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Workers in Driver’s Seat in 2006 Job Market

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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


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


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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