The Coming Job Boom; Forget those grim unemployment numbers.

Business 2.0 ^ | September 2003 Issue | Paul Kaihla

[BushCountry]

The Coming Job Boom

Forget those grim unemployment numbers. Demographic forces are about to put a squeeze on the labor supply that will make it feel like 1999 all over again.

By Paul Kaihla, September 2003 Issue

Judy Reed is a buyer in a buyer's market, and frankly, that has its advantages. The vice president for human resources at Stratus Technologies, a Maynard, Mass., maker of high-reliability servers, Reed never lacks for attention at parties and dinners in this employment-starved economy. When she does post a job, she gets four times the volume of responses she got three years ago, and some job seekers even follow up with Christmas cards. If she wanted to, she could fill every opening at a salary 15 percent below the going rate -- as, in fact, many of her competitors do.

But that's one advantage Reed won't take. She recently hired an engineer with more than 10 years' experience for nearly six figures -- the same wage she paid at the height of the bubble. Reed isn't just being kind. She asserts that any other course of action is asking for trouble down the road. "The buyer's market we're in now is temporary," she warns. "Maybe it'll last another year or two." And then? "Companies that haven't taken care to build worker loyalty," she says, "will find themselves in the same predicament as in 1999 and 2000."

At this particular moment in economic history, that is quite a statement. Two million workers have been downsized or displaced since the recession of 2001. At 6.2 percent, the national unemployment rate is the highest it's been in nine years, and the number of new jobless claims has sat above 400,000 for 20 weeks. To base hiring policy today on the prospect of a return to the tight labor market of 1999 seems not just counterintuitive -- it defies the evidence of one's own eyes.

But Reed isn't alone. Executives at Cigna (CI), Intel (INTC), SAS, Sprint (PCS), Whirlpool (WHR), WPP (WPPGY), and Adecco (the world's largest placement firm) have told Business 2.0 that they, too, worry that the supply of labor is about to fall seriously short of demand. Former treasury secretary and current Harvard University president Larry Summers regards a skilled labor shortage as all but inevitable. Economists like former Deputy Secretary of Labor Edward Montgomery and Sigurd Nilsen, the director of education, workforce, and income security in the General Accounting Office, have issued warnings to the same effect. And in April the country's largest and most influential industrial trade group, the National Association of Manufacturers (NAM), added its voice to the chorus. The association released a white paper based on research by labor economist Anthony Carnevale, former chairman of President Clinton's National Commission for Employment Policy, that forecast a "skilled worker gap" that will start to appear the year after next and grow to 5.3 million workers by 2010 and 14 million 10 years later. (Including unskilled workers, the gaps will be 7 million in 2010 and 21 million in 2020.) "By comparison, what employers experienced in 1999 and 2000 was a minor irritation," Carnevale says. "The shortage won't just be about having to cut an extra shift. It will be about not being able to fill the first and second shift too." This will occur, he adds, without any heroic growth rates or bubblelike economic anomalies; all it will take is a return to the economy's long-term growth rate of 3 to 3.5 percent a year.

continued...

[BushCountry]

FYI -- Doom & Gloomers

[Texas_Dawg]

Ping

We're all doomed.

[GailA]

The problem is high tech businesses still want to pay third world country wages to American workers. A person with 10, 20, 30 years in their field are highly qualified (for the most part), and deserve top pay, if they are good producers of their product. There is an adage that a worker is worthy of his hire.

[BOBTHENAILER]

You'll love this one.

[Always Right]

FYI -- Doom & Gloomers

Don't worry, I am sure they will find another article to post about the coming great depression that will make them feel better.

[Wolfie]

Right, so lets keep those H1-B numbers up, and full speed ahead on the outsourcing. And if the coming boom doesn't materialize, better luck next time.

[Mr. Bird]

The problem is high tech businesses still want to pay third world country wages to American workers. A person with 10, 20, 30 years in their field are highly qualified (for the most part), and deserve top pay, if they are good producers of their product. There is an adage that a worker is worthy of his hire.

Pegging every employment outlook to high tech seems to be a common lament around here, but it's just not as huge as many make it out to be. Bottom line is that IT accounts for 2% of the workforce, and the skills are being commodified. I can put an ad out there for a LAN adminstrator and get 400 qualified resumes in 2 days (this is a true story).

Why would I pay someone the $90k they made in that job 5 years ago because I had to, when I can save my business money by paying someone less? Too many people chased the promise of big money indefinitely and now are finding out that the world doesn't work that way.

In some respects (and I do not mean this in a derogatory way), many IT professions are like ditch diggers now; yes, we need them, but they're just not worth a whole lot of money. Example: everyone on this forum more than likely has the computer skills and knowledge that were the exclusive domain of a very few people just 20 years ago.

[per loin]

Are these the same execs who were extolling the magic economy of the dot-coms a couple of years ago?

[I_dmc]

ok, anyone know what skills these folks expect to be in short supply?

[Lazamataz]

In some respects (and I do not mean this in a derogatory way), many IT professions are like ditch diggers now; yes, we need them, but they're just not worth a whole lot of money.

You are in a buyers market right now.

Enjoy the ride. It will end.

Example: everyone on this forum more than likely has the computer skills and knowledge that were the exclusive domain of a very few people just 20 years ago.

I'm pretty darned sure that everyone on this forum doesn't have the ability to write full applications in C#.NET with a distributed ADO object model that accesses datasets via MSSQL to post on the internet in an ASP.NET front end, including full life-cycle elements such as UML design, func and tech specs, and well-written user manuals.

[Mr. Bird]

As someone who is already seeing it, most of the Allied Health professions (techs, therapists, etc.) are projecting employment numbers leaving vacancy rates at about 15-20%. Many people point out that medical imaging services are being outsourced overseas, but they fail to clarify that those are physician positions. Someone still needs to take the picture.

