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Job Picture Revisited

 
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Mark, one of your alumni brethren seems to hold a sharply different opinion on the state of the US economy and jobs as you do.
Paul Krugman's A Bar too Low

Bear in mind also that just increasing the number of jobs isn't good enough. If we want to improve the dismal prospects of job seekers � currently, 75 percent of those who lose jobs still haven't found new jobs when their unemployment benefits run out � the number of jobs must grow faster than the number of people who want to work. Indeed, because the working-age population of the United States is steadily growing, the economy must add about 130,000 jobs each month just to prevent the labor market from deteriorating.


Recently Mark, you stated your continuing belief that things aren't that bad. Are you still holding your position? What would move you to a more bearish position, as they say on Wall Street Week?
 
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I still maintain that the economy itself is not as bad as most people make it out to be.
Now I have definately been more bullish than most. I primarily cited two facts. First, that the unemployment rate (around 6%), while high, was not outrageous, especially compared to other recessions. I also noted figured such as GDP growth. I certainly admit that this recession has been unique. Typically when the GDP and other indicators rise, jobs return. This "rebound" is jobless and no one expected it.
Jobs have not been coming back, and that unfortunately. Nevertheless, I still think the economy overall is, while not great, not as bad as many claim (again, based on recent economic history).
I do see one bright side. The electoral models to which I subscribe are primarily based on changes in economic conditions and so hopefully same good can come from this hardship. :-)
I still maintain that the US IT labor market was oversubscribed and only irrational stupidity supported it during the end of the boom. I believe that strong candidates are still well employed (by and large--any particular individual with personal constraints may have a different personal perspective). I'm about to put my money where my mouth is since I'm starting a job as Director of Software Development at a Cambridge software company, and we're going to be hiring.
--Mark
 
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Hi Mark,
Was I or wasn't correct about you are executive level material if you played your cards well? Check back with the post about someone ranting about your job.
Enjoy!
MCao
 
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In the UK the IT job market is markedly better than 6 months ago. I have been in (unfortunately) constant contact with recruitment agencies the last few months and things are getting better by the fortnight.
A few theories I have that I reckon not many people consider:
a)
Only a tiny number of graduate/junior level people have entered the IT market in the last 2 years because companies have not hired at that level since pre-september 2001. Suddenly companies are finding that when they want someone with 1-2yrs expereience there is virtually no-one there.
b)
The IT labour market was bloated in the 90's. A lot of people "jumped on the IT bandwagon" as a way to make a fast buck, and a lot of these people were not well qualified or particularly able. What has happened is that the poorer candidates are being filtered out of the job pool. In 95 you could get an IT job without an IT degree, just with a bit of web design experience or an MCP, not anymore you cant. Also, a lot of IT workers have left the IT market in the last few years because of a shortage of opportunities and moved into other professions.

sorry these arent really about the economy in general. didnt start out intending thread-hijack!
john
 
Mark Herschberg
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Equally enjoyable will be the wake-up call when the economy turns around and companies who abused their employees discover a turnover rate of 50% or more. Then as they race to meet increased demand they'll find the lack institutional knowledge and will suffer staffing delays on projects.
--Mark
 
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Originally posted by John Summers:

Only a tiny number of graduate/junior level people have entered the IT market in the last 2 years because companies have not hired at that level since pre-september 2001. Suddenly companies are finding that when they want someone with 1-2yrs expereience there is virtually no-one there.


Oh yes! When I graduated in 2002, my company had 300 resume submissions and hired 3.
 
John Summers
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the graduating class of my MSc in Sept 2000 were almost 100% employed pre-graduation, all in big name companies: IBM, etc.
in my graduating class of 2000 there were about 5 out of 15 uk students who had jobs. the rest were unemployed. some did get jobs quickly but of dubious quality e.g. network support.
one year on, out of the 15 uk students, i reasonably sure about 5 out of 15 got jobs involving development. i think the others took support type roles.
Someone told me that the uk graduate 'technical' intake combined for IBM, Oracle and Sun in 2002 was nil or thereabouts...
john
 
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Originally posted by John Summers:

Only a tiny number of graduate/junior level people have entered the IT market in the last 2 years because companies have not hired at that level since pre-september 2001. Suddenly companies are finding that when they want someone with 1-2yrs expereience there is virtually no-one there.


