U.S. IT labor market stabilizes, hiring in India increases dramatically

Indian companies are hiring more employees than American firms in anticipation of an increased need for outsourcing.

Two research firms say that IT employment showed some signs of growing over the second half of 2009. The TechServe Alliance, an Alexandria, Va.-based industry group that represents IT services firms and their clients said IT employment last month grew by 6,400 jobs, or 0.2%.

Foote Partners LLC, a Vero Beach, Fla., research firm that studies IT salaries and employment trends, said its analysis of five job segments showed a net gain of 6,900 jobs last month in the U.S. in occupational categories of "management and technology consulting services" and "computer systems design and related services."

The firm predicts that hiring won't pick up in a big way for the IT industry until late in the year or more likely in 2011.

Things appear to be a little different in India. Indian IT services firms Wipro Ltd., Infosys Technologies Ltd., and Tata Consultancy Services added a total of 16,700 IT employees themselves last quarter and the number appears to be rising.

These companies are anticipating that offshore outsourcing will benefit from the economic recovery, even though IT budgets will be flat this year. The reason? U.S. firms, having been burned by recent layoffs, may be seeking the flexibility to add and subtract capacity as needed. The easiest way for them to do this is to turn to outsourcers, both onshore and offshore.

Even companies that experienced business problems due to outsourcing setups in the past, may be tempted to start off with them in 2010 at least until projects get off the ground.

By Toni Bowers

Toni Bowers is the former Managing Editor of TechRepublic and is the award-winning blogger of the Career Management blog. She has edited newsletters, books, and web sites pertaining to software, IT career, and IT management issues.