High-tech workers are being caught in a cross-current.
An uptick in enterprise spending on hardware and infrastructure is boosting the high-tech
job market, but, at the same time, it’s being buffeted back by the number of jobs that are
being lost to off-shore outsourcing, according to the CEO of a global outplacement firm.
“Tech is kind of a mixed picture these days,” says John Challenger, CEO of Challenger,
Gray & Christmas, a Chicago-based outplacement company. ”The offshoring of jobs has become
a real cause for concern. It’s because of the global labor market. And ironically, the
technology has made that an inevitability. It’s become the Napsterization of tech work.”
Challenger’s comments on the high-tech job market come on the heels of two dismal labor
October showed the largest number of job cuts in a single month in the past year. Job losses
last month rang in at 171,874 — a 125 percent jump in layoffs over September’s 76,506 job
cuts. It was the highest monthly figure since October of 2002.
The October surge ended a streak of five consecutive sub-100,000 job-cut months. The lowest
figure during the five-month period was June when 59,715 job cuts were announced.
Challenger sited the fluctuating technology job market and offshore outsourcing as two
factors that led to the high number of job losses last month. And Challenger doesn’t see
much improvement on the near horizon.
In a new poll of human resources executives conducted by Challenger, 78 percent did not
expect to see any significant upturn in hiring until the second quarter of 2004. None of the
respondents predicted an upturn in the first quarter. Eleven percent said hiring would pick
up in the third or fourth quarter. Another 11 percent of those polled said there would be no
hiring rebound at all in 2004.
And the second labor market report wasn’t much cheerier.
Challenger, Gray & Christmas released a report showing that job creation in October was
heaviest in low-paying areas. Retail, temporary help service firms, and food and drinking
establishments were some of the top job creators. Weekly earnings in each average $366,
$318, and $225, respectively. All are 30 percent to 57 percent below the national average of
$521 per week for all industries.
And more workers are being forced into part-time jobs, while others are being forced to take
two jobs to make ends meet. The report notes that 7.5 million Americans worked two or more
jobs in October, up from 7.3 million a year ago. The number for which the primary and
secondary jobs were both part time increased six percent from 1.7 million to 1.8 million.
While the pay scale for technology jobs tends to be above the average — in many cases, way
above the average — it is varying considerably.
”I do think it’s a tale of two cities,” says Challenger. ”For people with strong skills
in specialized areas, the pay is good. But there are a lot of tech workers being hired in
small- and medium-sized businesses all over the U.S. Those are not as well paying. They’re
not poorly paying but it may seem like it after the ’90s.”
Challenger says the trouble areas for tech right now are programming jobs and other work
that doesn’t have to be done onsite. For the jobs in these areas that aren’t simply
disappearing over seas, the pay levels are being lowered because of offshoring.
”Tech is very volatile,” adds Challenger. ”It will continue to drive the economy, but the
volatility makes it a tough area to have a career. It’s a career that doesn’t promise a
steadily increasing paycheck. There will be times when technology is exploding and then
there will be times at the other end of the cycle when your skills just aren’t in demand.
”It’s a career where you should be financially astute and save your money when you’re