Employment predictions for 2010

Tis’ the season for predictions into 2010. After researching data from various sources, and talking with many colleagues over the past year and into 2010, I’ve put my finger on a handful of things that popped out at me. None of these predictions are groundbreaking, they’re fairly common sense. But, I think they’re important to keep an eye on, and with the media and government telling us that the recession is over, we shouldn’t become complacent in preparing for the upcoming year.

  • There WILL be continued higher than average unemployment numbers through the end of 2010. Sorry to be the bearer of bad news, but things aren’t going to get immediately better this year. After talking with colleagues in the consulting business, the general attitude towards 2009 was dismal. The silver lining was a busier than normal December. I always say the consulting business is a good barometer of the general employment market, but full-time hiring is about 6 months behind contingent hiring. So, if December was the start of something positive, we’re still not going to see the unemployment numbers dropping much until Q3-Q4.
  • Increased contract/contingent workforce. IT has stabilized in general, but companies are still a little skeptical of making a large investment in hiring employees right now. I think we’re going to see a gradual increase in the number of full-time vacant positions in the upcoming months, but I’m certain we’re not going to notice a huge difference in non-contingent vacancies until the end of 2010 and into 2011. Companies need IT workers, so we’ll see more contract labor this year than in years past.
  • High turnover. When things do officially get better, we’re going to see employees turning over like crazy. I talk to and know a lot of people who are getting handed more and more work and hours, for less money, and for no appreciation. However, most people are smart and aren’t complaining about having a job, and willfully accept the additional tasks and responsibilities. But beware, those people are looking, and when they find something they’ll be gone faster than donuts at a fat camp. Now is the time to invest in pumping up employee morale, the turnover that’s bound to happen will cripple some organizations.
  • An increased investment in technology. Companies have been taking the wait and see approach now for well over a year. Projects have to be done, companies can’t take 2 years off of investing in technology. Besides, don’t you invest in technology to gain efficiency and a competitive edge? Gartner estimates that we’ll see a 3.3% increase in IT spending in 2010. I predict Application Development, IT Security, and SAP as growth areas specific to IT.
  • An increased amount of “off-shore” / “on-shore” outsourcing/development. This is never going away, but I think the bargain shopping CIO/CEOs, IT leaders, etc. are going to look for ways to still invest in IT, but dramatically reduce their cost. This is a fairly big misnomer. If managed correctly and heavily, off-shore development can reduce costs, but managing that relationship and model is extremely challenging. More times than not, the cost savings diminishes very quickly because of the quality of the work and the increased amount of time it takes to complete the assigned tasks. If anything, we’ll see a bigger increase in contract labor to clean up the mess that was made. I think the larger outsourcing arrangements will continue to fade, and smaller niche consulting companies will start to see an increased interest in their outsourcing capabilities.
  • A small increase in start-ups, particularly healthcare. There’s more money flowing through the economy right now, the stock market is up, and more investors are looking for ways to make a buck. With government healthcare reform, we’re going to see companies popping up left and right to take advantage of the new policies and programs (when they’re all ironed out). The entrepreneurial spirit will kick in and people with smart ideas will get the funding they need to launch their ideas into solutions.
  • Older workforce, and baby-boomers delaying retirement. 401k and retirement accounts were destroyed over the past 2 years. While some of that has come back, it’s going to be 2-5 years of additional work to recover what was lost (at least). Companies may offer buy-outs and incentives to get some employees into retirement, but I don’t think many will take the offers. Companies will continue to find ways to leverage the knowledge and experience of that workforce, and they will be a key demographic in assisting companies with their part-time openings, particularly retail.

It’s fun to throw out predictions, but let’s hope 2010 is better than anticipated. Dust off the cynical negative cobwebs and start thinking positive about the possibility of growth and stability in the employment sector. The economy is recovering, things are looking better and brighter, but it’s going to take some time for everything to shake out.

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