Not to mention that a lot of older chaps have dropped out of the profession, or had loooonnnnggg periods of unemployment. 2 years plus in some cases. Many of these don't know Java, or only Java as it was in 2000. No J2EE, or only servlets. No EJB.
Hardly the best prospects for employment on a current project. Companies are learning this now. My company has a difficult time finding 'qualified' prospects for the fist time in at least 2 years. I've advised them to look for good software engineers who don't have perfect background and toss them into the ocean to sink or swim.

Originally posted by John Summers:

The IT labour market was bloated in the 90's. A lot of people "jumped on the IT bandwagon" as a way to make a fast buck, and a lot of these people were not well qualified or particularly able. What has happened is that the poorer candidates are being filtered out of the job pool. In 95 you could get an IT job without an IT degree, just with a bit of web design experience or an MCP, not anymore you cant.


The worm is about to turn again. Some of the poor schmucks who couldn't land a job the past 2 years are going to get their chance. Finally. There are a lot of projects going understaffed and that number will grow. I don't see the HTML jockies getting back in (unless they know a helluva lot more than HTML, anyway), because the pool of trained Java programmers lacking experience and the ranks of C++'ers making the transition is pretty large.
Up-to-date people are going to get promoted pretty quick. Salaries which have fallen the past 2 years will rise again. Quickly I think. There is a shortage of qualified people now which will take at least 3 years to reverse. Probably longer than that. Last time there was a 'tech bust' was between 1980-82. Five years later there was still a shortage in the field.
 
Al Newman
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Originally posted by Mark Herschberg:
Equally enjoyable will be the wake-up call when the economy turns around and companies who abused their employees discover a turnover rate of 50% or more. Then as they race to meet increased demand they'll find the lack institutional knowledge and will suffer staffing delays on projects.
--Mark


And they will blame their new people, and abuse them! Trying for 100% turnover. Strive for excellence. Of course they can't ever make it. Some losers will always hang on, at least till the company outsources everything to Accenture. Who will bleed them like a school of leeches.
Serves them right, I say!
 
Al Newman
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Originally posted by Mark Herschberg:
I still maintain that the economy itself is not as bad as most people make it out to be.
Now I have definately been more bullish than most. I primarily cited two facts. First, that the unemployment rate (around 6%), while high, was not outrageous, especially compared to other recessions. I also noted figured such as GDP growth. I certainly admit that this recession has been unique. Typically when the GDP and other indicators rise, jobs return. This "rebound" is jobless and no one expected it.
Jobs have not been coming back, and that unfortunately. Nevertheless, I still think the economy overall is, while not great, not as bad as many claim (again, based on recent economic history).
--Mark


The last recovery (1991/92) was also 'jobless' for a while, so I'm surprised that any decent economist is surprised at this one.
The last strong recovery was in 1983 after the 82 recession. Unemployment reached 10% that time and recovered strongly to less than 6% in 1984. An equivalent recovery this time would take unemployment to less than 2%. Not gonna happen, except possibly in depressed sectors such as IT and telecoms.
Are you talking about 'regime change' in the US, Mark? Could happen. I'm a conservative, but it seems to me that Bush took the tax cuts too far this time. Iraq could turn very bad on him also. I'm semi-impressed with the Democrat frontrunner, Howie Dean, and Lieberman or Kerrey could make a decent president. Wesley Clark can be described in a single word, 'overrated'.
 
Mark Herschberg
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You know, one of the things I learned in system dynamics is how mistrust can destroy relationships (specifically in the supply chain). I fear the IT labor market may become unstable.
The dot coms quickly inflated salaries. Other companies needing IT workers had to pay big bucks to keep up. When the economy went south, they say it as payback time. Now the IT workers feel abused. When the tables turn, you can be sure they'll squeeze companies for every penny. With appologies to Ghandi, "a pay cut for a pay cut only leaves the whole world broke."
--Mark
 
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Bush took it ALL too far. IMNSHO his mother should be ashamed. I CAN honestly say that I did NOT vote for him.
The economy is in a shambles. 75 percent of the companies the size of my employer are belly up. 75 percent of my associates are gone. The offshore business thrives. Labor rates drop.
Weapons of mass distruction have mysteriously disappeared for the most part.
Cover up of 9-11 events by the white house.
We supposedly won the war in Iraq and more of our boys are dying over there every day. Now the National Guard is fed up with it. Now Colin Powell says lets send the homeland security forces to Iraq. I could puke.
I am still employed. Every day that I wake up again I figure is another chance to make some small difference in the world.
Every man needs something to believe in, and I believe I need a drink.
 
