IT Hiring Rebounds in June, but Overall Growth Remains Slow

IT Hiring Rebounds in June, but Overall Growth Remains Slow

IT hiring rebounds in June, reversing a steep drop in May (much of which was attributed to Verizon strike by 40,000 workers – 17,000 telecommunication) but signaling continued softness in the technology job market as firms cope with uncertainty from the upcoming U.S. presidential election and the United Kingdom’s decision to leave the European Union.

IT hiring rebounds
IT hiring rebounds

U.S. employers added 34,200 information technology jobs in June, following a loss of 19,400 positions in May, according to an analysis of Bureau of Labor Statistics data by consulting firm Janco Associates Inc. The June figure is up significantly from the same month a year ago, when 6,800 jobs were added.

About 46,500 IT jobs have been created year-to-date, down from 69,400 at this time last year. Growth in IT jobs hit a five-year low in April, CIO Journal reported.

Janco projects a net decrease in the size of the IT job market this year. The firm estimates 76,500 jobs will be added at year’s end, compared to 112,500 in 2015.

“At the beginning of the year people were much more optimistic,” said M. Victor Janulaitis, Janco’s CEO. Last month’s uncertainty surrounding the upcoming U.S. presidential candidates and questions over the implications of a Brexit scenario prompted many firms to become more cautious across the board. ” Everyone’s saying we’re really slowing down this summer.”

That means companies may not fill IT roles left open by retiring baby boomers and may cut back on contractors and consultants. Unessential technology upgrades without a clear return-on-investment may be tabled for the time being.

The forecast is not without bright spots. Companies have been hiring application developers and designers, Mr. Janulaitis said, although most have been internal. And a survey from Janco this month found that average compensation for all IT professionals has increased to $82,775 in 2016 from $ 82,246 a year ago.

IT Median Salaries
IT Median Salaries

Janco’s employment findings are based on an analysis of a basket of IT-related jobs data drawn from the Labor Department’sBureau of Labor Statistics.

The broader economy also rebounded in June, adding a seasonally adjusted 287,000 jobs. That followed a dismal gain of 11,000 jobs in May.

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Author: Victor Janulaitis

M. Victor Janulaitis is the CEO of Janco Associates. He has taught at the USC Graduate School of Business, been a guest lecturer at the UCLA's Anderson School of Business, a Graduate School at Harvard University, and several other universities in various programs.