IT labor shortage continues - Industry Trend or Event

Communications News, May, 2001

Lance Hamel knows firsthand about the IT labor market--which continues to be tight despite the layoffs caused by the economic slowdown and dot.com busts. Hamel, director of enterprise resource planning for Family Dollar stores, needed to recruit a team to implement enterprise software. "I decided to use a best-of-breed approach--find the best people for the job," he says. "I went to a number of companies; it was very hard to find qualified people."

Matthews, NC-based Family Dollar, a discount store chain with 3,900 stores and $3.5 billion in annual sales, may need to hire more than 15 people during a peak project, mostly technical analysts or conceptual designers; Hamel says the company is currently trying to fill two IT positions. As a South African working in the U.S. on a H1B visa, Hamel is all too familiar with the technology labor shortage.

Hamel's experience appears to be the norm, as U.S. companies continue to face a shortage in technology workers. A recent study by IDC indicates that IT labor shortages will continue both domestically and globally, regardless of the U.S. economic slowdown. IDC projects that at least 455,000 of more than 820,000 IT job openings this year will go unfilled--with the shortfall exceeding 606,000 workers in 2004. Worldwide, open IT positions will number more than two million, the study adds.

The recent layoffs at major technology firms are doing little, if anything, to alleviate the shortage. "Whom are they laying off?" asks John Martin, president of UltraShare Network, Danbury, CT, a network of IT consultants that focus on strategic sourcing of technical projects. He says the lay-offs are mainly occurring in non-IT areas, such as production or sales. "The percentages in the IT area are nothing. Most of the layoffs are in areas that were overstaffed anyway."

Martin adds that the dot.com failures have had no impact in the IT field. "Dot.coms are a microscopic percentage of nothingness," he stresses. "There aren't enough employment numbers there to affect the economy either way."

He says the demand for IT workers will remain strong, even with an economic downturn. One major reason is that companies may lean more on technology to fill the gaps left by a reduced work force.

Martin adds that the IT shortage may not totally be the result of less IT workers. "I don't think there's a shortage of technical IT people," he asserts. "The people are out there, but they need to be contacted and moved into the right direction on projects."