Unemployment in the tech industry is less than half of that in the general population, Dice says
By Grant Gross, IDG News Service | IT Management, ITWorld
January 14, 2013, 2:03 PM — The unemployment rate among U.S. IT workers stood at 3.3 percent in the fourth quarter of 2012, significantly lower than the overall unemployment rate of 7.8 percent, according to tech job board Dice.
The technology consulting industry in the U.S. added more than 21,000 jobs in the fourth quarter. Electronics manufacturing lost more than 10,000 jobs in the U.S. during the entire year and data processing and hosting lost 1,600 jobs, Dice said in a jobs report released Monday.
Tech unemployment also stood at 3.3 percent during the third quarter of 2012, but was 4.4 percent during the first quarter, Dice said.
"The tech segment of the labor market is doing quite well on a number of fronts," said Scot Melland, CEO of Dice Holdings. "There's good job growth in this economy. It has low unemployment, meaning there's very few people on the beach."
Many companies are still nervous about hiring full-time IT workers, and are turning to consultants to upgrade their IT infrastructure and to fill other IT needs, Melland said. U.S. companies are looking to consulting firms to give them flexibility to bring in IT skills for specific tasks, "without having that long-term commitment," he said.
In addition, companies are turning to consultants because tech workers have been hesitant to switch jobs, he said.
Despite the relatively low unemployment in the tech industry, turnover at tech companies is low, Melland said. He would expect annual turnover rates in the 15 percent to 20 percent range, but during a November Dice survey of more than 1,000 hiring managers and recruiters, nearly 41 percent of respondents said turnover at their companies was less than 5 percent, and another 18 percent said it was between 5 percent and 9 percent.
Nearly 14 percent of the respondents of the November survey reported annual turnover rates of 10 percent to 14 percent, and only 7.6 percent of the respondents reported turnover of 20 percent or more.
"It's our belief that turnover is still artificially low because people in general are still nervous about the economy," Melland said. "You don't have that natural flow."
In some cases, tech workers may be staying in their current jobs because their houses are worth less than they owe for them and in other cases tech workers may be nervous about leaving good jobs for new companies, Melland said. Tech workers "don't want to be the last person in the door at the new place," he added.
During the first two months of the fourth quarter, an average of 388,000 workers in professional and business services quit their positions each month, according to the U.S. Bureau of Labor Statistics. That's up about 10,000 per month from the third quarter, but below the 10-year average of 405,000 voluntary resignations per month, Dice noted.
Job growth in the tech industry during the past three-and-a-half years has outpaced growth in the industry after recessions in 1991 and 2001, Dice said.
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Melland expects to see tech salaries increase in 2012 when Dice releases its salary survey in the coming weeks. Dice found a salary increase of more than 2 percent in 2011, boosting their average annual wage to US$81,327 from $79,384 in 2010. Wages were flat in the previous two years.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com
Tech unemployment also stood at 3.3 percent during the third quarter of 2012, but was 4.4 percent during the first quarter, Dice said.
"The tech segment of the labor market is doing quite well on a number of fronts," said Scot Melland, CEO of Dice Holdings. "There's good job growth in this economy. It has low unemployment, meaning there's very few people on the beach."
Many companies are still nervous about hiring full-time IT workers, and are turning to consultants to upgrade their IT infrastructure and to fill other IT needs, Melland said. U.S. companies are looking to consulting firms to give them flexibility to bring in IT skills for specific tasks, "without having that long-term commitment," he said.
In addition, companies are turning to consultants because tech workers have been hesitant to switch jobs, he said.
Despite the relatively low unemployment in the tech industry, turnover at tech companies is low, Melland said. He would expect annual turnover rates in the 15 percent to 20 percent range, but during a November Dice survey of more than 1,000 hiring managers and recruiters, nearly 41 percent of respondents said turnover at their companies was less than 5 percent, and another 18 percent said it was between 5 percent and 9 percent.
Nearly 14 percent of the respondents of the November survey reported annual turnover rates of 10 percent to 14 percent, and only 7.6 percent of the respondents reported turnover of 20 percent or more.
"It's our belief that turnover is still artificially low because people in general are still nervous about the economy," Melland said. "You don't have that natural flow."
In some cases, tech workers may be staying in their current jobs because their houses are worth less than they owe for them and in other cases tech workers may be nervous about leaving good jobs for new companies, Melland said. Tech workers "don't want to be the last person in the door at the new place," he added.
During the first two months of the fourth quarter, an average of 388,000 workers in professional and business services quit their positions each month, according to the U.S. Bureau of Labor Statistics. That's up about 10,000 per month from the third quarter, but below the 10-year average of 405,000 voluntary resignations per month, Dice noted.
Job growth in the tech industry during the past three-and-a-half years has outpaced growth in the industry after recessions in 1991 and 2001, Dice said.
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Melland expects to see tech salaries increase in 2012 when Dice releases its salary survey in the coming weeks. Dice found a salary increase of more than 2 percent in 2011, boosting their average annual wage to US$81,327 from $79,384 in 2010. Wages were flat in the previous two years.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com