Howard Kushner
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Originally posted by Mark Herschberg:
I believe that strong candidates are still well employed (by and large--any particular individual with personal constraints may have a different personal perspective).


I might have actually believed that once but the last few months I have met WAY too many counter examples. I am afriad to ask anybody anymore what they do... most of 'em are working at home depot, or are on the bench.
Sorry 'bout that chief.
 
John Summers
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I dont think the IT job market is 'good' by any means at the minute, but I sincerely believe it is getting better. I have been job hunting in the UK now for 12 months, scanning job websites, dealing with recruitment agencies, etc.
I have seen a noticeable change in the last 6 months. There are simply more jobs now than there were, and it is increasing monthly. I have had several recruitment consultants support this notion.
.NET jobs have gone crazy. there are about 5 times more than 12 months ago.
john
 
Al Newman
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Originally posted by Mark Herschberg:

You know, one of the things I learned in system dynamics is how mistrust can destroy relationships (specifically in the supply chain). I fear the IT labor market may become unstable.


Mixed feelings about this. I certainly mistrust my ex-employer, but have no cause to mistrust my current employer. Rather the contrary to date.

Originally posted by Mark Herschberg:

The dot coms quickly inflated salaries. Other companies needing IT workers had to pay big bucks to keep up. When the economy went south, they say it as payback time. Now the IT workers feel abused. When the tables turn, you can be sure they'll squeeze companies for every penny. With appologies to Ghandi, "a pay cut for a pay cut only leaves the whole world broke."


The dot.com boom may have inflated my salary, but not by much. No more than 10% or thereabouts. Nevertheless I have taken a 30% pay cut going into this job and a title cut as well. I'm now making less than I did in 1996. My theory is that it's better to be working and gaining valuable experience than not.
Two days into the new job they sent me straight into a team lead role on the client site, a fact which I plan to point out in good time. I'll be expecting a promotion to senior developer and a significant raise at that point. Assuming I perform of course, an outcome which has unfortunately been delayed by a month's recent stay in the hospital.
If not?.... But why buy trouble? Thus far I've no reason to think they won't recognize that I was underhired.
 
Al Newman
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Originally posted by Mark Herschberg:
You know, one of the things I learned in system dynamics is how mistrust can destroy relationships (specifically in the supply chain). I fear the IT labor market may become unstable.
--Mark


Some advice, for what it's worth Mark. You are a hiring manager. If you want stable relationships, don't take advantage of current market conditions. Pay what the position is worth long-term (in your estimation). Probably more than current market rates and less than dot-com days. It may pay off in loyalty, at least for a while.
 
Mark Herschberg
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Originally posted by Alfred Neumann:

Some advice, for what it's worth Mark. You are a hiring manager. If you want stable relationships, don't take advantage of current market conditions. Pay what the position is worth long-term (in your estimation). Probably more than current market rates and less than dot-com days. It may pay off in loyalty, at least for a while.



That's my point. Companies who do so are short selling themselves. I would not do that. I worry that others do.
It sounds like you got the worst of both worlds. I'll tell you that from when I started through 2001 (last time I checked), according to the magazine surveys, I was making below average pay. I didn't mind because I didn't think I was worth significantly more than I was making; I just figured most people were overpayed (and/or the magazine surveys were inflated) and people were going to be in for a big surprise. The only time it bothered me was when the CEO rambled on about how they only hire "the best and the birghtest" (in a Dilbert-esq moment I was very tempted to stand up and ask why the best and brighest made below average.)
Maybe I should have racked up some additional dollars. Certainly no company credits me for not screwing over some other company. I can't say, "I got paid less then, so now you should pay me more than the standard underpaid wages prevalent today." But in the long run, I think it helped that I had reasonable expectations, and chose long term values (skill set enhancement) over short term gain (bigger pay check).
--Mark
[ October 28, 2003: Message edited by: Mark Herschberg ]
 
John Summers
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"The dot.com boom may have inflated my salary, but not by much. No more than 10% or thereabouts. Nevertheless I have taken a 30% pay cut going into this job and a title cut as well. "
Alfred, funny you said that but salaries in the uk were inflated a lot more than 10%.
graduate salary in london, 1999, 25 - 30 k
graduate salary in london, 2003, 18 - 25k
A lot of contractors have lost >%60 of their business. My friend who is in HR at an IT firm has had people who were on 70k applying for 25k jobs.
john
 
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Oh boy, eveybody's picking on this one. WTH, I haven't been heard from yet.

