Tech employment shrinks for fifth straight month

The number of IT workers in the U.S. has declined steadily since December, a trend that wasn't helped by Hewlett Packard Co.'s announcement last week that it is cutting 6,000 employees..

The number of U.S. technology workers peaked last November at 4.058 million, according to the TechServe Alliance (formerly the National Association of Computer Consultants), which analyzes federal labor data on IT-related occupations. By the end of April, the number had declined to 3.87 million, the alliance said.

IT recruiters are mostly optimistic that the end of the decline is in sight, though most agree that the IT labor force will continue to shrink through the summer, typically a period of slower hiring because of vacations.

“I think we are definitely going to see a solid year of decline,” said Mark Roberts, CEO of TechServe. And when companies start hiring, they will likely hire contract labor before permanent staff “because people are going to be cautious coming out of a painful recession.”

Companies “are still cutting and I think there will be some more cuts,” said Steve Watson, international chairman and managing director of recruiting firm Stanton Chase International in Dallas. But Watson also noted that he is optimistic that hiring will resume by the end of 2009 due to a pent-up demand for corporate and government IT projects.

California, Florida and the city of Detroit are among the hardest hit regions for IT employment, though demand continues to be strong in isolated areas, such as Nashville, which houses a number of health care firms that are hiring, said Sid Mitchener, a partner in the Raleigh, N.C. offices of recruiting firm Vaco LLC. However, he did note that the salaries of workers taking on new IT jobs are generally 10% to 20% below what the same positions received last year.

Tuck Rickards, leader of the technology sector at New York-based Russell Reynolds Associates Inc., said recruitment efforts for IT workers “feels more active to us” since the end of March. He cited several firms seeking CIOs with the ability to restructure an organization, improve its efficiency and generate revenue producing ideas. “There is a fair amount of turnover in the CIO function,” he said.

Genworth Financial Inc. is continuing to recruit top IT talent even after cutting 1,000 jobs in multiple departments, including IT, in December. Michael McGarry, CTO of the Richmond Va.-based insurance firm, said he continues to compete for top IT talent to fill jobs lost through attrition, and to fill its executive leadership program for college graduates. “The competition for top talent feels [at least as] as fierce, as ever. It does feel like business as usual,” he said

McGarry said Genworth Financial Inc. is looking for people who have strong technical skills and awareness of all areas of IT, but with mastery of at least one technical area. They are also seeking people with business leadership skills, although the need for that may vary by the nature of the work.

Want to compare storage products? Visit the IT Product Guides now.The competition for people with networking and security skills, in particular, seems “more intense,” and with a recovery the competition for such jobs will only increase, said McGarry.