Gloomy IT Job Market May Perk Up In 2002Gloomy IT Job Market May Perk Up In 2002

Rocky Parker, human-resources officer at Nationwide Insurance Systems, the IT division of $32.8 million-a-year Nationwide Insurance, plans to add IT staff this year as part of the company's strategy to increase customer-service communications and meet other business goals. But instead of relying on pricey recruiters to find candidates, he plans to first fill jobs from a less-expensive source: the company's existing IT workforce.

The Columbus, Ohio, company is still going outside for a few jobs, Parker says. "But we're doing more reshuffling within our existing resources to take full advantage of knowledge in-house and meet career-development tracks," he says.

The situation at Nationwide reflects the outlook of the entire IT job market for 2002. Employment opportunities in IT will never disappear, but jobs this year will be harder to find and applicants will face tougher competition. Case in point: The Nationwide Insurance Careers Web site receives an average of 137 resumés per day. Though applicants are interested in a variety of positions, the quality of those for IT positions has drastically improved, Parker says.

The dot-com crash and the recession have created a difficult job market for technology workers. IT unemployment rates are higher than that of the general workforce for the first time in more than a decade. And improvement is expected to be slow. In a November survey of 1,400 CIOs on their IT hiring plans for the first quarter, only 15% say they plan to increase their staff, while about 4% expect to lay off staff, according to IT recruitment firm RHI Consulting. Nearly 80% expect no change in their IT staffing during the quarter.

"At a time like this, when the economy weakens, companies are all ROI-based," says RHI Consulting executive director Katherine Spencer Lee. "They look at saving time, saving money, cutting costs and expenses, while trying to increase revenue."

One who agrees with that assessment is Randy Kraft, director of IT at National Air Cargo Inc., a privately held transportation company in Orchard Park, N.Y. He and his four full-time IT staffers have "tons of new projects" planned for the year, but there's no plan to hire additional help, he says. "We're budgeted to maintain the current size through 2002 and plan to bring in contractors for database projects."

The hiring outlook appears bleakest for entry-level IT workers. Computer science degrees remain in high demand, ranking second in the hiring plans of 457 employers polled by the National Association of Colleges and Employers in its Job Outlook 2002 survey. Overall, those surveyed expect to hire 20% fewer graduates compared with last year, and 30% say they'll hire fewer graduates from the class of 2002.

People with graduate degrees are faring no better, says Kristi Mitchell, external affairs director at the School of Information Management and Systems at the University of California, Berkeley. Most of the graduate school's 2001 graduates have found jobs, but "there's still a handful of extremely experienced folks without jobs," she says.

Internships, which are often grudgingly accepted by candidates as alternatives to jobs, are even harder to find. "It takes a lot of time to train interns," Mitchell says, "and employees don't have the time to spare when doing their jobs and their laid-off neighbor's as well."

RHI Consulting's Lee recommends that job seekers look to industries that have remained unscathed by the economy's downturn or that have increasing revenue. "Biotechnology is very hot," she says, "as well as the health-care and pharmaceutical industries."

Financial-services companies are also expected to increase their IT workforces. Bank One Corp., the nation's sixth-largest bank, plans to hire 600 IT workers, mainly in systems and client-server engineering, development systems, and Web developing.

Long term, the prospects for IT workers are very good, says Diane Tunick Morello, Gartner VP and research director. "Any organization that's doing its business through the Net will be hiring," Tunick says, noting that those with expertise in technology areas related to security, business continuity, network reliability, and collaborative tools are still in demand.

There are signs that the IT job market is improving. Morgan Stanley Dean Witter & Co.'s index of online technology job postings showed growth in the month ending Dec. 9 after six months of decline. And several businesses have contacted Gartner in recent months to flesh out job descriptions for newly created security positions, says Barbara Gomolski, Gartner research director. "Companies had the basics covered, with security folks at the systems level but no one with the big picture," she says. "Security is a priority right now."

Still, the jobs may not be as appealing as in the past. Gartner expects IT workloads to increase 50% by 2005. And that could spell problems in the future once the job market improves. Gomolski says companies that overload their IT workers could see them leave in a year once their job options improve.