September 5, 2003
, Carry me back,
Carry me back baby,
Where I come from.
It's been a long time, Been
a long time,
Been a long lonely lonely lonely lonely lonely time.”
– Led Zeppelin, Rock and Roll
the economy seems to be turning around after a brutal
spring, if Intel and other tech giants see a very good
third quarter (and are smiling and winking when asked
about the fourth), if venture capital investment in
start-ups flattened out and started to increase again
and if you lack firefighting skills in BC, where the
heck are the jobs?
If things are getting better, why is there no
evidence of it in the job market?
Why is every second e-mail to me asking where the
good tech jobs are in BC?
survey of local technology job boards, done rather
un-scientifically by me clicking through the listings,
shows very few tantalizing full-time positions.
If there are interesting looking jobs, they seem
to be replacement positions because there appear to be
few and rather spread apart in time.
In other words, no hiring binges.
Further anecdotal evidence of tepid job
availability is the familiar “brain drain” whine
starting up again.
It is usually recent grads who can’t find a job
waiting for them after their first or second degree
espousing the “grass-is-greener” theory about the
ain’t any better in Seattle or the Silicon Valley.
Another sure sign that the job market is tough is
when the chicken littles start carping about the loss of
key jobs to off-shore markets like India. As in any
downturn, the culprit is not us, it’s them.
It’s those darned cheap and efficient Indians
and Vietnamese that are taking our jobs.
This type of hand-wringing is typical of tough
was the Japanese last time we had a recession.
Look where they are now.
to decipher technology market data from Stats Canada,
where “manufacturing” is one of the more specific
terms, is just folly.
But the larger trends are probably not far off
the technology market.
BC actually created 11,000 more jobs in July over
June and was up 1.4% over last year (seasonally
adjusted, of course).
But the overall unemployment rate is 8.4% here
and 7.8% nationally (6.6% in 2000 just as the tech
carnage was starting).
help-wanted index, which sounds like it means someone
actually counts classified and web job listings, was
down 16.6% in BC over this time last year.
So, more jobs were created, but fewer companies
were listing new jobs… huh?
It probably means that the new jobs are contract
or part time. But
the fewer listings are consistent with what I found in
the tech specific boards.
I talked here a month ago about productivity
gains and what it meant for the IT industry.
The lack of jobs for keen technology workers is a
result of those gains in productivity within the tech
industry itself. Companies are getting more with less right now because they
cut like hell when the wheels fell off of the technology
last two years have been brutal as most companies have
been busy killing projects and streamlining operations.
Now the sun is coming up and the profits are
rolling in (or soon will). The profitable companies have
been sacrificing R&D and internal processes (like IT
jobs) for straight service and sales, keeping expenses
ultra low. So
long as the top line (revenue and unit sales) remain
tepid, there is no need to hire anyone. But, even as
revenue starts to improve in the short term and profits
look really good, the hiring still will not begin.
Sorry, but it will be a while longer.
managers of IT companies have been rewarded for frugal,
bare bones existence over the past dozen quarters.
These are the recovery folks.
They hacked jobs and cut waste.
They will be slow to ramp up for growth.
The R&D expenditures will only slowly creep
start-ups, the barely cash-flow positive companies, who
smiled when they didn’t need to go back to investors
for money, will take their time in assessing the market
before daring to go cash flow negative again to
stimulate faster growth.
Caution is still the word of the day in
Not very conducive to more jobs.
will take at least two, maybe three quarters of proof
that IT spending has begun again and the economy is
chugging forward before the shackles will come off the
HR departments in the technology industry and hiring
will begin in earnest.
a rubber band snapping under the strain, the jobs will
catch up and fill the void left as economy demands more
inventory and more innovation.
A year from now, if the economy shows the
consistent strength, the job boards will be full again.
And for the chicken littles, sending work
off-shore to India and other lower paying countries will
not go away through this job growth next year.
In fact it will flourish… but not at the
expense of good jobs here.
you are waiting for this elastic snap back to more jobs,
hone your skills and find work with the outsourcers who
are doing a booming business.
IBM has reported huge gains in its Global
Services division as more and more companies have run
lean and jettisoned inside IT help.
Look for short term consulting gigs to keep your
skills fresh. The
longer term jobs are coming. They just lag the initial
phase of growth. They
always have in every cycle before.
What Do You Think? Talk
Back To Brent Holliday
Something Ventured is a bi-weekly column designed
to supplement the T-Net British Columbia web site with
some timely, relevant and possibly irreverent insight
into the industry. I hope to share some of the
perspective and trends that I see in my role as a VC.
The column is always followed by feedback (if its
positive or constructive. I'll keep the flames to
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