Workers in Driver's Seat in 2006 Job Market

Last year's growth in the IT job market is washing over into 2006, potentially making this the first ''workers' market'' in four or five years.
IT professionals on the job hunt should be looking at the first ''workers' market'' to come around in several years, especially if they're project managers or have open source experience.

Last year's growth in the IT job market is spilling over into the new year, leaving many industry analysts optimistic that increased budgets and infrastructure upgrades will continue to increase demand for experienced tech workers. See The Hot Jobs for 2006.

''Overall, 2005 was a great year for the tech job market,'' says Scott Melland, president and CEO of New York-based Dice Inc., an online recruiting service for IT professionals. ''Between December of 2004 and December 2005, the number of postings on our site were up 40 percent... Growth has slowed but I think 40 percent is terrific.

''And I think it's going to be another strong year,'' he adds. ''I think it actually is a worker's market. It's a very solid job market... But companies are very choosey. They're looking for people with specific experience.''

And those experienced workers can expect to see a 5 percent bump in their salaries this year, along with some bonus incentive, Melland notes.

The IT job market got a boost in 2005 partly because of the increase in full-time positions that were beginning to be filled. After the tech boom went bust early in the century, many job postings were for part-time or consulting work. That, according to Melland, has been turning around.

''The shift from part-time to full-time has happened,'' Melland told Datamation. ''When the markets started to turn in '03 and into '04, the first hirings were part-time and contractor-type positions. But last year we saw an increase of 66 percent for full-time positions. That really shows that companies are confidant enough in their business that they're hiring full-time. They're building their tech staff.''

And these positive changes have increased tech workers' confidence after several years of hard times and uncertainty, says Kevin Knaul, executive vice president of the Hudson Highland Group, a professional staffing and outsourcing company based in New York City.

''IT people did lose confidence [earlier] in 2005, but our latest surveys show that there's an up tick in confidence,'' he says. ''There's some apprehension as they move into the new year and projects are being finished up. Budgets are getting proofed so there's some uncertainty for people who work project to project... But expectations are for increased spending by 5.5 percent.

''We expect 2006 to be a great year,'' Knaul adds.

Spending Drives Hiring

John Challenger, chief executive officer of Challenger, Gray & Christmas, a Chicago-based outplacement company, says that increased spending is the key to 2006 job growth.

''Business profitability has been very strong for three years now but business profitability usually translates into reinvestment into infrastructure,'' says Challenger, whose company also tracks job cuts. ''People are looking for 2006 to be the year when spending picks back up. They can't keep saving it for a rainy day. They need to reinvest, and if that happens, it could be very good for technology jobs.''

Slightly more optimistic than Hudson's estimate, Dice's Melland says he's expecting a 7 percent growth in tech spending. And that should put the industry into an upgrade cycle, driving hiring, especially in positions that will deal with projects, teams and infrastructure upgrades.

''I'd expect job demand to increase again in core skill sets, especially project management,'' says Melland. ''There will be large demand for people to run these infrastructure projects -- new servers, new networks, new storage systems.

''But people should not think it's going to be '99 again,'' he adds. ''I don't think we'll ever see that again in our lifetime. Actually, I hope we don't see it again. The convergence of Y2K and the Internet boom at the exact same time as the telecom boom -- I don't think we'll see that again. It was crazy and it was not sustainable. What we've got now is very good. It's nice steady growth in core skill sets even with large growth in offshoring.''

Many industry observers have been highly concerned about the offshoring trend that has gripped the industry for the past few years. At first, low-level jobs, such as call centers and entry-level programming, were shipped overseas where the labor could be had much cheaper. Then mid-level jobs began to follow, increasing the sense of urgency among U.S. tech workers.

For some time, programming was thought to be lost to offshoring. Analysts warned that people who were programmers should run, not walk, back to school to learn a new skill. But application development started to make a comeback last year.

By mid-summer, programmers were the most sought-after IT profession, according to figures from Dice. Both Melland and Challenger say programming continues to be a hot job, despite offshoring's effect on entry-level developer positions.

''Companies need to reinvest in technology and they're going to need developers to build the systems for their operations,'' says Challenger. ''They're going to be very important to the growth of companies. They can't take systems off the shelf and plug them in. They need to be tailored to the business. Developers are going to be key to that. If we have a whole new wave of technology that is being developed around search and wireless applications, then you're going to need developers for that. And gaming technologies are going great guns. I don't see any slowdown here.''

And where will all of this high-tech job growth occur?

The big three markets -- Silicon Valley, Washington, D.C. and New York City -- are still the largest draws, according to Melland. Other areas, though, started to show some progress this past year. Melland notes that Boston's hiring was up by 79 percent, Philadelphia was up 69 percent and Atlanta was up 53 percent. Chicago was on the lower end of the growth scale with 27 percent.

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