CIOs Move With Caution On New IT Hiring
April 15, 2013 Jenny Thomas
Up, down, up, down. It’s not just the latest data on job numbers that might make you feel a little queasy, it’s also the way those numbers have fluctuated since the beginning of 2013. And it looks like we’re in for another gut-busting drop.
In February we reported on a job explosion in North America with news of a spike in the number of new jobs for IT professionals in the first month of 2013. By March, the outlook was decidedly less peppy when we told you about slower than anticipated growth of 5,700 new jobs in February from a high of 9,800 new jobs in January. But the expectation was still hopeful for a rebound.
That was last month. This month, the latest predictions coming from Janco Associates have lost the optimistic undertone as the number of new IT job opportunities continues to slow at a faster pace.
Janco reports the latest U.S. Bureau of Labor Statistics (BLS) data shows a slowing in the rate of job creation in the IT job market. March saw another drop, down approximately 300 jobs from February to 5,400 jobs created for IT professionals in March, but the sobering news comes from the forecast for the remainder of 2013.
“For the first time since the dot-com bust, Janco’s metrics show that hiring by CIOs is at a standstill,” said Victor Janulaitis, CEO of Janco Associates, “there is a high degree of uncertainty in the economic climate.”
Janco conducted its own telephone survey in March of 97 CIOs in North America and compared the results with the reported number of employed IT professionals. The conclusion: IT hiring has come to a standstill with only 12 percent of CIOs interviewed by Janco reporting they will be looking to expand the size of their IT departments.
In fact, more CIOs are telling Janco that hiring is limited to replacement of critical staff, and new positions are almost nonexistent, as illustrated in the chart below.
While this graphic isn’t alarming on the surface, the one decrease in March in “computer systems design related services” is a small 3.3 percent; it’s the trend for the future we need to be watching.
“CIOs continue to closely manage their overall FTE [full time equivalent] headcounts level and are adding staff for critical new developments,” Janulaitis said. “The number of CIOs who are bullish has declined.”
Janulaitis added that Janco continues to be concerned that the data shows the labor market participation rate remains at record low levels. “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.”
Is there any good news? Janco did report that the greatest demand seems to be for mid-level security and compliance managers to assist with the implementations for more web-enabled applications. Also, the healthcare job market continues to be a bright spot on the overall U.S. labor market and is one area where opportunities are still flourishing for IT professionals.
For the rest of us, there’s nothing wrong with hoping for an upswing in the numbers next month.