Wheels Within Wheels

Sometimes market trends are like ripples: many can spread from one disruptive event. A good example of this is the way Moore's Law has spurred waves of growth and innovation, all driven by a single phenomenon: compound doubling of processing power. We've come a long way from the thousand-dollar calculators of the late seventies to the wired (and wireless) world of today in which computing is ubiquitous. Virtually each wave of new products along the way was made possible by the dramatic increases in computing power Moore predicted decades ago. I'd like to suggest that another unique phenomenon is behind many of the trends in today's computer market—the dramatic (and growing) shortage of IT professionals in the labor pool. This shortage is affecting our markets in many ways: some immediately apparent, some indirect. Let's take a quick look at the scope of the phenomenon: U.S. IT Hiring Activity: 1999 – 2002
(all figures are in thousands) Source: IDC According to IDC, 377,000 IT jobs went unfilled last year, due to a shortage of qualified applicants. This year, the number rises 10% to 414,000. By 2002, the shortfall is projected to reach 500,000. As you can imagine, a half-million-employee shortfall in any year would pose significant challenges in any industry, at any time…let alone America's fastest-growing industry during the current economic boom. The shortfall causes dramatic churning. At the current hiring rate, it will take only five years to turn over the entire profession. Looking at it from another angle, this year 414,000 IT positions will go unfilled because there are too few professionals to meet demand. 760,000 professionals will change jobs. That means that by the end of this year more than a quarter of all the IT positions in America will either be filled by people who have been in their jobs less than one year, or won't be filled at all. To bring this a little closer to home, of the 760,000 hires predicted to be made this year, we estimate that more than 300,000 will be software developers. Imagine how much software development isn't being done by the 25,000 developers in the process of changing jobs every month! The shortfall has given rise to a multi-billion-dollar recruitment industry — and to a number of other significant changes in the world of IT. Some of these changes are on the “supply side”: that is, they affect IT professionals. Some are on the “demand side,” affecting the companies that hire these professionals. Effects on the supply side include changes in compensation and lifestyle. On the demand side, the talent shortfall has had impact on numerous issues ranging from national immigration policy to IT training. Wages, Bennies, and Perks If you're one of the 800,000 IT professionals who can expect to find new employment in the next 12 months, your fortunes are clearly on the upswing. In fact, they're probably on the upswing even if you're one of the 3,294,000 who elect to stay put. The fortunes of software professionals are right in step with those of other IT professionals. In its 2000 Salary Survey (November 2000 issue), Software Development magazine reports that developer salaries have climbed an average of 8% since last year, with certain categories showing approaching or exceeding double digit growth:, specializations in CORBA, COM, Java, C++, Oracle, and SQL Server. More than 80% of all software professionals receive some form of supplemental compensation in addition to their salaries, with many developers receiving more than one kind of bonus or premium. These little extras can take many different forms. Most popular are performance bonuses and com