Foote Partners Notes Economic Concerns as IT Pay Trends Slide

Susan Hall

Premium pay for both certified and non-certified skills tracked by analyst firm Foote Partners declined in the second quarter, the first quarter since September 2009 that both hit the skids. You can see a list of tracked skills here.


Said CEO and co-founder David Foote:

The difference this quarter over last is that several economic indicators are now telling us that the U.S. economic recovery has deteriorated. There is a plummeting stock market, fears of a double-dip recession, and riots in the streets of Europe. Our most recent benchmark research suggests that fear about what lies ahead was very present in the minds of private- and public-sector workforce decision-makers this past spring and early summer.

Those fears have been raising their ugly heads more than we'd like.


The analyst firm noted only one category of certifications showed gains, database skills, bolstered by three Oracle certifications. Four of eight non-certified skills showed improvement: management, methodology and process skills; messaging and communication; database skills; and SAP and enterprise business applications.


Among the certification categories taking the biggest hits: entry-level and training certifications; Web development; IT security; systems administration and engineering; applications development and programming languages; and networking certifications.


Four of eight non-certified skill categories showed declines, though smaller ones than for certifications: Web/e-commerce skills; applications development tools and platforms; systems and networking skills; and operating systems.


Foote reiterated that in many instances, IT and business skills have been combined into hybrid positions, a continuing trend he noted in his analysis of the Labor Department's July numbers. He insists there was no improvement over prior months, contrary to many reports. He also noted the continuing trend for the growth in job creation to occur with third-party service providers.


He concludes:

As an analyst and deep researcher in the IT work force space for 20 years, I can tell you that this looks like an all too familiar pattern to me. Yet somehow I can't quite see how the drivers for skills and talent acquisition in evidence today - as unique and compelling as they are - could crumble as they have in prior downturns. There is simply too much at stake now for businesses compared to the past; they simply cannot survive and compete without a highly skilled work force both internally and externally sourced.
In other words, the horse is out of the burning barn, and he's got nowhere to go but forward at a gallop.

Add Comment      Leave a comment on this blog post
Aug 16, 2011 1:49 AM Ron DeLong Ron DeLong  says:

As a business person having the advantage of working in the Supply Chain area prior to my move to IT, I can tell you that the ability of someone to explain and understand requirements is essential.  However, I am afraid that businesses in the US only understand "Cost" as the primary value driver.  They only want the lowest cost.  They are not willing to spend up-front to get the requisite solution in place.  They would rather spend less this quarter, and spend some more next quarter, and the next quarter instead of making the investment in a quality solution up-front.

This will drive pay scales down and send more US dollars "off-shore" as the lower pay scale is acceptable elsewhere.  Just as businesses are rethinking their low-cost factories in China, maybe they should rethink their low-cost IT departments as well.


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