Tech Jobs Are Sprouting Again

Companies need more warm bodies to meet new demand for gear and services

Back at the height of the boom, Mark Herleman spent many a heady day advising corporate clients on which technologies best suited their needs. But last February, Herleman's employer, FreeMarkets Inc. (FMKT ), a Pittsburgh company that creates online corporate exchanges, gave him the pink slip. His job prospects got so bleak that Herleman took a gig digging ditches at a cemetery. It wasn't until April that the 25-year-old left his shovel behind. He landed a job at consulting giant Accenture Ltd.'s (ACN ) supply-chain practice, where he'll help companies buy more goods online. "I went from high tech to low tech to high tech again," Herleman says. "It was such a relief."

For the first time in three years, the tech job market is showing signs of life. After losing some 900,000 jobs since April, 2001, the industry created 2,600 jobs in February and added 11,600 more in March, according to the Bureau of Labor Statistics. And with the tech recovery gaining steam, that appears to be just the beginning.

BROAD-BASED TREND. Mark M. Zandi, chief economist at Inc., expects tech to create 53,000 jobs this year and an additional 207,000 in 2005. While the pace of hiring pales in comparison with the late 1990s, tech employment remains a key component of U.S. job growth. Over the next five years, Zandi predicts, the industry will create 667,000, or 7.2%, of the projected 9.2 million new jobs.

Thanks to Corporate America's robust demand for tech gear and services, the hiring is relatively broad-based. Lehman Brothers Inc. (LEH ) economist Ethan S. Harris expects spending on business equipment and software to rise 14.5% this year, compared with 5.5% in 2003. The strong demand means tech providers can no longer rely solely on outsize productivity gains to keep their operations humming, as they've done for the past few years. Companies now need more warm bodies if they want to get products and services out the door.

As a result, everyone from Accenture and chipmaker Qualcomm to software maker Symantec is planning to take on more engineers, software jockeys, and project managers in '04. "We're hiring at twice the rate of last year," says Libby Sartain, a human resources executive at Yahoo! Inc. (YHOO ), which has 305 openings.

Even better: Companies are filling positions that many feared would be sent to China or India. While software and chip companies will continue to shift their low-level support and maintenance tasks overseas, they are also beefing up their domestic engineering talent. In the first quarter, says the BLS, 3,200 engineers found jobs. These skilled folks will create such new products as Web applications and cutting-edge chips. Chipmaker Texas Instruments Inc. (TXN ) aims to hire 1,000 engineers this year to help design its wireless and broadband chips.

HANDHOLDERS NEEDED. Management consulting is another hot area, creating 10,500 new jobs in the first quarter, says the BLS. These positions are particularly resistant to moving offshore because consultants must spend a lot of face time with customers as they build or maintain technology systems. Accenture expects to add 8,000 people in the U.S. this year -- its biggest hiring binge since 2001. The firm is taking over the computing, accounting, purchasing, and other systems of scores of corporations and needs lots of consultants and engineers to handle the load.

People adept at overseeing the development of software products also are in demand. Indeed, many with such skills are once again being snapped up. After losing her job at USF Corp. (USFC ) this January, Roshan Utamsingh, 35, pounded the pavement in search of another. It took just four weeks for her to land at Chicago software startup Hubbard One. As a senior project manager, Utamsingh will create applications that help law firms use the Web to become more efficient. "I see lots of postings for project management," she says.

Of course, not every techie is finding it that easy. In sectors still plagued by overcapacity, such as telecommunications, layoffs will continue. In the first quarter, telcos shed 5,800 jobs, according to the BLS. Still, given the massive overcapacity that was built in the late '90s and the stop-and-start recovery since, this is the best jobs news techdom has seen for some time.

By Spencer E. Ante, with Ben Elgin in San Mateo, Calif.

— With assistance by Benjamin Elgin

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