IT jobs outlook for 2009: The good and the bad

A depressing string of layoff announcements across the corporate world has gotten 2009 off to an inauspicious start. So what do the trends mean for IT employment in 2009? Here’s a sober look at both the good signs and the bad.

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January has been brutal for U.S. workers. Company after company has announced layoffs, salary freezes, unpaid furloughs, hiring freezes, plant closings, and budget cuts. With all the bad news flooding the wire, it’s easy to forget that more than nine out of ten Americans in the workforce still have jobs despite the dramatic downturn.

Those who work in the IT profession are certainly not immune to the pain that has been afflicting the U.S. job market, but they do have a few factors going for them that could help many of them weather the storm better than some of their co-workers in other fields. Let’s take a look at several trends - the good and the bad - currently affecting the IT job market and then read the tea leaves to decipher what we might expect from the IT jobs outlook in 2009.

IT pro salaries went up in 2008

As part of its annual salary survey, the tech job portal Dice.com surveyed 19,444 IT professionals between August and November 2008. Dice reported that the average salary for working in IT is now $78,035, a 4.6% increase over 2007 ($74,570).

Other key findings from the survey include:

• Job roles with the largest raises: Security analyst (8.4%), Software engineer (7%), Application developer (6.6%), and Network engineer (6%)
• Outside of managers and executives, the highest paying job role in IT was Project manager, making an average salary of $103,424.
• Several large metro areas saw significant jumps in average pay: Detroit (9%), Phoenix (8.5%), San Diego (8.3%), and Miami (7.7%)
• The metropolitan areas that saw the largest increases in IT worker salaries were all mid-sized cities: Charlotte (14.7%), St. Louis (12.5%), Pittsburgh (11.9%), Portland, OR (9.3%), and Baltimore (9.2%)
• As a whole, female IT pros make 12% less than male IT pros, although this number flattens out when comparing women and men with comparable job titles, years of experience, and educational levels

“That average tech salaries are rising even as the economy falls reveals how much has changed since the dot-com days,” said Tom Silver, Chief Marketing Officer at Dice. “Today many technology professionals are seen as core assets where they work. As they enhance their skills, they’ll need to align those efforts with the market’s shifting demands. However, over the long-term, updating and broadening one’s skill set is the key to continued salary gains.”

IT pros are worried about 2009

Despite the salary uptick in 2008, the respondents to the Dice survey also expressed some major fear and uncertainty about 2009.When asked about their biggest career concerns for 2009, the IT pros responded as follows:

• Keeping skills up to date (22%)
• Position elimination (20%)
• Lower salary increases (14%)
• Canceled projects / fewer projects (12%)
• Increased workload, due to staff cuts (10%)

The survey also stated, “Dice reports a 67 percent increase in the number of new resumes posted to its site in the fourth quarter (year over year). Given that the majority of technology professionals who utilize Dice are currently employed, such ‘passive job hunting’ indicates greater anxiety about the job market.”

Companies with cash are still laying off workers

Tom Foremski over at ZDNet also spotted a disturbing trend. He did an analysis of several of the big tech companies that have announced layoffs and found that many of them have very strong balance sheets, with enough cash to weather the downturn without resorting to layoffs. The fact that they are still doing layoffs is a bad sign. It says that they do not have confidence that the economy will turn around anytime soon, otherwise they would simply use their ample cash to ride it out in the short term and come out stronger on the other side.

Here are the big tech companies that Foremski pinpointed:

• Microsoft: $19.71 billion ($1.98 billion debt)
• Apple: $24.49 billion (0 debt)
• Intel: $11.84 billion ($1.99 billion debt)
• Cisco Systems: $26.7 billion ($6.87 billion debt)
• Adobe: $2.02 billion ($350 million debt)
• Google: $14.41 billion (0 debt)
• Yahoo: $3.2 billion ($63 million debt)

As Tom put it, “It’s tough to be laid off, [but] it must be tougher still to be laid off from a company with billions in cash - especially since you helped build that cash reserve.”

Who’s hiring?

Rafe Needleman over at Webware has a spreadsheet that tracks the tech companies that are still hiring despite the current economic malaise. Here is list of the some of the most recognizable companies on the spreadsheet and in parentheses you can see the number of open positions they have at the time this article is being written.

• Intel (1000+)
• Salesforce.com (400+)
• Walmart IT (300+)
• Apple (189)
• Siemens IT (100+)
• Garmin (100+)
• Facebook (100)
• Samsung (50+)
• Research in Motion (50)
• Yale University IT (45)
• GoDaddy (45)
• Omniture (35)
• Mozilla (30)
• Barracuda Networks (28)
• Cisco (25)

At the time this article was written, Dice.com listed 56,830 open jobs in the IT field.

The bottom line

The biggest factor that IT professionals have going for them during this economic downturn is that many organizations are looking to IT to help the company streamline, automate, conserve energy, cut costs, reduce headcount, and generally do-more-with-less. In some cases, that will mean spending more money in IT in order to reduce costs in other departments.

On the other hand, one of the biggest targets for cuts in many organizations is central services, which is being whacked in order to reduce overhead. Highly-centralized IT departments will be a huge target in these types of organizations because IT professionals are typically well-paid on the salary scale and a centralized IT budget is typically a big number, which puts a huge bulls-eye on it.

Ultimately, some centralized IT departments that have not articulated their value well enough will be hit hard by this current economic downturn. However, a lot of others will seize on this as a great opportunity to demonstrate the value of IT at a time when the chips are down and a lot is at stake.