Linux IT jobs increasing, outsourcing showing signs of weakness

The job market for Linux IT professionals still looks mighty good. Actually, it looks too good -- the market has attracted enough IT pros to drive salaries down a bit, according to David Foote, president of Foote Partners, an IT compensation research firm in New Canaan, Conn. But don't worry. There are other ways to get top dollar for your messaging, security and networking skills. Another promising trend: a minor, but growing, backlash against outsourcing IT outside of the U.S.

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What's been happening in the enterprise Linux job market in the past few months, and how will those trends play out in 2005?
Linux and open source have been hot the last 12 months, in terms of new servers being launched and applications adopted, and that adds up to a hot jobs market. Companies are asking if their IT people are Linux experts and if their Unix people have moved their skills over to Linux.

We track about 45,000 IT workers, and Linux skills openings have been on a tear since this time last year. At the same time, however, the supply of Linux-certified professionals is catching up with the demand. The good news is that demand continues to rise. How does the increased supply of Linux experts impact workers?
The fact that supply is starting to catch up with the demand affects salary levels. Along with other data, we are able to track what's being paid for Linux skills. In particular, we have been tracking two certifications, Red Hat Certification Engineer and Linux Professional Institute (LPI) Level I and II. They are doing pretty well, paying at about the same average base pay as all IT skills that we cover. A year ago at this time, we had seen 14% growth over the prior year for RHCE and 17% in LPI I and II. The LPI certifications' growth in pay has stayed steady at 17% over the last two years, but RHCE pay has grown 29% over the same period.

In the last quarter of 2004, however, there was a slight decline in pay for Linux-certified employees. That doesn't mean that Linux is less popular; it means that more and more people have managed to persuade their employers that they have experience in Linux. What happens is that supply catches up to demand, and pay numbers tend to go down.

I must stress that certification is one of the best arguments for keeping or hiring someone for Linux -- and for other skills, one that wins favor with CFOs. You've also said that the smell of outsourcing IT isn't so sweet today.
Offshore outsourcing has proven to be far riskier and harder to do well than had been anticipated. Problems have arisen with outsourcers' employee retention, especially when workers tasked with knowledge transfer and vendor management are involved. There have been some security scandals with offshore outsourcing companies, where standards haven't been kept up.

Using hiring trends as an indicator, I think that companies that have outsourced big chunks of their security and customer services are rethinking that strategy. Companies have quite a stake in the protection of assets. They're wondering whether it is smart to outsource their applications, management, security or customer service.

In particular, there are types of jobs that are less likely to be outsourced, including network, data and Internet storage architects; integrators; security auditing, forensics, management; enterprise data management; data modelers; business analysts; project managers; process modelers; network managers; and CRM professionals. In what specialties is IT pay on the upswing?
Let's start with some numbers. Although pay for 150 certified and non-certified skills dropped an average 4.2% and 0.5% respectively in 2004, networking skills pay has increased 6% in the past year, messaging/groupware skills are up 4.5%, and skills relating to applications development and programming languages have grown nearly 4%. At this time last year, these same skills groups were registering annual declines of 6% to 12%. It's a complete reversal and a clear signal that businesses are once again investing in their full-time employees. What's behind this upward trend in pay in the skill areas you must mentioned and others that Foote Partners has pinpointed, such as SAN/NAS storage, Web services and Linux/open source rapid application development?
In some cases, these are hot, high-growth technologies. Across the board, however, I think that companies realized that they ought not to have fired some the people they did during the recession. They released people who they thought were making too much money. Frankly, maybe those people were too stale in some of their skills, but many were people who understood the market and the customers and were opinion leaders inside the firm. I think that companies are regretting getting rid of some of these people. So, they have begun paying retention bonuses and determining which people are worth more money, which people have certifications or levels of experience that are vital to the company.

Another thing that is happening is consulting firms are aggressively hiring right now, and there is a lot of competition in the IT professional services industry. This is driving up skills pay for consultants with niche skills in networking, information security, applications development, Web services and systems integration. There is a feeling that the consultancy can't afford to lose the good people to other consulting firms. That has had something to do with the increase in pay for certified application skills.

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What types of messaging skills are hot today?
Pay for professionals who can unify messaging is increasing. That's interesting because messaging has been kind of dead for a number of years, and now it has sort of come alive. The focus used to be solely on e-mail experts, but now there's more interest in unified systems. Could you elaborate on why networking skills are highly valued now?
In networking, generally speaking, companies have in-sourced a lot of the network and securities infrastructure expertise. Since they are putting so much of their businesses on a network and/or online, they don't trust an outsourced vendor with that infrastructure support and development. There has been a lot of hiring and again a lot of retention activity, just protecting their investments in in-house networking professionals. Cisco certifications are valuable commodities. What are the hot spots in IT security skills?
In security, what's hot right now are skills in auditing and management. The pay spikes in auditing are a result of legislation mandating third-party auditing of security. Also, it's particularly difficult to find good security managers who have a balance of security technologies, planning and processes, so pay for those skills is going up. What's going down are pay levels for firewall analysts, incident handlers and intrusion-detection specialists. That's simply because so many people now have those skills. If you're in security, extend your skills to management and get certified in management and auditing. Hot security certifications will be the Certified Information System Security Professional, Certified Information Security Manager, and SANS Institutes' Global Information Assurance Certifications (respectively, CISSP, CISM, CISA and SANS/GIAC).

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