Don't be fooled: June's high IT job numbers are deceptive

What looks like a surge in IT hiring is simply Verizon strikers returning to the job. The year's IT hiring remains weak

Don't be fooled: June's high IT job numbers are deceptive
Credit: ShahanB

Remember last month when we said not to panic over May's ghastly IT employment numbers? You still shouldn't panic -- but you shouldn't break out the bubbly, either.

The Bureau of Labor Statistics said that IT employment for June 2016 amounted to around 9,600 new jobs. It's a slight uptick from last year at the same time, but it's not nearly enough to make up for the weak performance of the IT job market overall this year.

Part of what made this sluggish growth harder to discern was the "loss" of 37,200 IT jobs last month because of the Verizon strike -- jobs delisted from payrolls and BLS stats. When the strike ended last month, most of those workers (28,100) came back into the picture, producing an illusory total gain of 37,700 for the month.

IT analyst firm Foote Partners LLC saw that of the real gain of 9,600 for June, the biggest gains were in the "Management and Technical Consulting Services" and "Computer Systems Design/Related Services" categories. Even those segments lagged, though. Together, they yielded 7,400, where last year's average growth in those sectors was 11,242.

Foote believes that the current BLS categories no longer adequately capture the real growth in IT. But a more immediate and pervasive problem in Foote's eyes is "a distinct unwillingness in employers to invest in additional full-time tech staff," as stated in a release.

Most full-time hiring, Foote claims, is in "niche areas, such as advanced analytics, cybersecurity, and certain areas of software development and engineering like digital product and disruptive technology. These niches simply do not represent enough hiring to move the needle in the larger national labor market. " Where hiring is taking place, it's biased toward "consultants and other services industry workers," rather than full-timers, in Foote's view.

Job growth outside of the IT market has also slowed since 2015. June was a relatively strong month for hiring generally, a rebound from the last few months, but if the Verizon strike blip teaches us anything, it's that average growth over months and years is a better indicator than a one-month sample.

In theory, the looming presidential election in the United States is a big reason for hiring jitters across the board. However, a recent survey of CEOs and CFOs claimed otherwise -- interest rates and borrowing costs, to name two other factors, ranked higher as concerns.

Everyone's also bracing for Brexit's impact on domestic IT hiring. Gartner is estimating a 2 to 5 percent downturn in IT spending in the United Kingdom, but it's unclear how much that will in turn depress IT spending globally, including personnel budgets.

From CIO: 8 Free Online Courses to Grow Your Tech Skills
Notice to our Readers
We're now using social media to take your comments and feedback. Learn more about this here.