Current Market for IT... Reaching Y2k/dot-com Levels?
Zone Leader John Vester examines the current market for demand in IT and asks if we are reaching or even surpassing the levels found back in the Y2k/dot-com era.
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Back in the mid to late 1990s, I recall the market for Information Technology (I mean, Information Services) resources being at unprecedented levels. The panic over the Y2k problem coupled with the growth of the dot-com era placed a high value on technology experts. For a majority of that time period, I was working in the role of a professional consultant. The days of high hourly bill rates — not to mention after-hours rates with four-hour minimums — made it very easy to crush bonus targets. In just about every segment of the market, there was money budgeted to procure technology resources who were living the dream of being in the driver's seat for their careers.
Of course, the end of the Y2k challenge, the bust of the dot-com era and the ensuing recession led to a major drop in demand for these very same resources. I recall working for a consultancy that employed just over 500 employees at the peak of the heavy technology-demand era. The initial recession brought about a 50% reduction in size, leaving only about 250 employees at our company. A second round of reductions followed, which eliminated just about every resource that was not on a billable project. To most consultancies back then, the only bench was at the unemployment office.
Demand for IT — Nearly 20 Years Later
Within the last 18 months, I've seen the number of opportunities really seem to gain momentum. In fact, the number of recruiters who are trying to connect to me on LinkedIn has quadrupled through this same time period. I began to wonder if the current market for Information Technology (IT) resources is reaching... or even surpassing... the levels we saw in the Y2k/dot-com era.
Checking in the with U.S. Bureau of Labor Statistics, I reviewed their Beyond the Numbers report from April, 2013. In that report, Lauren Csorny talked about the expected growth in the field of information technology services. The report cited an employment level of just over 600,000 jobs in 1995, which grew to nearly 1.3 million at the peak of the Y2k/dot-com era in 2001. The dot-com bust and worldwide recessions could be seen with employment reductions in 2002/2003. A second recession lines up with the reductions displayed in 2009.
Looking to the Year 2020
The same report from the U.S. Bureau of Labor Statistics projected that growth for IT resources through the year 2020 to increase 29% for computer programmers and as high as 72% for software developers focused on systems. In all, the fields of software analysts, computer programmers, software developers, and support specialists are expected to grow nearly 150% from 651 million to 974 million.
Source: U.S. Bureau of Labor Statistics
Based upon my view of the IT industry and the information I have been able to find; I believe current demand exceeds the levels that were found during the Y2k/dot-com era. The only hesitation that I have is the inability to truly compare and adjust the demand based upon the size of the industry between now and then. One metric that comes to mind are those who left the IT industry as a result of the downspin, who would have otherwise maintained their careers.
Initially, I concluded that the current demand differs from the Y2k/dot-com era because there isn't a form of panic driving the industry. However, I believe the Y2k panic was merely the first attention-grabber that installed a mindset which has since remained. In short, businesses realized they have to keep an eye on technology challenges in order to survive. One current example is the realization that we are now living in the Customer Age. Failure for companies to act accordingly could have similar results as those who failed to make corrections centered around the Y2k problem.
Have a really great day!
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