IT Graduates Find Difficult Job Market
The challenges facing the class of 2011 could be just as difficult as last year, but new careers can be forged by taking the right steps.
In the fall of 2006, wide-eyed, vibrant adolescents descended upon campuses across the country in hopes of gaining the skills needed to start carving themselves career paths upon graduation. At the time, Facebook founders were trying to determine how to spend the $27.5 million they had raised from venture capitalists, with the goal of reaching the 10 million mark in users later that year. Microsoft Chairman Bill Gates had announced that he would be transitioning from full-time work at the company to full-time work at the Bill and Melinda Gates Foundation. Jack Dorsey, Isaac "Biz" Stone and Evan Williams were working at podcasting company Odeo and kicking around ideas for a new company, which eventually became known as Twitter.
Dramatic change has long been a mantra in the IT industry, but it's unlikely that anyone foresaw the changes that last year's graduates would face as they entered their senior year. The financial meltdown in the fall of 2008 pushed the U.S. economy into its deepest recession since the Great Depression. The stock market fell by 50 percent, and housing prices dropped by 20 percent. The net worth of American households declined from $63.7 trillion in January 2008 to $51.5 trillion in January 2009, a decrease of $11.2 trillion, or 18 percent.
A ripple effect occurred: Companies tightened their purse strings, new projects were put on hold, employees were let go and turbulence ensued. "There's no doubt that 2009 was a difficult, difficult year for the IT industry," says John Challenger, CEO at Challenger, Gray & Christmas, an outplacement consulting firm. "Many IT graduates simply could not find work."
As the 2010 graduates polished their resumes, they encountered a job market in flux. The financial maelstrom had ebbed, and the quick, dramatic cuts companies made to IT budgets in 2009 had subsided. However, residue from the downturn was still evident. Salaries remained at best flat in 2010, and job creation remains a volatile issue. Allison Nawoj, corporate communications manager at CareerBuilder, says that companies seem positive about the future. Still, they were and are a bit skittish about adding new employees, which makes it especially difficult for recent graduates to find work. Though better than 2009, 2010 was not as welcoming a job market as IT graduates have found in the past. While there's some optimism for 2011, unemployment remains high and tension persists regarding the outlook for jobs. The IT class of 2011 will likely face many of the challenges that the class of 2010 encountered.
So how bad has the economic downturn been for the IT industry? Market research firm Gartner Inc. found that 2009 was the worst year ever -- even worse than the dotcom bust. In 2009 IT spending declined 5.2 percent worldwide. According to the U.S. Department of Labor, IT employment peaked in the fall of 2008, when more than 4 million individuals held jobs in IT departments.
After the financial meltdown, those numbers dropped by more than 10 percent as companies quickly let employees go and banished new projects to the backburner. "In June 2009, our job listings dropped by 45 percent," notes Tom Silver, senior vice president, North America, for Dice.com, a Web site serving technology and engineering professionals and companies searching for such individuals. The end result was that fewer openings were available to students searching for entry-level work in the spring and summer of 2009. In 2009, 43 percent of employers planned to hire recent college graduates, down from 56 percent in 2008 and 79 percent in 2007, according to CareerBuilder's Annual College Job Forecast.
For the industry overall, research firm Janco Associates Inc. found that the IT employment picture in 2010 wasn't much better. In October, Janco found in data from the Bureau of Labor Statistics a 0.66 percent drop in IT employment compared to the year before. In a statement, the company offered ominous news: "In subsequent follow-up interviews with CIOs and CEOs at a number of large firms, the consensus is that the recession is not over and that budgets for 2011, which had assumed a marked improvement in the economic climate, will need to be revisited and possibly reduced."
Those who were fortunate enough to be hired in the last couple of years found a dour workplace. Dice.com reported a 1 percent average pay increase for IT professionals (the average salary being $78,845) in 2009. Janco's 2010 data was somewhat more encouraging, but not much: "Overall compensation for all IT professionals has shown a slight increase from $77,690 to $78,210; however, the study shows that there was a 13 percent decrease in the number of employees receiving personal performance bonuses and a 7 percent decrease in those receiving enterprise-based performance bonuses," the firm said in a statement. Grumbling became quite common in many company datacenters: Dice.com found that close to half (47 percent) of all IT employees said their employers were doing nothing to keep them motivated.
Bright Spots and Opportunities
Yet even during the downturn, there were a few silver linings among the dark clouds. While the national unemployment rate was in the 10 percent range, it was about half that in the IT space.
Dave Willmer, the executive director of Robert Half Technology, an IT staffing provider, noted that even during the worst of times, unemployment was less than 2 percent for database administrators and business intelligence analysts. In addition, demand for individuals familiar with mobile and social networking technology continued to hum along. Hiring growth was also seen in vertical market segments, such as health care and the federal government. In fact, Dice.com reported that technology pros in the government and defense sector enjoyed a 4.4 percent average salary increase in 2009 -- nearly equal to the previous year's 4.6 percent salary surge. In 2009, Washington, D.C., area IT workers' salaries averaged $89,014, making it one of the nation's most-attractive cities for IT pros. These few bright spots stood out from the overall gloomy picture.
Uptick in Hiring
Other positive indicators emerged more clearly later in 2009 and early in 2010.
