Supply of Tech Workers Greater Than Estimated Demand

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CNBC reports the information technology (IT) sector is “where the jobs are.” And the Los Angeles Times writes that tech jobs in San Francisco are a “rare bright spot in the nation’s troubled economy.”

EMSI’s most current data, however, paints a slightly less rosy picture.

It’s clear that IT and tech jobs have mostly bounced back since the recession (or barely saw employment dips in the first place). But not every tech-related profession is faring well; jobs in computer programming, for example, have failed to reach pre-2008 levels.

And in almost all cases, the supply of IT and tech grads far outweighs the estimated annual openings in those areas over the next five years.

Overall Trends

IT jobs are spread across nearly every sector, making labor market analysis at the industry level a bit tricky. Tech jobs too are varied and can incorporate many different activities. For this data spotlight, we focused on 11 occupations — mainly in the computer specialist and database/network administrator realm.

SOC Code Description
2006 Jobs
2011 Jobs
Change
% Change
15-1011 Computer and information scientists, research
28,349
30,648
2,299
8%
15-1021 Computer programmers
452,953
433,188
(19,765)
(4%)
15-1031 Computer software engineers, applications
511,199
555,917
44,718
9%
15-1032 Computer software engineers, systems software
404,764
430,792
26,028
6%
15-1041 Computer support specialists
572,327
567,082
(5,245)
(1%)
15-1051 Computer systems analysts
584,711
606,473
21,762
4%
15-1061 Database administrators
111,008
113,975
2,967
3%
15-1071 Network and computer systems administrators
347,629
358,743
11,114
3%
15-1081 Network systems and data communications analysts
355,264
407,983
52,719
15%
15-1099 Computer specialists, all other
212,981
221,861
8,880
4%
17-2061 Computer hardware engineers
70,797
68,040
(2,757)
(4%)
SOURCE: EMSI Complete Employment (2011.3)


In total, these 11 tech-related jobs have grown by 3.9% since 2006 in the US (nearly 143,000 new jobs). The only professions on this list to see a net loss in jobs over the last five years are computer support specialists, computer hardware engineers, and computer programmers.

Computer support specialists account for the second-most jobs of any occupation in this tech group, and they’ve started to make their way back up with growth from 2010-2011. But hardware engineers and programmers continued to shed jobs in the last year — after seeing drops of 5.6% and 5%, respectively, from ’08 to ’09.

Key Industries for Tech Jobs

With EMSI’s research tool, Analyst, we’re able to quickly shift from examining occupations to the top industries that staff those occupations (via inverse staffing patterns). This is a particularly useful analysis for tech jobs.

Consider the case of programmers: the industry breakdown shows this profession is becoming more specialized. In the last five years, there are more programmers in the computer systems design services and custom computer programming services industries, but fewer in generalized industries such as temporary help services, corporate offices, and state and local government.

FASTEST-CHANGING INDUSTRIES FOR COMPUTER PROGRAMMERS
NAICS Code
Description
2006-11 Change
541512 Computer Systems Design Services
6,865
541511 Custom Computer Programming Services
5,225
561320 Temporary Help Services
-2,400
541519 Other Computer Related Services
-2,335
518210 Data Processing, Hosting, and Related Services
-1,076
920000 State government
-1,020
930000 Local government
-726
541513 Computer Facilities Management Services
-721
551114 Corporate, Subsidiary, and Regional Managing Offices
-590
511210 Software Publishers
-376


This data also suggests that some tech industries — like data processing/hosting services and other computer related services — are either getting by with fewer programmers and other assorted tech workers, or a good number of these positions have been offshored.

That doesn’t seem to be the case as much with software engineers. More of these workers have been added to IT-related industries and general industries since 2006. The biggest exceptions are wired telecommunication carriers and data processing, hosting, and related services.

FASTEST-CHANGING INDUSTRIES FOR SOFTWARE ENGINEERS (15-1031 and 15-1032)
NAICS Code
Description
2006-2011 Change
541512 Computer Systems Design Services
35,339
541511 Custom Computer Programming Services
24,660
511210 Software Publishers
5,727
551114 Corporate, Subsidiary, and Regional Managing Offices
3,260
541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
2,971
517110 Wired Telecommunications Carriers
-2,310
541330 Engineering Services
1,310
518210 Data Processing, Hosting, and Related Services
-1,080
334111 Electronic Computer Manufacturing
-1,048



Metros with Highest Concentration of Tech Workers

The area with the largest share of tech workers, on a per capita basis, probably won’t come as a huge shock. The San Jose metro, home to Silicon Valley, is more than 4 times more concentrated in tech workers than the nation, and it has the highest median earnings. With a median wage of $50.14 per hour, San Jose has 7% higher wages than the second best-paying metro, Bridgeport, Conn., ($46.59), and 17% higher wages than the third metro on the list, Boston-Cambridge ($41.69).

Boulder, Colo., is the second-most concentrated metro, at more than 3 times the national average, followed by DC (with a location quotient of 2.73) and Durham-Chapel Hill, NC (2.7).

Meanwhile, DC and Seattle-Tacoma have seen the most new tech jobs since 2006. DC has added 18,205 jobs (9%), Seattle has added 14,762 (16%), while San Jose is third with 11,102 new jobs (12%).

Supply/Demand Imbalance

The job market for tech workers in San Jose, San Francisco, and other pockets of the country seems to be thriving. But there also appears to be a considerable excess of new graduates in these fields compared to the annual demand over the next five years. According to EMSI estimates, there are more than 3 times as many graduates as annual job openings through 2016.

We gauged the supply of 2009 grads from programs associated with the 11 tech professions using the US Department of Education’s IPEDS database, and looked at the completions in comparison to estimated annual openings (new and replacement jobs) for the same jobs. Note: Not all graduates from tech-related programs will work in tech-related fields (though in higher-skilled areas such as these, the chances are higher) and IPEDS data is subject to misreporting/error on a college-by-college basis.

Looking at the supply/demand numbers for the individual tech occupations, computer and information scientists have the largest glut (56,865 too many grads per year). Two other occupations have graduate oversupplies that exceed 50,000: network and computer systems administrators and computer specialists, all other.

There’s only one occupation, meanwhile, with a shortage of associated graduates: computer support specialists (not to be confused with computer support specialists, all other).

SOC Code
Description
Annual Openings
2009 Completions
Surplus/Shortage
2011 Median Hourly Earnings
15-1011 Computer and information scientists, research
1,239
58,104
56,865
$44.90
15-1071 Network and computer systems administrators
13,234
66,273
53,039
$31.75
15-1099 Computer specialists, all other
7,342
59,726
52,384
$35.04
15-1061 Database administrators
3,866
46,498
42,632
$33.48
15-1081 Network systems and data communications analysts
21,081
56,792
35,711
$28.07
15-1032 Computer software engineers, systems software
13,664
42,621
28,957
$42.80
15-1021 Computer programmers
9,670
29,847
20,177
$31.38
15-1031 Computer software engineers, applications
18,951
34,105
15,154
$40.15
15-1051 Computer systems analysts
23,023
38,104
15,081
$34.23
17-2061 Computer hardware engineers
2,420
5,804
3,384
$46.17
15-1041 Computer support specialists
22,449
3,424
-19,025
$21.10
Total
136,939
441,298
304,359


Joshua Wright is an editor at EMSI, an Idaho-based economics firm that provides data and analysis to workforce boards, economic development agencies, higher education institutions, and the private sector. He manages the EMSI blog and is a freelance journalist. Contact him here.

Illustration by Mark Beauchamp