KU-ITWF Progress Report 1:
Industry and Employer Size Distribution of the Kansas City Information Technology Workforce

1 October 2002
This revision: 7 March 2005

Data from 2000 industry-occupation matrices are available at the national level reporting employment in the most important categories of IT occupations:

• Computer and Information Systems Managers
• Computer Specialists
• Computer Operators

These data are derived primarily from the Occupational Employment Statistics (OES) Survey conducted by the Bureau of Labor Statistics. They show the numbers employed by industry at the 3-digit SIC code level of detail. In aggregate there are 3.34 million IT workers in these employment categories, amounting to 2.3% of the national labor force.

The national employment figures by industry are reported in Table 1. The top 20 industries account for 80% of total employment and include all industry categories that employ 1% or more of IT workers nationally. Of these several are not feasible to include in our study because the concentration of IT workers is small–e.g., wholesale trade, other, in which IT occupations are just 4.5% of total industry employment–self employed workers.

Data by occupation are available for Kansas City but are not broken down by industry. They are reproduced in Table 2. In aggregate these data show employment of 34,860 in the IT occupations listed above. Kansas City has above average numbers of Computer Hardware Engineers, Network and Computer Systems Administrators, and Computer Systems Analysts; and below national average numbers of Computer Software Engineers (systems software), Computer Programmers, Database Administrators, and Network Systems and Data Communications Analysts.

To obtain information about the universe of employers in the leading IT employing industries we have purchased an establishment sample from Genesys Sampling. We restricted the sample to the following industries:

• 357: Computer and Office Equipment
• 481: Telephone Communications
• 602: Commercial Banks, Savings Institutions, and Credit Unions
• 631: Life Insurance
• 632: Accident and Health Insurance and Medical Service Plans
• 736: Personnel Supply Services
• 737: Computer and Data Processing Services
• 738: Miscellaneous Business Services
• 871: Engineering and Architectural Services
• 872: Accounting, Auditing, and Bookkeeping Services
• 873: Research and Testing Services
• 874: Management and Public Relations

This database excludes government employment, and self-employed as well as the wholesale trade, other category. At the national level, the industries included in our establishment sample employ 2.04 million IT workers (or 61% of total IT employment). Excluding IT workers in federal state and local government reduces the total employment by 211 thousand or 6.3% of total IT employment nationally.

The Genesys data provide information on the number of establishments by size category within each 3-digit SIC code industry. This information for Kansas City is reported in Table 3. Not surprisingly the bulk of establishments are relatively small, but large establishments will account for a much greater share of total employment.

By assigning each establishment the midpoint of its employment range it is possible to estimate the total employment in each size category, which is done in Table 4. Overall, 83 percent of employment in these sampled industries is in establishments that employ more than 9 individuals.

Combining the Genesys sample data and the national occupation by industry data it is possible to produce an estimate of the location of IT workers in Kansas City across 3-digit SIC industries, and establishment sizes. To do this we took the share of industry employment in IT occupations at the national level (from Table 1) and multiplied it by the estimates of total employment by industry and establishment size for Kansas City (from Table 4). The results are reported in Table 5. In total then we estimate that there are 14, 272 IT workers employed in the establishments covered by the Genesys establishment sample for the selected SIC codes. This is about 40% of the total IT workforce that government statistics indicate is in Kansas City. At this point we cannot identify the source of the discrepancy. Based on national data we would expect to have found about 60% of Kansas City IT workers in the industries included in our sample. Three possible explanations are plausible at this point:

• The Genesys sample excludes some establishments in Kansas City, or we have underestimated employment in these industries because average employment in each size class is greater than the midpoint of the range of employment sizes;
• The percentage of IT workers in the sampled industries is higher in Kansas City than is true nationally; or
• The percentage of IT workers in other industries is higher in Kansas City than elsewhere.

Turning to the distribution of IT workers by size and industry, they are even more concentrated in larger establishments than is true of total employment in these industries: close to 87% of IT workers work in establishments with more than 9 employees, and 80% are in establishments with more than 19 employees. Looking at the column totals in Table 5 it is evident that SIC code 737 accounts for by far the largest number of IT workers, including nearly 70% of all Kansas City IT workers.

Another way to represent the data in Table 5 is to report employment figures as percentages of total KC area IT employment. This is done in Table 6. Each cell in this table shows the percentage of total estimated IT employment in the SIC code-by-employment size cell.

About the authors

Joshua L. Rosenbloom is a Professor, University of Kansas Department of Economics and Research Association National Bureau of Economic Research.