IT Hiring Growth Slows For Third Month In A Row

May 13, 2013 Jenny Thomas

We are not even to summer yet and the hopeful prognostications of 2013 being the year of the rebound in the IT jobs market is melting away faster than the winter snow. The good folks at Janco Associates, who keep a close eye on IT industry trends, are reporting slow growth in IT hiring for the third month in a row.

It is human nature to start a new year with an optimistic outlook for the coming months, anticipating happy and prosperous times ahead. At the beginning of 2013 we were reporting on a IT job explosion in North America with news of a spike in the number of new jobs for IT professionals in January. By March, the downward slide had begun 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. By April, reality set in as CIOs began to move with caution on new IT hiring Janco and the rate of job creation in the IT job market dropped from approximately 300 jobs in February to 5,400 jobs created for IT professionals in March.

Now we are in May, and looking back at the just-completed month of April we see the news is the same: Fewer new jobs for IT professionals. According to data released from Janco, even as the national unemployment level falls to 7.5 percent, growth of IT jobs has plummeted from a peak of 11,700 jobs added in January to only 4,600 new jobs in April.

The numbers tell the story of the downward trend in new IT job creation.

Victor Janulaitis, CEO of Janco Associates, says there are myriad reasons for the slowdown, including: no manufacturing jobs were added in April; the uncertainty of new taxes; and the fact that more people continue to remain out of the job market.

“If you look at the stock market, you would think that everything is great,” Janulaitis said. “However, there is concern that the pace of the recovery is too slow to generate sufficient demand for new technology and systems, which would result in more IT pros being hired.”

Janulaitis said his company takes the Bureau of Labor Statistics data for the number IT pros employed and compares it with its own independent survey of 98 CIOs in North America. The somber result is a strong case can be made that IT hiring will not improve significantly for some time. “Our data shows that fewer than one in ten of the CIOs we talked to are looking to expand the size of their IT departments,” Janulaitis said. “But on the bright side, we continue to see demand for mid-level security and compliance managers to assist with the implementations of more web-enabled applications and meeting compliance requirements.”

The concern that tends to be overlooked is that the data shows the labor market participation rate remains at record low levels. Janco reports the macro trend for labor participation is the lowest since 1979, and the true unemployment rate would be over 11 percent if those who have dropped out of the labor market were to start looking for employment again.

“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 low,” Janulaitis said, speculating that overall IT job market growth could fall back to the levels of 2010 and 2011.

The only area where Janco can find any glimmer of growth remains in the healthcare job market. The rest of us will have to hang on and hope for better days ahead.