Foote Partners Says September IT Hiring Stall Just Temporary

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    Amid all the controversy behind the unemployment numbers released Friday, research firm Foote Partners has added some commentary after input from employers about the sudden and dramatic dip in IT job creation in September.

    The report showed a loss of 1,800 jobs in Management and Technical Consulting Services following 17 consecutive months of job growth. Continuing a streak of 24 consecutive months, Computer Systems Design/Related Services added 2,900 jobs. Yet telecommunications continued its decline, losing 400 positions and Data Processing, Hosting and Related Services segments lost a total of 2,400 jobs in September, its largest decline in 40 months.

    After hearing back from some IT employers about what’s going on, CEO David Foote added:

    As for this latest blip, I see a few factors at play,” said Foote. “First, the election year news cycles have been injecting a lot of nervousness in the markets with almost daily hyping of the ‘fiscal cliff’ in January which refers to the ending of the Bush era tax cuts and resumption of higher payroll  tax rates at the beginning of 2013. This drumbeat has been pretty aggressive and discussed almost daily in the news.

    Second, nearly three quarters of U.S. businesses are on a calendar fiscal year and they just entered into their 4th quarter starting Oct. 1. It’s perfectly normal for them to step back in September and recheck their budgets and hiring plans for the rest of the year and the beginning of the next fiscal year. This year we noted two important differences in our interviews with CIOs and others responsible for IT hiring: employers were feeling the nervousness just described and consequently acting more deliberately, including placing temporarily freezes on IT job requisitions in September. We are now hearing that they have just lifted those freezes and they’re back to active searches on all requisitions.

    So it appears this September reversal may have been a result of temporary suspension of hiring during the customary ‘step back and recheck our thinking’ phase.

    He added that Foote Partners expects a return to robust IT hiring that will show up in the October and November reports. Among his analysis, he said:

    The fact is that companies are actively searching for talent and hiring for the future, though with considerable selectivity. They are making investments in new people, not simply filling gaps at the project level. They’re building for the future, putting a premium on versatility and multi-dimensionally skilled individuals who can grow and develop with the company.

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