Foote Partners: IT Job Volatility Is Here to Stay

Ann All

Last month I cited a huge increase in business for oDesk, a website that specializes in helping companies hire temporary contractors. Contractors who found work through the site worked more than 1 million hours during August, an all-time high for 7-year-old oDesk. In 2009 workers on oDesk logged less than half of that, about 400,000 hours per month.


Employment numbers released last week by the Department of Labor's Bureau of Labor Statistics seem to support the idea of an increase in the use of IT contractors. According to an analysis by Foote Partners, Management and Technical Consulting Services, one of five bellwether IT segments in the bureau's data, accounted for 68 percent of new IT jobs in the last quarter. In September alone, 6,900 jobs were gained in the Management and Technical Consulting Services segment.


While federal statistics only cover a sliver of overall IT employment and thus don't offer a complete picture, there has been "healthy jobs growth" in the services sector, says David Foote, CEO and chief research officer of Foote Partners. Demand for full-time employees outside the services sector isn't showing much momentum, and Foote Partners sees "a slim to no chance for meaningful IT jobs recovery in 2010 and well into 2011," Foote says.


Employers are focused on obtaining specific IT skills and want to be able to react quickly to changing market conditions. Thus they are investigating avenues outside the traditional full-time work force, not just contractors and consultants, but also different variants of cloud computing and managed services. The word Foote Partners stresses is "volatility," noting that pay levels for IT skills have experienced dramatic shifts for the past three years. Says Foote:

This is not simply a short-term market condition. It's part of a systemic transformation of the IT service delivery models. Market volatility in skills and jobs will be the new standard in market behavior for years to come in our opinion.

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