What’s an IT job? Mislabeling could be behind lower growth numbers
Foote Partners’ latest IT jobs report shows lower growth than last year, but also says that the existing job categories don’t show the full picture
The slump in U.S. IT jobs might not be a slump at all, but a case of misreporting.
Foote Partners, LLC, floats the thesis in its latest analysis of the national IT job market, which details the fifth-worst month for IT employment since August 2014.
Only 6,500 jobs were added to the IT sector in February 2016. That’s up from the 5,500 of January, but way down from 2015’s monthly average of 12,300. It’s a net gain, but it’s terribly soft compared to the previous year. The slump doesn’t appear to be a seasonal variation either, as last year at this time, the sector added 13,700 jobs.
The job segments tracked by the BLS that represent IT jobs as we know them are filed under two categories: Management and Technical Consulting Services (3,400 jobs last month), and Computer Systems Design/Related Services (4,400 jobs)
The vast majority of the jobs created in IT — 92 percent — fall into those the two categories, with Telecommunications and Data Processing and Hosting and Related services comprising the remaining 8 percent.
According to Foote, the problem with using these categories as an index for IT hiring is that they “only [represent] approximately 40 percent of the true IT labor market.”
Foote believes many of the hot job segments in IT — “cloud computing, mobile computing, big data analytics, cybersecurity, certain areas of software development and engineering, and a large portion of hybrid IT business positions” — aren’t adequately described by these two categories. As a result, such positions are “distributed throughout companies in administrative areas, functional departments, and products groups,” where Foote has observed “aggressive hiring.”
The obvious long-term solution is for the Department of Labor to revise how its job descriptions, but Foote doesn’t believe that’ll happen any time soon. “[The DoL] can’t afford to render decades of historical employment trend data obsolete,” it wrote.
The general strength of the job market shows the imprecision of the current methods for tabulating IT hiring. Unemployment fell to a low of 4.9 percent in February, and the labor force participation rate is climbing once again after free-falling for several years. If more IT jobs are being added to the economy, it’s reflected more in the overall numbers than in familiar categories.
The controversies about DoL job classifications typically focus on listing a worker as an independent contractor or a salaried employee exempt from overtime or minimum wage. There’s been relatively little discussion about the categories not reflecting the duties IT hires are performing. That’s likely to accelerate as more cutting-edge IT positions overlap multiple categories, such as engineers for blockchain technology or cognitive computing/machine learning.