Automation, Offshoring and Age: Three Threats to Tech Jobs


About a month ago I shared data drawn from CDW's IT Monitor and IT Business Edge contributor Don Tennant's interview with Dice Holdings CEO Scot Melland that suggested companies might be planning to increase their technology hiring. Thirty-seven percent of big companies surveyed by CDW said they intended to add IT staff in 2010's second half, up 11 percentage points from a year earlier, and 29 percent of federal agencies plan to do so, up 9 percentage points from April. Melland told Don that if demand remained strong, there could be an IT skills shortage in the near future.


Yet for every report like those, there are others that show "tremendous insecurity." (Bart van Ark, chief economist at the Conference Board, uses this term in a New York Times story about a sluggish hiring environment in the technology sector.)


The story mentions lackluster job growth in several IT areas, including computer systems design, Internet publishing, data processing, systems analysis and computer programming. It cites automation and the availability of skilled offshore workers, two subjects I write about regularly in this blog, as factors contributing to technology's seeming inability to drive hiring in the United States.


One of the sources interviewed in the story is Rosamaria Carbonell Mann, a 49-year-old software engineer who was terminated in June when her employer, International Gaming Technology, shuttered an Oregon operation and sent the work to China. Mann, who has a master's degree in computer science, said a prior position was also sent offshore in 2001. Increasingly, companies are viewing offshore operations not just as a way to cut labor costs but also as a way to enter emerging markets that promise to be hugely profitable in the near future.


The article doesn't go into automation as much, but it'll likely have an even bigger impact on IT jobs than offshoring, as I wrote earlier this summer. I shared a quote from HP Executive Vice President Ann Livermore, who spoke to analysts after the company announced plans to cut 9,000 jobs from its enterprise service division following a project to consolidate and standardize 100 data centers around the world. Livermore said:

We think the next five to 10 years is all going to be about who can best use technology to automate the delivery of services.

Mann, the displaced 49-year-old mentioned in The New York Times, is doing what the experts advise. She is updating her programming skills. However, the article hints at another trend, companies' desire to hire younger workers. Glenn Kelman, CEO of online brokerage agency Redfin, said his company is stepping up its efforts to recruit at colleges and referred to Stanford computer science students as "the one enclave that has been completely unaffected by recession." As IT Business Edge contributor Mike Vizard wrote last week in a post titled "The Real State of IT Labor":

... And if they can get away with it, they will hire someone younger, but not because of the age of their existing workers. Younger employees tend to work for less, and as an added bonus from the employer's perspective, they tend to be a little more enthusiastic. Simply put, the employer is making a cold calculation based on cost and willingness of youth to put in longer hours versus the cost of experience and the health care costs that go along with maintaining that experience.