a company, but also improve their productivity. A key success factor is that IT managers listen to and effectively respond to the needs of their staff as individuals."

On average, the companies surveyed spent about 40 percent of their IT budget on salaries, incentives, and benefits for IT workers.

The 2007 IT Market Compensation Study provides base salary, total cash compensation, and bonus information for 137 IT jobs grouped into 26 categories. It also has lots of advice on recruitment and retention of employees. You can find out more about the study at this link.

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