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A New Parachute for 2006

Where are all the tech jobs? A surprising number are not in traditional tech sectors.

Since 1999, the U.S. IT job market has taken some wild swings–burgeoning with opportunities in the dot-com and pre-Y2K era, and then tanking in 2002-04. The 2005 market began to show increases in hiring that were moving IT jobs back to the “normal” levels that existed before 1999. From all indications, it looks like 2006 will also see increases in hiring that continue to build back IT resources that were lost during the lean years.

“We are now seeing increases in IT hiring that are almost across the board,” says Jeff Markham, West Coast Divisional Director for Robert Half Technology. Markham points to a recent IT Hiring Index and Skills Report compiled by Half that indicates that 12 percent of chief information officers plan to add full-time IT staff during the first quarter of 2006–a number almost identical to the levels of fourth quarter 2005–and up from the net nine percent increase that was registered for first quarter 2005.

“Some of the areas that we see as really hot are internal and external IT network security,” says Markham. “Companies want to get their arms around issues like spam and the latest virus definitions. They are also looking for highly specialized security skills at the network infrastructure level.”

The Robert Half survey indicates that 81 percent of 1,400 CIOs across the country were looking to add network administration skills to their staffs. This is happening despite the concern over the past few years that too many IT’ers were flocking to network courses, leading to an overabundance of job applicants. The hiring key is on-the-job experience, and the magic number still seems to be two years in the workforce, working hands-on with networks in an enterprise environment. Trainee or apprentice positions are less likely to be available, unless the apprentice is an employee whom the company wishes to develop, or a student willing to work for low wages in exchange for the training and job experience benefits.

Other areas that the Robert Half Technology survey identified as being in demand included wireless network management (50 percent of CIO respondents were seeking talent in this area) and SQL server management (46 percent).

“Virtually anyone with wireless skills is getting attention in the market,” says Markham. “The jobs might involve handheld devices, or working with global positioning systems (GPS), or wireless voice and data integration. This field in particular has intensified over the past six months.”

In the database area, Markham cites business intelligence applications like data mining and financial report writing. “Overall, we are seeing a trend for companies to focus on IT applications that can directly demonstrate either building revenue or shaving costs,” he says.

Who’s Hiring?

There are few industry sectors not experiencing active hiring. However, there are several that are especially active, including health care, real estate, finance and insurance, advertising/marketing, and legal.

The health care, finance and insurance industries have been hit with a plethora of new regulations and compliance measures that demand either new IT solutions or significant revisions to existing systems. Regulatory impacts in the financial and insurance sectors include Sarbanes-Oxley and privacy of customer information. The health care sector has the same regulatory requirements to meet, in addition to HIPAA standards. Both finance and health care have stringent security requirements–and in both areas, new systems like electronic patient record management (healthcare) and automated loan decisioning software (finance) are increasing the demand for specific pockets of IT expertise.

In real estate and insurance, effort has centered on developing more wireless applications between field-based offices and agents. These applications must be able to communicate back to headquarters databases in real time, and the data and communications that flow between them must be consistent.

Additionally, both the insurance and the real estate industries have made changes in how field agents do business. Many insurance claims adjusters now use wireless communications to “write” their reports directly from the field–and real estate agents use wireless technology to communicate to the office and to research property and listings.

Marketing and advertising are up because they were severely impacted in the 2002-04 recession, and are now making a rebound. Legal sector IT is also thriving, as firms recognize that internal systems and Website capabilities require upgrades.

Where the Jobs Are

IT hiring is going on throughout the U.S., but some regions are hotter than others.

The South Atlantic states are forecasting IT hiring activity well above the national average. Overall, however, the Mountain States are expected to lead all regions of the U.S. in IT hires in first-quarter 2006, with special emphasis on persons with experience in wireless network installations, regulatory compliance, and Internet-related business.

“We’ve already seen a lot of IT hiring activity in the past two quarters of 2005,” says Markham.

There is some speculation that people are looking to relocate to areas where housing costs are less expensive. This makes the Mountain and the Midwest states very attractive.

“One thing we do know,” says Markham, is that when job growth happens, it usually starts on the coasts and then works inland.”

In the face of these geographical trends, there are also some company trends indicating that it’s the larger organizations doing the lion’s share of the hiring. Corporate IT positions that are especially in demand include network administration, user help-desk support, and to a lesser degree, applications development.

The Impact of Outsourcing

Much has been written about companies outsourcing IT jobs abroad, and many people have worried about it.

“Actually, there’s not as much outsourcing as many companies would realistically hope,” says Markham. “A lot of nightmarish scenarios have emerged from outsourcing, with some companies opting to move their call centers back in-house, due to customer complaints.”

What about the recent senate approvals of increased numbers of H1B visas that would allow for more foreign technology workers in the United States?

“The reaction to H1B visas depends on who you ask,” says Markham. “If a company can’t find the programming skills that it needs in the United States, it must look elsewhere to meet its business needs.

“I believe that to the degree these skill sets help companies improve their profit potential and their bottom lines, the end contribution comes back to the U.S. IT job market in the form of more IT jobs.”

Is Tech Now a Mature Field?

With the IT job recession, many began to wonder if IT jobs weren’t going the way of manufacturing jobs–building a case that IT was a mature industry sector that had seen its prime growth years.

However, with a return of IT growth that appears to be bringing hiring levels back up, it might be more accurate to say that we are approaching a realistic IT job market that is healthier than it was in 2002-2004, but not over-inflated as it was during the dot-com and pre-Y2K days.

“I wouldn’t call IT mature,” says Jeff Markham. “I would say instead that it’s maturing, because so many IT initiatives that companies are pursuing now are profit-focused, in contrast to years past, when organizations were more focused on bringing in the latest technology innovations.

“In this environment, the people doing the hiring are looking for hands-on experience. IT professionals need to keep skills fresh, and to demonstrate to potential employers how they can make contributions to the bottom line.”

Mary E. Shacklett is president of Transworld Data, a marketing and technology practice for technology companies and organizations.

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