What a difference a year makes in the IT job market. Last year the real impact of the crisis in the global economy was starting to filter through to the job market. But it seemed at the time those working in IT were inoculated against the spreading crisis. After all, organisations still need to run their businesses and IT is a critical part of operations for many.

Now a new Organisation for Economic Co-operation and Development (OECD) reports that IT workers are partaking of the suffering as well. What is remarkable is some of those jobs may never come back, so if you are a student looking at IT as a future career it is best to wisely choose for the talents in demand rather than those in decline.

I derive this analysis from the OECD's analysis of longer-term trends, which suggest that the ICT (information and communication technologies) sector is becoming less employment-intensive. The trends also show that ICT specialists make up around three to four percent of total employment. Ongoing occupational specialisation is continuing as higher level ICT skills are required. However the OECD's overall analysis show the continuing growth of ICT specialists as a share of the total labour force.

Employment is dropping in the ICT goods sector and remaining flat in most ICT services, according to the OECD study. Employment in ICT manufacturing dropped by around six to seven percent year-on-year in most countries in the second quarter of 2009. In the US that year-on-year downturn in ICT manufacturing employment reached 10 percent in September 2009.

Meanwhile in ICT services, the sector of most interest in an IT intensive economy like Bermuda, growth was maintained throughout most of 2008 with demands for IT and business process outsourcing holding firm as companies continued to focus on reducing costs via offshore outsourcing.

That growth started to fall at the beginning of 2009, with the quarterly revenues of the top-10 services firms starting to fall. This was partly due to companies favouring small and short-term IT projects over high-value and long-term IT investments.

Total employment by top-10 IT services firms decreased slightly in the first half of 2009 compared with 2008, still far short of the 13 percent employment drop experienced in 2002. In the first half of 2009, the top-10 IT services firm employed about 638,000 people, 4,000 less than in 2008 or a drop of one percent of the total workforce.

Overall, employment in IT services has been flat or has increased slightly in most countries but declined by two percent in the UK and the US. Among the 80 global ICT firms analysed for the report, job cuts averaged one to two percent in the first half of 2009. Based on current announcements by ICT firms, the OECD forecasts that employment in the ICT services sector will drop by an additional two to three percent by the end of 2009.

Looking closer at the offshoring trend, internal cost-cutting and the perceived benefits of a more flexible approach to the external sourcing of IT and business process services has become a more fixed strategy for companies.

In terms of total IT budgets, recent quarterly data on the outsourcing market indicates that, despite the number of outsourcing transactions still increasing, revenue growth through IT and business process outsourcing will probably decline in 2009, the OECD predicts.

However, Indian firms have responded by changing their service product mix to adapt to the evolving market demands. They are still increasing their number of employees, although recruitment is slowing.

"On the client side, in contrast, IT and business process outsourcing has led to job cuts or at best to job transfers to the outsourcing providers," the report states. "With offshore outsourcing, however, job transfers become unlikely, and concerns have been raised (once again) whether increased offshore activities could lead to a shortage of ICT skills in OECD countries in the long term. This could indeed not only become a serious issue for the ICT sector after the crisis, but could reinforce the need for further offshoring as ICT skill shortage is known to be a driver for offshore outsourcing."

The OECD notes that a viscous cycle could result. A shortage of ICT skills is most likely to occur again and reinforce the need for further offshoring, the report notes. The result Indian service firms are increasingly recruiting in OECD countries as more IT staff are looking for work. Your next job may be in India!

The growth areas are jobs in environmentally-friendly ICT development and cloud computing. Green computing is definitely a growth area as it is in most sectors due to consumer and regulatory pressure. Cloud computing is coming to the fore as a means of cutting IT expenditures.

Cloud computing is increasingly attractive due to its potential of reducing capital expenditures and delivering scalable IT services at variable costs.

Some large companies are already adopting cloud computing for non-critical businesses in order to cope with peak demand for their IT services without having to buy additional IT equipment. These include the use by NASDAQ of Amazon's web services.

According to IDC, the market for cloud computing services will grow by around 40 percent over the next year. So employment by cloud computing service providers can be expected to remain stable if not increase over the next year, the OECD concludes. So that is certainly an area budding IT students should consider.

For further information check out Salesforce.com, which provides a cloud computing-based Customer Relationship Management service, and its cloud computing platform, Force.com, which enables businesses to develop and run their own cloud computing-based applications. It is worthwhile to also get the OECD report "The impact of the crisis on ICT and ICT-related employment", at www.oecd.org

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