Traditional IT Jobs Transformed As Businesses Outsource

By Jessica Davis

While the July U.S. Department of Labor employment report was greeted with relief by many who saw the addition of 117,000 jobs as a big plus that could indicate the job market is finally moving again, employment expert David Foote, CEO of Foote Partners had another take on the news.

"The idea that the July report was a positive one – that is pure rubbish."

Why? Because a deeper look at the number shows the number of people who have given up looking for work has increased dramatically.

"…. Consider that the Department of Labor also reported that the 'discouraged’ worker count increased by a reported 118,000 from the month before. These workers are persons not currently looking for work because they believe no jobs are available for them," Foote said

Foote also drew attention to the 'marginally attached’ worker count, which expanded by 100,000 in July – workers who are no longer officially counted as part of the labor force but wanted to work and were available and have looked for a job sometime in the prior 12 months.

"That reality is that our national workforce didn’t expand last month and we did not knock a tenth of one percent from the unemployment rate by adding jobs," Foote said, in a statement. "the truth is 218,000 more people had either given up looking for work in July or couldn’t find work, but have been out there sending out resumes and trying to get interviews!"

The numbers around IT jobs paints an even more interesting picture, according to Foote – one of a transformation of traditional roles and jobs as more jobs are outsourced domestically and employers focus on business strategy rather than hiring IT.

Foote noted the continuing trend of shifting IT hiring to services industries, illustrated by the 11,500 jobs added in the Management and Technical Consulting services and Computer Systems Design and Related Services employment segments, representing 2,400 more than in June. At the same time 2,900 more jobs were lost in the Telecommunications and Data Processing, Hosting and Related services segments for a total of 32,500 jobs lost in these segments over the past 12 months. During the same period, 113,300 jobs were added in the Management and Technical Consulting services and Computer Systems Design and Related Services employment segments.

"The trend of employers no longer wishing to employ large numbers of their own full-timers in what are mostly pure technology IT jobs has been building steam over a very long period of time," Foote said. "It’s not something that just began with the popularity of cloud computing, managed services, and this new wave of domestic outsourcing, although certainly the widespread acceptance of these alternative sources for skills has been a big factor in the acceleration of what we’ve been witnessing in the federal employment reports over the past several months."

According to Foote, the net growth numbers in IT jobs illustrates a major workforce redefinition of roles and jobs.  Advancements in telephony and communications, storage, servers and networking have decreased the dependence on engineers, programmers, installers, administrators and maintenance and support staff.

At the same time, cost economies have made it cheaper to replace instead of maintain and upgrade some existing hardware.

Third, globalization and the need for "fast and flawless execution" has made it harder for IT leaders to deliver with only in-house skills. Staff augmentation is a growing trend and relies on recruiters and employee networks to "locate and then bring on board qualified IT professionals with hard-to-find combinations of skills, knowledge and experience to do a specific job.

"Having the budget to make this happen isn’t the issue here," Foote said. "It’s not having the luxury of time required to make the hire when you’re facing almost insurmountable project deadlines and little room for failure." Business leaders are also looking to focus on strategic business initiatives instead.

Foote said that the most influential driver in the transformation of the IT workforce is the rise of a secondary workforce of multiskilled IT-business specialists that outnumber those in the traditionally-skilled IT workforce by about four to one.

In addition to the 4 million IT jobs that the government says exists in the United States, there are about 20 million to 24 million more people employed throughout the enterprise in corporate functions, departments, product groups, business lines and other areas ho got their jobs because they are deeply skilled in technology and specific subject matter area but do not report into IT.

This article was originally published on 2011-08-08