IT hiring ends 2014 on an upswing

The 7,900 IT jobs added in December were good news, even as questions persist about stagnant wages and low job participation rates

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IT hiring in December didn't equal the highs of some other months this year, but IT jobs were still added to the economy at a steady clip. The IT sector gained 7,900 jobs in December (out of 252,000 jobs added overall), bringing the total number of jobs gained in the information technology space in 2014 to almost 113,000.

Analyst firm Janco Associates noted that the numbers from the Bureau of Labor Statistics were a vast improvement over the previous year's tally of 68,500 jobs added. The company's discussions with approximately 100 CIOs yielded a similar picture: Hiring is on an upswing, with "a real shortage of IT pros with experience in cloud based applications and mobile computing."

Another area of demand enjoying accelerated growth thanks to current events is security, with the number of job listings in that category almost doubling over the last year. InfoWorld's Bill Snyder also found that demand remains high for good old Java, but less so for big data and Web development skills.

2014 IT job gains Janco Associates, Inc.

December showed strong gains in the IT job market, rounding off a generally positive year, one persistently stronger than 2013 by nearly double.

Two other trends, however, continue to cast a pall over the bigger picture. First is the labor force participation rate, which remains at around 62.7 percent despite the lowest rate of unemployment since 2008. Work participation is not dropping drastically as it did in 2009 and 2010; it's been mercifully flat for most of the past year. But the reasons for the decline remain the subject of some head-scratching, as the rate remains at its lowest in decades. A boom year for IT hiring has kept the needle from dropping further, but only far more widespread economic good news is likely to improve participation rates.

The other trend is the minimal-to-nonexistent growth in wages year-over-year, which has dogged the economy for years and shows only modest signs of movement. IT workers have consistently outpaced the rest of the economy in terms of being better compensated and less unemployed, but in 2014 even IT jobs experienced minimal wage growth.

That said, some high-end IT job positions are expected to experience wage increases as high as 10 percent, with mobile applications development, wireless network engineering, and BI analysis as some of the biggest gainers. (Janco also anticipates seeing an uptick in IT job wage pressures for 2015.)

One possible explanation for the overall slow recovery of the U.S. labor market is the smaller number of startups or new businesses in general, which places more of the hiring burden on existing companies. IT's long been a hot spot of startup activity, but according to numbers gathered in 2011 by Business Insider, tech startups rarely hire more than a few full-time people -- and that's entirely aside from the potential effects of  innovations such as AI on employment.

What's more, company sizes are down overall. In 2012, The Bureau of Labor Statistics noted that the average size of establishments has been on the decline since 2000, implying that more companies are starting and staying small, even if the number of companies overall continues to rise.