IT hiring will pick up again by year’s end, recruiters say

Information technology (IT) recruiters in Canada and the U.S. are cautiously optimistic that the end of the market decline is in sight, and by year end firms are going to start hiring again.

There are definite signs the employment situation for Canadian IT professionals will improve, according to Dave O’Brien, eastern Canada vice-president, Eagle Professional Resources Inc.

Eagle is an Ottawa-based technology staffing firm with offices in 10 cities across Canada.

Another Canadian expert echoes this view.

I would classify the mood in Canada as “cautiously optimistic,” said Rod Miller, regional vice-president at Robert Half Technology, an IT staffing services firm. “The numbers we’re beginning to see in our labour reports and statistics, manifest this attitude [the sense that] we’ve hit the bottom and we’re beginning to recover,” Miller said.

Recruiters in the U.S. share this optimism … as well as the caution, which seems more pronounced south of the border.

American firms “are still cutting and I think there will be some more cuts,” said Steve Watson, international chairman and managing director of recruiting firm Stanton Chase International in Dallas.

But Watson’s also confident that IT hiring by U.S. organizations will resume by the end of 2009 due to a pent-up demand for corporate and government IT projects.

Similar forces are likely to boost hiring in Canada as well, O’Brien suggests. “There’s also a lot of consolidation work going on, with businesses integrating systems and departments, all of which is also going to require technology resources and skilled IT people to execute.”

He said in government jurisdictions, the imminent retirement of a large number of IT knowledge workers will also have a big impact on the jobs market. “These folk have defined benefit pensions and indexed pensions, so when they reach the end of their career they will retire … they won’t stick on.”

The U.S. IT jobs market seems to have been much harder hit by the financial downturn than Canada.

The number of IT workers in the U.S. has declined steadily since December, a trend that wasn’t helped by Hewlett Packard Co.’s announcement last week that it is cutting 6,000 employees.

The number of U.S. technology workers peaked last November at 4.058 million, according to the TechServe Alliance (formerly the National Association of Computer Consultants), which analyzes federal labour data on IT-related occupations.

By the end of April, the number had declined to 3.87 million, the alliance said.

The sense of despondency among IT professionals has also been more marked in the U.S.

Technisource’s IT Employee Confidence Index shows that American IT professionals’ confidence in the economy, the job market and their employers’ futures hit a new low during the first quarter of 2009.

Just six per cent of tech workers think the economy is improving, while two-thirds (66 per cent) said it continues to deteriorate.

U.S.-based IT workers are even more pessimistic about the job market.

Nearly 80 per cent believe fewer IT jobs are available, and for good reason: Job search site reported in February that demand for IT jobs was starting to decline.

Only seven per cent of American IT professionals see more job opportunities. Despite their bleak outlook on the job market, though, 38 per cent of IT professionals plan to start a job search, and 37 per cent are confident they’ll find one.

“I think we are definitely going to see a solid year of decline,” said Mark Roberts, CEO of TechServe.

He said when companies start hiring again, they will likely take on contract labour before permanent staff “because people are going to be cautious coming out of a painful recession.”

California, Florida and the city of Detroit are among the hardest hit regions for IT employment, though demand continues to be strong in isolated areas, such as Nashville, which houses a number of health care firms that are hiring, said Sid Mitchener, a partner in the Raleigh, N.C. offices of recruiting firm Vaco LLC.

However, he did note that the salaries of workers taking on new IT jobs are generally 10 per cent to 20 per cent below what the same positions received last year. Salaries of IT executives are similarly losing ground.

Tuck Rickards, leader of the technology sector at New York-based Russell Reynolds Associates Inc., said recruitment efforts for IT workers “feels more active to us” since the end of March.

He cited several firms seeking CIOs with the ability to restructure an organization improve its efficiency and generate revenue producing ideas. “There is a fair amount of turnover in the CIO function,” he said.

Genworth Financial Inc. is continuing to recruit top IT talent even after cutting 1,000 jobs in multiple departments, including IT, in December.

Michael McGarry, CTO of the Richmond Va.-based insurance firm, said he continues to compete for top IT talent to fill jobs lost through attrition, and to fill its executive leadership program for college graduates. “The competition for top talent feels [at least as] as fierce, as ever. It does feel like business as usual,” he said.

McGarry said Genworth Financial Inc. is looking for people who have strong technical skills and awareness of all areas of IT, but with mastery of at least one technical area.

They are also seeking people with business leadership skills, although the need for that may vary by the nature of the work.

The competition for people with networking and security skills, in particular, seems “more intense,” and with a recovery the competition for such jobs will only increase, said McGarry.

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