The job market for tech professionals, clobbered in the 2000 stock market crash, finally is starting to come back. A new survey compiled by Dice, an online job-listing service for engineering and tech professionals, shows a vastly improved employment picture.
The number of tech jobs is growing, and salaries are rising, too. Scot Melland, Dice president and CEO, discusses the previously unreleased data with BusinessWeek Online senior writer Steve Rosenbush. Jobs and salaries are increasing, Melland says, especially along the East Coast, where financial services and defense are driving demand. Melland points out that outsourcing isn't siphoning off a lot of U.S. tech jobs. He also notes that the gender gap in tech salaries is narrowing. Highlights of the interview follow:
Q. How has the tech job market changed over the last year?
A. Overall, the market for tech professionals has vastly improved over the last 12 to 24 months. We're seeing an increase in salaries for all kinds of skills. Within that, there are always particularly hot markets. The biggest gains are on the East Coast. Markets like New York and Washington, D.C. came back very strong.
They're the biggest job markets on our site. New York has 8,600 listings, compared with 4,000 in July, 2003 and 6,400 in July, 2004. Washington has 7,600 listings, compared with 3,100 in '03 and 6,000 in '04. Out west, Silicon Valley has 6,300 listings, compared with 2,200 in '03 and 4,400 in '04.
Demand for tech professionals is rising again. Companies are spending more money on technology, and demand for tech professionals is up. The unemployment rate for tech workers is 3.7%, which is much lower than the nationwide rate of 5%. Any time the unemployment rate is below 4%, you have a tight labor market and salaries start to increase. At the same time, universities and community colleges are turning out fewer people with tech degrees. That's also helping to push salaries higher.
Q. Isn't the strength on the East Coast surprising, since the Valley is the epicenter of the tech industry? Why is the market in the East so strong?
A. The growth in the East is being driven by industries in those local markets. Financial services is very hot in New York. It has a huge need for tech professionals. And the Washington and Baltimore market is driven by growth in the defense and aerospace industries. If you're a tech professional with a current security clearance, you can pretty much write your own ticket now. There's enormous demand.
Q. What's the deal with the Valley?
A. The Valley isn't doing poorly. Job listings are picking up there as well. But there was such a boom in 2000 and 2001, and it crashed so hard, that even now people compare it the peak. That makes it seem like it isn't doing that well. But actually, it is.
Q. Has outsourcing continued to draw a lot of tech jobs out of the U.S.?
A. Outsourcing is having an impact. But the total number of jobs outsourced to other countries is about 400,000. Only 100,000 of those jobs are pure tech jobs. The rest are call center-type jobs.
When you consider that there are 10 million tech jobs in the United States, outsourcing is really a very small part of the overall market. Outsourcing is growing, and it makes sense for a lot of companies, but it's still very small. The impact isn't as large as what it appeared to be last year during the [Presidential] election, when it was a very popular issue. (For another look at where the U.S. tech jobs are, see BW, 07/25/05, "Home Is Where The Work Is".)
Q. How big is the gender gap in tech salaries?
A. There is a gender gap in tech. Women earn less than men, and that is bad. The good thing is that the gap is shrinking over time. It's come down to about 10%. And the gap is smaller than it is nationwide, where the gap is about 24%. The reason is that tech, by its nature, is a meritocracy. You can measure performance more easily than you can in many other professions.
Q. What are the hottest tech jobs?
A. Demand is strong for all four core skill sets -- software developer, network engineer, database administrator, and systems administrator. And there's strong demand for project managers, too. We see more demand in all sorts of industries, particularly financial services, defense and aerospace, health care, and biotech.