According to Hoyle...
Software
Development Jobs in a Down Economy
[ Part I | Part II | Part III ]
May 2009
by Jonathan Hoyle
jonhoyle@mac.com
macCompanion
http://www.jonhoyle.com
The unemployment rate has nearly doubled in the past
year and a half, jumping by nearly 20% in just the time I began this series of columns.
When Part I
of this series was published, the
United States Bureau of Labor Statistics
announced the January 2009 jobless rate as 7.6% (up from 7.2% the month before).
With the publication of
Part II,
the February data became available, jumping that figure to 8.1%. As I write
Part III (this column), I have the March figures before me, showing unemployment now
at 8.5%, the highest in over a quarter century. According to BLS, the last upward
spike in the unemployment that reached 8.5% was in December 1981. That spike
continued for another year, reaching a peak of 10.8% before it finally reversed course. More
soberly, this current spike has twice the angle of trajectory as the 1981 spike (that
is to say, it is taking only half as long to go from 7.6% to 8.5% now as it did then).
Pretty depressing sounding.
Then why is it that I am receiving more calls from job recruiters than in recent memory?
Part of it is that an overall figure of 8.5% can be rather deceptive. The U.S.
job market is not a homogeneous environment. The biggest differential is job
type: Farming & Construction is seeing a whopping 12-15% jobless rate, whereas
management and professional occupations are seeing only 2-3% unemployment. Also,
location makes a big difference. The overall rate is below 5% in places like
Wyoming, Nebraska and North & South Dakotas, but exceeds 12% in Oregon and Michigan. And
if you are really good at what you do, you will always be more in demand than others
in your field, irrespective of the jobless rate.
But in my case, it's mostly because I am a Macintosh (as opposed to Windows or Linux)
software developer that I am getting these calls. But more about that in a moment.
Are You in a Recession?
Forget about the country as a whole for the moment. The question can be asked:
Are you *yourself* in a recession?
What does it mean for an individual to be in a recession? Essentially this: If
disaster struck and you lost your job, would you be able to find a comparable job
in a reasonably short period of time?
If willing to relocate, software developers, QA and other engineering support would
likely do better than others in this current economic climate. However, most
employers find little reason to offer top salaries, considering the increasingly larger
pool of talent that becoming available by layoffs. Supply & Demand is at
work (as always), and as the supply of potential engineers grows, the price you have
to pay them goes down. This also discourages good talent who are considering
other opportunities. Since many unemployed people would be happy to take any
reasonable salary, employers see bargains everywhere. If you don't wish to be
a bargain, then you're likely to hang out where you are until things turnaround.
However, Apple developers and QA people (who are willing to relocate) can find work
tomorrow. Why is that?
The Mac Factor
I led off this column with depressing statistics, and even if the software industry
is less impacted, it is still pretty rough. And recessions have a habit of spiralling
downward. Once one business experiences trouble, it cuts back on discretionary
spending, causing a decrease in business with its clients, which in turn perpetuates
the cycle, radiating the cutbacks outward. And companies experiencing financial
difficulties are not in the best position to hire.
In January, Microsoft announced its net income falling 11% (with Zune revenue declining
by a whopping 54%), and has been forced to announce additional layoffs of 5,000 people. In
April, Microsoft's jilted dance partner Yahoo announced more job cuts (on top of the
2,600 they already let go in 2008). AMD's revenue dropped by a third in January,
and the entire semiconductor industry appears to be in free-fall. Intel had
a tough April, with its revenue down 26% and its income down by 55%. Managing
any profit at all, or at least to break even, is a major achievement. Google
managed to do it, squeaking out a 6% revenue increase in April.
And then there's Apple!
In January, Apple announced its jaw-dropping Q1 numbers, breaking all company history
with best ever revenue and best ever profits. In this economy.
Of course, that was just a fluke, right? After all, it was Christmas, and people
spent their last money on the holiday. Any gain so big in Q1 will be paid for
by poor performance in Q2, right?. Surely Apple would soon join the ranks of
the others getting spanked financially. There is no way Apple could continue
profiting in this way in such an economy. When the April figures come out, there
would be a reckoning, and we'll just see the faces of all those smug Mac fanatics then...
Yeah, well guess what?
Q2 2009 was Apple's best non-holiday quarter in corporate history: a record $1.21
Billion in profits (up 15% from 2008) and record $8.16 Billion in revenue (up 9% from
2008). Apple retails stores also seemed immune from the economic decline, with
sales actually going up from $1.45 Billion to $1.47 Billion.
For Mac bashers looking for the worst news in these numbers, let me save you time:
sales of Macintosh computers themselves declined, although only by a meager 3%. But
before you Mac haters try to make too much hay of that, you'll note that the Windows
market shrank by 7%, meaning that the Macintosh marketshare actually went up, given
this relative decrease! Despite the sales decline, a higher percentage of buyers
are choosing Macs over Windows now. Hell, even Apple's bad news turns out to
be good news for them.
As Apple continues to prosper, businesses that have dealings with Apple (whether directly
or indirectly) will likewise continue to do so. As various enterprises find
that that their Macintosh-related work is prospering relative to everything else, that's
where they'll likely be concentrating greater effort, moving forward. Add to
this the already low numbers of qualified Macintosh engineers (relatively speaking),
and you find that the need to hire Mac people continues to exist.
And that's just the Macintosh platform. Let's not forget the incredible explosion
of iPhone development, which Cocoa/Mac OS X developers are already competent to perform. Windows
and Linux developers do not have this benefit. Worse still for PC engineers,
it seems that all of Asia is mass producing inexpensive options for Windows and Linux
work. If an Indian or Chinese Windows developer can be paid a fifth of what
an American equivalent can be, this recession is just making offshoring far more compelling.
Interestingly, there are very few Mac development sites in Asia, and they are not
nearly as plentiful (nor as competent) as their PC counterparts.
Conclusion
Now this is not to say that state-side Macintosh engineers have not been hit by this
recession. They certainly have. And more are likely to be hit in the near
future. But what I am saying is that Mac people in this hemisphere are much
less likely impacted. And this is good news. And eventually this recession
will end. I don't know if that will happen this summer, next summer or three
years down the line. But at some point it will turn around. And when it
does, I firmly and sincerely believe that Apple will come out the stronger for it. And
for that reason, if you wish to tie your horse to some fence post during this economic
downturn, Apple' fence post is about as good as you're going to get.
Coming Up Next Month: Our annual
WWDC Preview Column! Don't miss it!
[ Part I | Part II | Part III ]
To see a list of all
the According to Hoyle columns, visit: http://www.jonhoyle.com/maccompanion
http://www.maccompanion.com/macc/archives/May2009/Columns/AccordingtoHoyle.htm