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A Study Conducted by the Information Technology Association of America (ITAA) April 2001Executive SummaryThe New Economy darkened the screen of many dot.com businesses in 2000. Many once successful high tech companies found their short-term growth rates unsustainable for the long haul. Others watched yesterday's value-added product or service become today's margin busting market commodity. Despite these and other changes in the marketplace, this report finds that the demand for IT workers in the New Economy remains strong. While no lost job or business investment should be taken lightly, changes in the aggregate high tech employment marketplace should be identified, analyzed and understood. Perceptions and anecdotes should not be allowed to replace empirical data. Despite the experience of individual companies, the U.S. requirement for a steady supply of new IT workers continues. While the current economic slowdown has diminished demand, such demand for new talent persists. Indeed, this new study by the Information Technology Association of America (ITAA) finds a national IT workforce of 10.4 million. Add to this total an additional 900,000 workers that companies say they hope to hire this year. Of this total, 425,000 positions will go unfilled because of a lack of applicants with the requisite technical and non-technical skills. Last year, ITAA conducted a similar study titled, Bridging the Gap. That research projected a 12-month demand for IT workers of 1.6 million and a shortfall in filling jobs of approximately 850,000. This study explains how the employment picture has changed. In response to a variety of factors, companies appear ready to rein in their hiring plans and proceed cautiously. Not freeze hiring. This trend suggests that job candidates should likewise sharpen their professional focus in building skills and seeking work. This study is intended to help new workers do just that. When
Can You Start?
adopts the eight career clusters defined by the
Northwest Center for Emerging Technologies (NWCET) to
explore current market conditions in several key areas:
This study is made possible by the generous support of its sponsors: American Association of Community Colleges (AACC), American Management Systems (AMS), Cisco Systems, Hall Kinion, Intel, ITT Educational Services, Knowledge Workers, Microsoft, and SRA International. The Information Technology Association of America (ITAA) commissioned this project, one of the largest and most comprehensive studies of the IT workforce ever conducted. Results are based on 685 telephone interviews with hiring managers, both inside and outside the IT industry. IT firms are companies that create and sell commercial IT solutions to customers. Non-IT companies are firms that use IT solutions to assist in business operations but are not developing such solutions for commercial sales. Respondents were selected at random and the sample is projectable to represent all U.S. for-profit companies with more than 50 employees. This study is composed of interviews with 191 IT companies and 494 Non-IT companies, representing one out every 70 IT companies and one out of every 600 non-IT companies of this size in the entire country. Results have a sampling variability of +/- 3.1 percent at the 90 percent confidence level. Market Decisions Corporation of Portland, Oregon, www.mdcresearch.com, administered the survey, including questionnaire design, data collection, tabulation and analysis. ITAA's Bridging the Gap study found a job market where one in every 14 U.S. workers was involved in information technology and where one in every 12 IT jobs went unfilled for want of an appropriately skilled applicant. This current research builds on many of the themes developed in last year's report. When Can You Start? explores the hottest IT jobs using the NWCET framework and definitions. The core of this study is, once again, identifying best routes to skill attainment. Because the earlier work identified the most important technical skills to obtain positions in each of these eight Northwest Center for Emerging Technologies (NWCET) categories, this research shifts its focus slightly to explore related issues. These new topic areas include "employability" skills, career pathways, and employee retention. Among the top findings: Size of the IT workforce, the demand for qualified workers and the gap between supply and demand Over 10.4 million people in the U.S. are IT workers. This number does not include jobs in government, not-for-profit organizations or small entrepreneurial firms. This number is 4% higher than the 10 million total measured in last year's report. Information technology employment remains at the forefront of the U.S. economy, directly accounting for approximately 7 percent of the nation's workforce. The demand for IT workers is substantial, although down from last year's forecast. Employers will attempt to fill over 900,000 new IT jobs in 2001. Demand for IT workers is down 44 percent from 2000, a fact no doubt attributable to the slowdown in the high tech sector and the economy in general. The drop in demand does not reflect a fall off in IT employment, which will increase year-to-year. The talent gap for IT workers remains large, although substantially less than 2000. Hiring managers report an anticipated shortfall of 425,000 IT workers to fill their openings. Last year, ITAA found a shortage of approximately 850,000 workers-or twice the current total. Non-IT companies remain the larger employer of IT workers with 9.5 million, generate the greater demand at over 640,000 and experience the larger gap at approximately 303,000. In aggregate terms, non-IT companies employ ten times more IT workers than do IT companies. Not a surprising result as this study finds a total of 305,835 non-IT companies in the U.S. with over 50 employees, compared to 13,842 IT companies with over 50 employees. This means 22 non-IT companies exist for every one IT company in the U.S. Both non-IT and IT companies forecast an increase in demand for IT workers over the next 12 months, although less than last year. Non-IT companies expressed the need for 643,257 new IT workers-45 percent fewer than the previous year. IT companies foresee the need for 258,332 new IT workers or 41 percent fewer than last year. The gap in qualified applicants also is expected to close significantly in the next 12 months. Non-IT companies will see 302,853 IT jobs go unfilled; IT companies anticipate a gap of 122,505. These numbers are down 51 percent and 47 percent respectively from 2000. The
hottest, most in demand jobs now and in the future
The
best ways for workers to acquire needed skills
Retaining
IT Workers
Creating
Career Pathways
The IT job market in the U.S. is undergoing significant change. Demand for workers remains strong, although its size and nature has changed substantially in 12 months due to the slowdown in the economy. As it did last year, ITAA remains committed to helping stakeholders identify demand patterns; explain what it takes to perform on the job in eight major categories of IT work; and glean information from IT hiring managers themselves on best strategies for acquiring relevant skills. On the hiring side, When Can You Start? builds on previous work by adding fresh new insights into employee career development and retention strategies. ITAA anticipates that, with such information in hand, employers will be able to compare their IT hiring data with national norms and develop associated best practices. Potential employees will better understand how to direct their career planning and to evaluate career choices. Educators will receive new ideas on how to bring course offerings in line with current requirements of actual hiring managers. Media Contacts: Bob Cohen, 703-284-5301, bcohen@itaa.org Tinabeth Burton, 703-284-5305, tburton@itaa.org (c) Information Technology Association of America (ITAA), www.itaa.org.
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