IT Services Buck Gloomy Jobs Trend

By Eric Chabrow  |  Posted 09-05-2008 Print Email

Strong payroll gains by IT services firms shows the importance of IT in many companies that need to boost business productivity with fewer employees.

While all nonfarm businesses shed 84,000 jobs last month, one sector showed strong employment growth: IT services.

Payrolls at firms offering computer systems design and related services in the United States grew by a robust 6,300 last month to a seasonally adjusted 1,425,900, according to preliminary figures released Friday by the U.S. Bureau of Labor Statistics.

Last month's payroll gain within IT services tops the average monthly increase of 5,240 the sector has experienced in the past year. IT services firms employ 62,900 more workers than they did a year earlier, a 4.6 percent increase. That contrasts with an overall payroll drop of 283,000, or 0.2 percent, among all nonfarm employers.

The fact that IT services payrolls growth buck national employment trends makes sense. Businesses are under considerable pressure to cut expenses, including labor costs. Overall unemployment last month rose to a five-year high of 6.1 percent. Yet, smartly deployed IT helps companies maintain productivity levels, even with fewer workers. So, a 4.3 percent increase last quarter in business productivity isn't surprising. Not wanting to commit budgets to retaining and/or hiring new workers, companies needing people to design and operate their IT infrastructure turn to IT services firms to get the job done.

IT services firms have consistently shown gains in employment since the last recession. Only once in the past 3-½ years has there been a monthly decline in IT services payrolls. By contrast, overall nonfarm payrolls hadn't seen a drop off from September 2003 through 2007. But in 2008, nonfarm payrolls have declined in every month.

Not every person employed by IT services firms is an IT pro, but a majority are. A 2006 government report estimates that 53 percent of IT services firms' workers hold IT jobs such as programmers; software engineers; computer, network systems and data communications analysts; database, network and systems administrators. Another 3 percent are computer and IS managers. The remaining employees--44 percent of payrolls--encompass non-IT managers and administrative and operational support personnel, including those in finance, human resources and sales.

The government, in its monthly reports in employment, does not furnish details on specific IT occupations. But in its last quarterly reports--covering the months of April, May and June--the number of employed IT professionals reached a record high of 3,956,000, according to a CIO Insight analysis.

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