Where Are The Jobs? IT ServicesWhere Are The Jobs? IT Services

IT services firms employ 1.27 million people, not even 1% of the nearly 135.4 million nonfarm workers in America. Yet the growth in IT services employment last month represented 10.4% of all new jobs in the United States.Of the 113,000 jobs added to the economy in July, 11,800 were hired by firms specializing in computer systems design and related services, according to the Bureau of Labor Statistics.

In the past year, the U.S. economy added 1.74 million jobs, for an anemic 1.3% gain. IT services firms added 82,800 jobs, up a vigorous 7%. That means IT services companies created nearly 5% of all new jobs this past year.

But other IT sectors didn't fare as well.

Computer and peripheral manufacturers saw their payrolls slip this past year by 4,400, or 2.1%, to 203,200. Not only is foreign competition a factor in declining domestic hardware sales, but the reliability and durability of many IT products mean companies don't replenish them as often as they did in the past. Plus companies don't need as much hardware as in the past because of technologies such as virtualization, which partitions a server to run multiple applications. Lucent Technologies, for instance, runs its apps on 4,000 servers, down from 6,500 just a few years ago.

ISP, search portal, and data processing firms experienced a slight decline in employment, falling 2,900 to 380,500 jobs last month, a reflection of the maturing of this sector. Still, that's 1.8% higher from July 2005.

Why are IT services firms hiring while other tech sectors experience a malaise? Simply, companies need to find experts to help them exploit their existing IT infrastructure to help grow their businesses.