"At the end of 2009 and in early 2010, the economy saw increases in the hiring of part-time workers and manufacturing employees," says Mark Roberts, CEO at TechServe Alliance, an IT services industry group that analyzes unemployment data. "Traditionally, such changes are precursors to an overall increase in employment numbers." In early 2010, companies seemed to be loosening up the purse strings somewhat. CareerBuilder found that 23 percent of employers increased their full-time permanent staff in the first quarter of 2010. This number is up from 13 percent in the same period in 2009 and up from 20 percent from the fourth quarter of 2009. As a result, IT employment grew by 11,000 jobs in January of last year and 14,000 jobs in February, which marked the strongest month-to-month gains since 2008, according to TechServe Alliance. An uptick was also evident in college hiring. CareerBuilder found that one in five employers (21 percent) who were hiring recent college graduates said they'd hire more than they did last year, and 16 percent also reported that they'd offer higher starting salaries than they did in 2009.
Still, the job market last year fell short of utopia for the class of 2010. Rather than a smooth transition, the recovery has been a bit bumpy. The job increases in January and February of last year, for instance, were followed by a slight dip in March. Competition for new positions continues to be fierce. Young graduates "could end up vying with [other recent] graduates, who still may not have found work," notes Challenger of Challenger, Gray & Christmas. The newbies could also find themselves battling with other young people who received their diplomas within the last five years, had jobs and found themselves back in the labor pool once the recession hit. The outlook is very much the same, if not worse, for inexperienced graduates who are preparing to walk the stage this spring.
As graduates hone their job search strategies, they need to determine which positions have the best short-term and long-term potential -- and so do current IT workers. "Social media skills represent an area of high growth," notes CareerBuilder's Nawoj. The company found that nearly one in 10 employers (about 9 percent) planned to hire a new employee to focus on social media as of the second quarter of 2010. An additional 13 percent expected to add social media management to current employees' responsibilities. Other skills gaining interest include wireless and mobility; for example, many companies are looking for programmers who can develop applications for the Apple iPhone. Cloud computing and virtualization are two other areas where corporations are trying to gain additional expertise.
Lutz Ziob, general manager of Microsoft Learning, encourages those interested in pursuing IT jobs to hone their skills in networking, virtualization and anything related to the cloud. Aspiring IT professionals should also look at developing programming skills. Security is another hotspot. Also, there's a growing need for those with both programming and design skills. "There's a growing demand for people who have a graphical user experience kind of thinking to be able to work with IT pros and developers, and we're trying to facilitate that," Ziob says.
Where to Go
If entry-level IT workers possessed such skills, where might they find employment? Dice.com says that the top areas for IT hiring are Philadelphia, New York-New Jersey, Washington, D.C.-Baltimore, Silicon Valley and Los Angeles (see "Top 10 Cities for IT Professionals"). In fact, in 2010, job postings were up 40 percent or more from 2009 in Silicon Valley and New York, according to Dice.com. CareerBuilder teamed with Apartment.com and found that the top five cities for recent graduates are Indianapolis, Philadelphia, Baltimore, Cincinnati and Cleveland. (The company's criteria included the highest concentrations of young adults ages 20 to 24, inventory of jobs requiring less than one year of experience, and the average cost of rent for a one-bedroom apartment.)
What can a recent or expectant graduate anticipate in terms of pay? Salaries for entry-level programming positions average $43,000, according to Dice.com, but there is some variance in the numbers. A degree in computer science from a prestigious university boosts a person's salary substantially. Carnegie Mellon University (CMU) has about 140 graduates from its IT program, and their average starting salary is $76,000. "Companies such as Apple, Google and Microsoft, along with dozens of others, hire our graduates," says Mark Stehlik, assistant dean for undergraduate education at CMU.
Once they gain entry into the IT market, individuals may want to develop expertise that will earn them more money. Topping Dice.com's salary list are Advanced Business Application Programming (ABAP) at $115,916, followed by service-oriented architecture (SOA) at $107,827 and extract, transform and load (ETL) at $105,844. Janco notes significant job growth in system design and IT services, as well. Certification programs also remain attractive to employers. In March 2010, Dice.com listed 10 positions in demand, and Microsoft certifications were part of three of those: Microsoft Certified Systems Engineer was second; Microsoft Certified Professional was sixth and Microsoft Certified Systems Administrator was eighth.
How graduates go about the job search has been changing because of the emergence of online job sites, such as CareerBuilder, Dice.com and Monster.com, which have enabled companies to broaden the reach of their searches. It's now common for a company to have thousands of respondents to a job posting. Consequently, it's important for an applicant to develop a résumé that will catch a potential suitor's eye. The online job sites offer various résumé polishing tips and services that can help individuals present themselves in the best light. Another hurdle newbies must clear is their lack of experience. Graduates need to be creative and show how what they've done in school or in a particular class corresponds to skill sets that companies desire.
Social networking sites, such as Focus.com and LinkedIn, can help individuals broaden their bases of contacts. "Landing a job is usually as much about personal relationships as it is a person's skill set," Challenger says. Social networking sites could help someone find a connection that he may not know about and provide that person with a needed introduction.
Job seekers need to be creative in the current employment climate. The soon-to-be graduates of 2011 are entering a market that looks better than it did back in 2009, but one that's likely more difficult than they envisioned when they decided to major in computer science.
"To get into the IT space, graduates will need to be flexible," concludes Robert Half Technology's Willmer. "They may have a dream job but may have to sacrifice items, such as job title, location or salary, in order to get their foot in the door."