3.23.2003

Macro and Micro Opportunities

What we're talking about is the difference between macro and micro opportunities. The overall economy is too large and complex for us to be concerned with in anything more than a cursory fashion. None of us Fairies could predict pork belly futures nor would it apply to attaining and retaining employment in the information technology field even if we could. And the overall (macro) economy doesn't really apply to you, anyway. Not personally. Yours is a micro economy. And you don't need tons of opportunities... all you need is one.

So where are the micro opportunities these days? Some people see them in starting their own business. The Fairy of Utter Darkness is going this route. But she's also pursuing full-time employment until her product line is completely developed, with all the bugs worked out. The Fairy of Utter Light and Goodness has a thriving second career in sales while holding down a full-time job. The Leather Fairy works three part-time jobs. So what, you say? You'd settle for one job at this point. Well, not all the economic indicators are dismal. And you don't need tons of jobs available - you just need to be able to connect with a particular one at the right time.

Sure, there have been a lot of layoffs. And The Denver Post never fails to regale us with how many jobs have been "lost". However, their reporting is not entirely accurate. Nowhere have I seen them mention how many jobs have been created. That's right, created. As in new. With all that layoff money, a lot of budding entrepreneurs have set up shop. Most will fail, but a certain percentage will not. Certain companies have had successful IPOs even in this economic climate. There are industries, such as health care, which are not recession-proof, but which were just better positioned to withstand a downturn. Or there are those, like manufacturing, which got hit early and simply recovered first. Another little-mentioned dirty secret of the corporate world is that when a company is laying off is the best time to apply for employment there. Especially if you are younger and wouldn't be charging much for your skills. This is something that Qwest did.

When Qwest started to get rid of its older, more expensive workforce, they hired younger, cheaper workers in droves for customer service positions and the like. So although they've laid off 20,000+ workers, their headcount isn't 65,000 - 20,000 (= 45,000). It's still about 60,000. Charter Communications did this too. They converted the workers they'd acquired when they took over HSA from permanent back to contractor. They waited a certain amount of time, then laid them all off. At the same time, they were hiring less expensive labor (read: not as advanced in years) for what basically amounted to the same work. So just because there have been massive layoffs doesn't mean there hasn't been a lot of quiet, unannounced hiring. Plus, the massive layoffs are all but over with the large companies. The only ones still having layoffs are the smaller companies - and those affect a lot less people. I think it's offset by all the new company growth, honestly.

Now for even better news. The amount of jobs posted on dice.com (at least for Colorado) has been steadily increasing. It has consistently broken 200 listings each Sunday - and today broke 300. I haven't seen that many listings since well before the big downturn in 2001. Maybe they say that IT spending is only going to increase by 1% this year as opposed to 2 - 3%. I think that companies held back for so long that they are going to have to start upgrading their systems and improving security whether they want to or not. So that should create additional opportunities.

I still see hiring managers and recruiters whining about the labor shortage. Yes, you saw that right - shortage. A skills shortage. You see, there always was one. A lot of people just got into IT because they figured it paid well (and it did). But they weren't particularly skilled. Some of that gap was covered by hiring H1B (foreign) workers with the right skills. But these days there is considerable political backlash in doing so in light of all the layoffs. And companies have found you can only outsource to a limited extent offshore. Frankly, they do rote work well, but in the end, you get what you pay for. They are never going to be able to export the high end creative work, the hands-on system administration, or things like security. Hence the skills shortage. Now, recruiters and hiring managers have had for some time now unrealistic expectations about the skill sets their applicants should possess. Some of this gap exists in their minds and nowhere else. No, you don't need to let them know this. It keeps your price up. But for those with solid and current skill sets, and the ability to express this clearly and succinctly in a resume, job searching is not nearly the ordeal it is for others.

How do I know there really is a skills shortage? Because people's buying power has not decreased, even in this economy. It has increased. I know of very few people who have had to take pay cuts. They tended to be IT workers with skill sets that I would have considered to be more in the commodity segment than specialized in any way. Those that are employed continue to get raises and bonuses. In fact, bonuses are at a higher level than ever before. Why? Because corporate profits are at a higher rate than they have been in decades. It makes sense. Companies have been able to unload the more expensive workers and hire cheaper ones. Improved technology has resulted in increased productivity without having to increase headcount. And where one industry has retrenched, like telecommunications, others have surged, like defense. All this goes to show that you shouldn't be fooled by the corporate wailing, moaning, and sleight of hand. Let us Fairies go out on a limb to predict that things are just about back to normal, like they were in the late mid-1990's, before everyone got dot com fever. Now Alan, you heard it here first, so don't you go taking credit for our forecast!