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Jobs in Voice over Internet Protocol (VoIP) telephony commanded the highest hourly rates of all IT service jobs during the second quarter of fiscal 2008, according to the latest market report from OnForce Inc., an online jobs mart where employers and workers meet on the Internet and agree on an hourly rate.
Technology jobs related to point-of-sale systems and printers paid the least -- roughly one-third of what VoIP jobs commanded. The high hourly rates for VoIP, which follow the same pattern seen during the first three months of the year, should not surprise, according to Paul Nadjarian, vice president of marketing for Lexington, Mass.-based OnForce.
"Where there is mystery, there's margin. VoIP is an emerging technology compared to more mature categories like printers," Nadjarian said. "What was surprising is that the hourly rate index for VoIP actually increased, rising from an index score of 1.50 in Q1 to 1.95 in Q2. So relative to other categories, VoIP work is actually getting more expensive, with hourly rates now nearly double the average."
As more people gain the skills associated with VoIP implementation, the prices ought to go down, Nadjarian said.
OnForce's quarterly rankings do not provide the actual hourly rate but are indexed against a national average, pegged at 1.0, which is derived from the approximately 750,000 work orders processed since the company formed four years ago.
The report offers a snapshot of the IT service economy, in particular of the correlation between wages and the open capacity, or free time, of the 12,000 U.S. IT workers actively using the site.
The OnForce model, which has won notice in the Wall Street Journal and been praised by analysts as a win/win for buyers and sellers of IT services, is sometimes referred to as "community sourcing."
IT professionals post resumes, including feedback from other jobs they've had, and respond to job requests in their locales as the mostly on-site work requests get posted, usually in a matter of minutes.
The average hourly rates are driven in large part by availability. If there are 1,000 IT workers in an area but they all are booked solid, the rate will be higher than in an area with fewer people in less demand.
Contract job model grows as economy sputters
Security jobs came in second in the job rankings, with an hourly rate index of 1.64, followed by wiring and cabling (1.37), and consumer electronics (1.25). The job category with the highest volume of work was desktop computers, a fact OnForce attributes to the "massive installed base" and the PC market size. The fastest-growing categories in terms of volume, however, were consumer electronics, point-of-sale and VoIP.
The use of technology in retail outlets continues to grow, Nadjarian said, as stores, hotels and restaurants continue to install wireless networks, flat panel TVs and point-of-sale kiosks.
The volume of IT services work tends, in general, to increase during the late spring and early summer months, when many businesses experience a slowdown, he said. "If you are a restaurant or hotel [owner], where the summer is not a peak time for you, then you want to have all your IT work done at that time," he said. "So [you have] people coming in to hang all the flat panel TVs and set up the wireless networks."
From a big-picture perspective, OnForce has seen the volume of IT services work increase considerably as the U.S. economy has sputtered. "We think that people are moving to -- and are more open to move to -- a more contractor model," Nadjarian said. "They are looking at variable workforce."
That claim chimes with the latest IT services forecast published in July by Gartner Inc., the Stamford, Conn.-based IT consultancy. The firm is predicting 9.5% growth worldwide in IT services in 2008, up from the 6.8% predicted earlier in the year. The prediction was based on strong first-quarter results from several major vendors of IT services, but with a qualification: Some of the increase is due to the decline in the U.S. dollar rather than to a dramatic up-tick in demand.
Still, compared with other sectors of the U.S. economy, IT services continues to hold its own, according to Gartner analyst Kathryn Hale, an author of the report.
Nadjarian thinks the up-tick in contract work is being driven by service firms' need to employ contractors to keep costs down. "The technology service companies that are bidding on those contracts need to be able to provide very high-quality service at a reasonable price to win those bids," he said. "In order to do that, they have to resurface the cost of their business. And in order to structure the cost, those firms are moving toward a contract model."
Hourly rates and volume, by geography
Hourly rates by geography, Nadjarian said, tend to fluctuate widely -- as seen by the "rapid risers and fallers" in OnForce's state rankings -- quarter by quarter. And there is scant evidence of a correlation between geography and how expensive a state is, he said. Washington, D.C., South Dakota and Alaska, for example, topped the rankings as the most expensive states for IT jobs during the second quarter, more than 50% higher than the national average. During the first three months of the year, however, Washington, D.C. ranked 39th; South Dakota, 15th; and Alaska, 3rd. States where hourly rates fell most dramatically in the second quarter were Montana, Wisconsin and Kansas; each fell more than 20 spots in the rankings.
By contrast, the states with the largest and smallest IT service economies don't budge much, with California, Florida, Texas and New York grabbing the top spots in IT service volume and two small New England states, Rhode Island and Vermont, at the bottom. Houston claimed the top spot from New York City, as the largest IT services city in the country. Chicago, Las Vegas and Miami rounded out the top five metro areas for IT services.
Let us know what you think about the story; email: Linda Tucci, Senior News Writer