More Jobs Vanish: IT’s Gains Are Real People’s Losses

The employment numbers in the United States remain scary and sobering: In September, companies shed 263,000 more jobs, increasing the unemployment rate to 9.8 percent, according to the U.S. Bureau of Labor Statistics. The construction, manufacturing, retail trade and government sectors suffered the worst losses.

Today, 15.1 million people are looking for work, during the worst job market in 26 years.

And while some companies have plans to fill the occasional position next year, it’s just a fraction of what we’ve already lost. (See CIO.com’s IT Job Search Bible.)

Those positions that have been eliminated are most likely gone forever, economic indicators and researchers say. Why? Because, in part, of IT’s ascendance in 21st century organizations. The recession that commenced in December 2007 has forced businesses and government organizations to fully realize the dream and ultimate value of information technology and their systems: Fewer workers and more productivity.

Department of Labor statistics for 2009’s second quarter show that labor productivity increased at a 6.6 percent annual rate. “This was the largest productivity increase since the third quarter of 2003,” notes the Labor department’s release.

Perhaps companies were a tad overstaffed before the recession, though I believe the productivity data shows that technology is indeed being used more effectively and strategically by businesses.

Either all companies have become maniacal in their employee expectations (there’s probably a touch of that as well as people’s strong desire to hang onto their jobs), or those remaining worker bees are finally unlocking the computing power and decision-making capabilities inherent in their companies’ ERP, CRM, BI and supply chain apps.

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The recession simply provided the spark. Recent research from the Economic Policy Institute shows that recessions can and do lead to the adoption of new technologies. Among the reasons why that is the case, notes author John Irons, “technology is often embedded in new physical equipment: as production and employment is reduced, there is less purchasing of newer equipment. As a result, workers are less able to utilize their skills, and there is less need to ‘up-skill’ current employees or hire additional employees with new skills.”

In addition, cheaper, better and faster technology mechanisms can be the driving force of innovative thinking during a recession. “Technology is transforming innovation at its core, allowing companies to test new ideas at speeds—and prices—that were unimaginable even a decade ago,” write Erik Brynjolfsson, a professor of management at the MIT Sloan School of Management, and Michael Schrage, a research fellow at the MIT Center for Digital Business, in a recent article in MIT Sloan Management Review. “The result? Innovation initiatives that used to take months and megabucks to coordinate and launch can often be started in seconds for cents.”

And with far fewer employees.

This, of course, is the nasty, unintended consequence of realizing technology’s aspirations: Many people go without jobs because there is simply no need for their skills anymore. And the “good old days” seem highly unlikely to return.

Are the worker ranks ready to accept their own and others’ fates because they are ill-suited for the technology revolution and will be displaced by IT’s growing omnipresence? They don’t appear to have a choice.

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