Originally posted by Mark Herschberg:
I still maintain that the economy itself is not as bad as most people make it out to be.
Now I have definately been more bullish than most. I primarily cited two facts. First, that the unemployment rate (around 6%), while high, was not outrageous, especially compared to other recessions. I also noted figured such as GDP growth. I certainly admit that this recession has been unique. Typically when the GDP and other indicators rise, jobs return. This "rebound" is jobless and no one expected it.
Jobs have not been coming back, and that unfortunately. Nevertheless, I still think the economy overall is, while not great, not as bad as many claim (again, based on recent economic history).
I do see one bright side. The electoral models to which I subscribe are primarily based on changes in economic conditions and so hopefully same good can come from this hardship. :-)
I still maintain that the US IT labor market was oversubscribed and only irrational stupidity supported it during the end of the boom. I believe that strong candidates are still well employed (by and large--any particular individual with personal constraints may have a different personal perspective). I'm about to put my money where my mouth is since I'm starting a job as Director of Software Development at a Cambridge software company, and we're going to be hiring.
--Mark


I'm not sure I was ever that down about the economy, as I am abut the future of the economy. Aside from slipping salaries, there's been a lot of slippage in jobs themselves - UNDERemployment is measured even less reliably than UNemployment, and we've had it repeatedly pointed out that if you give up in despair, the government no longer counts you as unemployed.
It's still too soon for me to put faith in electoral corrections based solely on the economy, so I'll pass on that one. The economy can make just enough of a rebound to allow people who underperformed to retain office and continue to underperform. Then again, if offshoring is really sucking out that many steak-and-potatoes jobs from the economy, I'm not sure it even matters who is or isn't (re- or otherwise) elected.
Glad you put in that caveat: "any particular individual with personal constraints may have a different personal perspective". I think it's reasonably safe to say that I didn't work over 6 years as a mainframe Systems Programmer, leave the company, come back and work another 6+ years there and not have some creds. And I'm doing quite now credibility-wise doing J2EE architecture design where I am now.
But between those 2 positions I spent 28 months living off tax refunds, sale of real estate and inheritances (and my relatives are neither rich enough nor numerous enough to play that game again).
Yeah, it could have been just my bad luck. On the other hand, I was riding the bus into work the other day (MY consumer confidence isn't restored to the level of buying a new car, thankyouverymuch). One fellow-rider wearing a shirt emblazoned with the logo of a local Fortune 500 company was greeted by another and responded with less than complete enthusiasm about the job picture. They then fell to discussing a mutual acquaintance formerly in the $80-$100K income bracket who now delivers mulch for a living at $7.50 an hout. Needless to say, it put that new car purchase that much further into the future for me.
So. When you start getting bombarded with all those pitches for cheap offshore services in your new endeavour, are you going to go for the short-term competitive edge?
Detroit is awaiting your response!
 
Al Newman
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Originally posted by John Summers:
"The dot.com boom may have inflated my salary, but not by much. No more than 10% or thereabouts. Nevertheless I have taken a 30% pay cut going into this job and a title cut as well. "
Alfred, funny you said that but salaries in the uk were inflated a lot more than 10%.
graduate salary in london, 1999, 25 - 30 k
graduate salary in london, 2003, 18 - 25k
A lot of contractors have lost >%60 of their business. My friend who is in HR at an IT firm has had people who were on 70k applying for 25k jobs.


Well sure, John. I worked with a young chap who got a raise from 29k to 52k during the boom. He probably wasn't even worth 29k. The one time I worked with him I had to clean up most of his work, so I thought he wasn't worth 0k!
My salary in 1996 was about 55k (pro-rata), which went to as high as 65k during the dot com boom. I'm now in the high 40's. That is a drop any way you look at it. I think I'm worth at least 55 in anything like a normal market, but good luck getting it this year!
The people going from 70 to 25k are a mark of desperation more than a true measure of worth. They probably are worth between 45-55k in real terms, although the high cost of living in London also needs to be factored in.
One thing I do know is that right now the pay rates are not repaying the investment I have to make to stay current in my field. I am wagering that this trend won't last long term. If it does, well then I'll have to think again.....
[ October 29, 2003: Message edited by: Alfred Neumann ]
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