The New IT Worker Shortage

By Eric Chabrow  |  Posted 01-15-2008

An all-too-common complaint from CIOs is that they can't find enough talent to staff their IT shops. No wonder.

Supply isn't keeping up with demand. Just look at the latest employment statistics the government released this month. The number of employed IT professionals is growing at a faster rate than the overall business-tech workforce. That has pushed IT unemployment to a decade low, with no signs of relief on the hiring front anytime soon.

A record 3.76 million workers in the U.S. held IT jobs last year, according to a CIO Insight analysis of Bureau of Labor Statistics data. That's a whopping 8.5 percent increase from 2006. The rapid growth in employment lowered last year's IT unemployment rate to 2.1 percent, from 2.5 percent in 2006, the lowest level recorded since the government redefined IT occupations in 2000. As a comparison, overall employment in the U.S. in 2007 stood at 4.6 percent, unchanged from 2006.

Many economists consider unemployment below 3 percent to be "full employment." An unemployment rate hovering in the 2 percent range suggests most of those out of work are between jobs and won't remain jobless long. Indeed, since the nadir of IT employment in 2002, biz-tech employment grew by 464,000, or 14.1 percent, while the IT workforce expanded by only 367,000, or 10.6 percent.

Those aren't welcoming figures for CIOs fighting among themselves for limited human resources.

Of the eight government-classified IT occupations—managers, computer scientists/systems analysts, computer programmers, computer software engineers, computer support specialists, database administrators, network/computer systems administrators and network systems/data communications analysts—only one saw a decline in the number employed last year.

That occupation,computer programmers, employed 526,000 people last year, a loss of 6.4 percent in a year. As fewer companies develop custom systems and more offshore their coding application projects, the ranks of employed programmers in the U.S. have fallen by nearly 30 percent since the beginning of the decade. Yet filling the coding jobs that remain in the U.S. continues to test IT recruiters, as reflected by the low 2.2 percent unemployment rate among programmers.

The lingering echoes from the dotcom boom and bust help explain current conditions. When the economy headed south in 2001, some 270,000 workers—9 percent of the IT workforce—abandoned the business tech field. Most who left the profession were under 40, and never returned.

At about the same time, enrollment in IT and computer science programs at American universities began to decline sharply, as the false perception spread that the Internet bust meant IT was no longer a viable career. In 2002, some 23,000 American undergraduate college students declared majors in either computer science or computer engineering, according to the Computer Research Association. That figure sunk to just over 12,000 in 2005, with a slight uptick toward 13,000 in 2006. Still, no one is certain if a reversal is under way or if the number of computer majors will ever return to the levels seen early this decade.

Exacerbating the situation is the looming retirement of a generation of baby boomers. All this is occurring when the government projects that the IT workforce will grow nearly 25 percent, more than twice as fast as the overall workforce, between 2006 and 2016.

The numbers may spell good news for IT staff, but for CIOs, the status quo of finding qualified talent will remain for years to come.