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IT employment may be stabilizing after loss of 250,000 jobs

Signs of hope after nearly 12 months of steady job losses, but pay may be declining

October 30, 2009 06:52 AM ET

Computerworld - The apparent turn in the U.S. economy may have put the brakes on the IT job loss freefall, according to some new data.

Since last November, IT employment has declined by nearly 250,000 jobs, or 6%, after peaking that month at 4.058 million jobs. However, only 1,100 jobs were lost in September, or a .03% decline, according to the TechServe Alliance, an Alexandria, Va.-based industry group that conducts an ongoing analysis of IT occupation data compiled by U.S.

Mark Roberts, CEO of the alliance, which represents IT services companies, consultants and staffing firms that will be among the first to hire out of a recession, said his member firms are indicating that they are expecting more work. IT employment losses began moderating in June.

"Folks are very optimistic about the future based on what they are hearing from their clients. They feel there is a lot of pent-up demand," Roberts said.

The U.S. Commerce Department reported Thursday that the U.S. economy grew by a 3.5% annual rate in the last quarter.

But IT employment is in a trough and so is the pay, according to David Foote, who heads Foote Partners LLC, a Vero Beach, Fla.-based research group that studies IT compensation. Foote said about two-thirds of IT workers have either seen their salaries go down or remain flat over the last year.

"The economy is having a huge impact on [employers] just having the freedom to pay what they want," Foote said.

Jobs board Dice.com reported 53,400 jobs posted Thursday, compared with 75,600 in November.

Nonetheless, Foote said there remain many IT skills that are increasing in value, especially in SAP and security.

Analysts aren't predicting a fast recovery. Research firm Gartner Inc. recently said IT spending wouldn't return to 2008 levels until 2012.

It's difficult to determine the impact of IT consolidations on the job market, including layoffs associated with the pending acquisition of Sun Microsystems Inc. by Oracle Corp. as well as last year's takeover of Electronic Data Systems Inc. by Hewlett-Packard Co., on the total labor market. Moreover, IT jobs continue to move overseas.

In sum, while there may be signs of a stabilizing IT job market, there is still a lot of ground to make up with this year's job losses as well as to make room for those entering the technology field. Foote said the volatility in IT pay is an indication that the hiring recovery will be a slow road.

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