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Megan Hickey/MEDILL

Internet-based companies such as Chicago's Groupon are creating more jobs--but not the type you might expect.

Internet jobs booming, but are they good jobs?

by Megan Hickey
Oct 24, 2012


Megan Hickey/ MEDILL

Internet-based employment numbers from the U.S. Bureau of Labor Statistics show that job creation has been trending upwards since 2007.

Adding almost 30,000 jobs, the Internet publishing and searching industry has seen the most post-recession growth since 2010. While job creation at Internet companies may be on the rise, many of the jobs available are less skilled and lower profile than positions traditionally associated with the industry.

The workforces at companies such as sports sites, Internet advertisers, search engines, news publishers and Internet radio stations have increased 30 percent in the past two years, according to a report released Wednesday by CareerBuilder, the job search website co-owned by Chicago-based Tribune Co.

And the trend extends beyond Internet companies – the U.S. technology sector overall is also seeing growth. The tech sector accounts for 2 percent of all U.S. jobs, but provided 6 percent of all new jobs in 2010 and 2011, according to a report by Andrew Bartels of Forrester Research Inc., a technology research firm in Cambridge, Mass.

While growth in the Internet industry is no surprise, the hiring trend appears to have been affected very little by the recession. Paul LaPorte of the U.S. Bureau of Labor Statistics explained that employment at Internet companies was already trending upwards before the economic downturn. “If you look at the data from 2007, the growth doesn’t come as a surprise at all,” LaPorte said. “The data implies that the trend would have continued upward even without the recession.”

While job creation may come as good news to the nearly 400,000 unemployed workers in the Chicago area, some people in the industry question the quality of the jobs that have been created post-recession. Designers, engineers, and programmers used to be the positions associated with Internet companies, but experts say that most of these new jobs are low-skill and entry-level, often in sales or distribution.

Outplacement expert John Challenger of Challenger, Gray & Christmas Inc. went as far as comparing these entry-level tech jobs to factory jobs in the Industrial Era. “While they might be cleaner and safer, these tech jobs are still low-skill jobs that are in demand,” said Challenger. Essential, but not necessarily high profile, much of the Internet’s job growth is due to the demand for these positions.

Chicago-based Groupon Inc. is an example of a company that hires primarily in its sales division. Roger Coakley is a former employee of the “daily deal” company that has hired a slew of workers since its launch in 2008. He was at the company for more than a year when he left in November 2011, looking for a “higher quality job experience.”

“It’s not a bad entry-level position for kids straight out of college, but they should expect terrible hours and unrealistic quotas,” said Coakley who started at the company after several other sales positions. “My job was based on cold-calling vendors in Charlotte, people I couldn’t even talk to face to face. I was making hundreds of calls a day and getting hung up on regularly.”

Also discouraging, Coakley said, was the lack of a career path. “The problem is that there’s not a lot of potential to move up,” he said.

Analysts that follow Groupon and its growing raft of competitors are also aware of this complaint. Aaron Kessler of Raymond James & Associates explained that there is a much higher ratio of lower-level sales positions at Groupon than at companies such as Google, which hire more people at the engineer level. “Groupon is a feet-on- the-street business,” said Kessler, referring to the company’s need for a huge sales team to reach retailers.

Retail giant Inc. is a fast-growing company that has seen an increase in “call center” jobs, especially for seasonal employment. Challenger expects the online shopping site to hire nearly 50,000 employees for the Christmas season, but most will be in customer service jobs for the anticipated influx of orders. Unlike sales positions at traditional retailers, Amazon employees don’t physically interact with clients and may not even touch products, Challenger noted.

Customer service and distribution center jobs may be key to many Internet companies, but there is often little room for advancement. “The difference is that these semi-skilled jobs are not as good as the jobs that require know-how or experience as people grow in their careers,” Challenger said.

Former Groupon worker Coakley agrees that such jobs have a high rate of burnout. “There seems to be a lot of turnover in the Internet industry overall,” he said, “Which might just speak to the quality of these new jobs that are being created.”