For the more technically inclined, health care still presents some opportunity. In the imaging field, PACS systems (which archive x-rays, MRI's, etc. for easy remote access) are quickly taking hold in major medical centers and will spread to smaller clinics.

In finance, accounting and analysis are still crucial roles across industry.

And with the aging population, I imagine funeral home director might be a good bet....

[new cruelty]

Economists Expect Fastest Second Half Growth Since 1999

[Coop]

At 6.2 percent, the national unemployment rate is the highest it's been in nine years, and the number of new jobless claims has sat above 400,000 for 20 weeks.

Huh? First, the most recent rate is 6.1%. (I can understand that given publication deadlines.) Second, the highest rate was 6.4% from the previous month. I hope this isn't indicative of the author's extensive research.

[Mr. Bird]

I'm pretty darned sure that everyone on this forum doesn't have the ability to write full applications in C#.NET with a distributed ADO object model that accesses datasets via MSSQL to post on the internet in an ASP.NET front end, including full life-cycle elements such as UML design, func and tech specs, and well-written user manuals.

Come on, Laz, that's twisting my statement around. What I was saying is that the skills that I do have (and those of others here) were only held by a small number of people, back in the day. You techies created products and systems that made the entry level IT jobs less important. Today, companies have secretaries that can run data analyses that were the purview of a select few in the 80's. I'm not saying we can do everything techies did back then, I'm saying what we can do is a heck of a lot more than we could back then.

[new cruelty]

A message from FReeper tyen:

Want to gross $150K or more per annum in Subchapter S income?

I'm turning away work in my part of the IT industry, and would like nothing better than to help a fellow conservative IT professional. This is not a pitch for subcontracting services or a body shop. In fact, if you're interested, you will be on your own with your own consulting shop. I'll give you the information you need to start, and introduce you to some folks for sales leads, but you're on your own after that. Rates start at $50/hr for beginners and go up to $200/hr for experts.

Here are the requirements. You have to be willing to travel every week: fly out on Sunday evening and fly back on Thursday evening, working 10 hours each day is the usual schedule. You must be able to track your time throughout the day, and be able to report to your client how you spent your time and who you spent it with down to the minute. You must know how to script in SQL, Perl and Bourne shell. You must know regular expressions, including backreferencing. You must know how to use awk and sed. You must know data structures: if asked to describe what a linked list is, or how to traverse an array of linked lists, no blank stares. You must be able to admin both Unix and Windows systems. You must be able to perform a basic installation and configuration of a database server (Oracle and Microsoft SQL Server). You must be able to perform basic network admin tasks like setting up firewalls, VPNs, and routing tables, and troubleshooting network connectivity problems using a variety of tools including a sniffer like snoop on Solaris or tcpdump on AIX or ethereal on Linux. You must be very proficient in Microsoft Excel and Project; not just be able to use them like most people, but construct complex models. You must be able to write and present very abstract ideas to senior management in a concise and concrete manner. You must have a reputation for meticulously documenting your work. You must be able to lead a team of client staff, including navigating very difficult political waters. You must have your own test lab of servers: at a minimum, one Windows server, one Linux server, and one commercial Unix server (in order of preference: Solaris, AIX, or HP-UX). You will need to devote about 1-6 months studying the vendor software you will consult upon; the manuals can all be downloaded, and I can supply you with development copies of the software. You must be able to help client management with budgets, which means knowing basic financial accounting, or at least know how to treat fixed assets versus business expenses; being able to talk about internal rate of return would be very helpful.

Knowledge of CORBA is very helpful. Exposure to Prolog is helpful. Knowing how to program in C, C++ or Java is helpful, but not necessary.

If you're interested, Freepmail me. The first step is to download and install the vendor software on one of your test lab servers, including downloading the manuals.

[banjo joe]

Thank-you. The ability to insert a few HTML tags, or put up a web page means nothing. Go ahead and run a business with those skills... see what happens.

[Lazamataz]

Come on, Laz, that's twisting my statement around.

Okay. I honestly didn't mean to do that. I'm not that kind of poster.

What I was saying is that the skills that I do have (and those of others here) were only held by a small number of people, back in the day. You techies created products and systems that made the entry level IT jobs less important.

I can agree with that. Absolutely. Jobs that were in-place for people with minimal IT skills are now mere job-requirements of other employment slots. Being a nurse, for example, now requires the ability to interface with the floor computer.

Today, companies have secretaries that can run data analyses that were the purview of a select few in the 80's.

Yes, and it is this that has increased American productivity.

I'm not saying we can do everything techies did back then, I'm saying what we can do is a heck of a lot more than we could back then.

Agreed, but I'm reminding you that I'm EXPENSIVE.

And WORTH IT.

;^)

[GailA]

There are other high tech professions besides IT. Electronic Techs who do the repair work for one. Hubby's 2 way radio company sold out to a cell company, the cell company, the cell company only wanted the frequencies. His skills are up to date as he attends all the schools he can get in his field, but he is considered analog, while cell is considered digital. We've sent out hundreds of resumes to positions that offered much less money than he was making, and still he only had 5 interviews. He finally found a job with the PD here locally working on their radios, just this week. He has 30 years as a field tech, the last 3 as a FTR trouble shooter. Saw some salaries listed as low as $15,000 for a position that normally would pay a guy with 20 years experience $45,000.

[Lazamataz]

I got your email btw. I appreciate your forwarding it to me. But as you already know, I'm only interested in a Object Oriented Programming job in C#.NET with a MS SQL back end in the Investment or Health Information Services arena located in or around the perimeter of Atlanta paying at least 75k an annum with full benefits. (Disclaimer: The excessive specificity of this statement is intended to be a joke.)

;^)