There are many unemployed, but also just as many trapped IT workers in this economic environment. Let's review how you can be competitive, whether you're new or experienced in the industry.
While you may not be unemployed, you may be trapped in your current position, unable to find work because of a lack of opportunities. There are as many horror stories as success stories, and the key is to make yourself a success story. Landing your next job is not a simple matter of listing your experience and sending your resume to everyone on Dice or Monster. Assume that landing a better job, perhaps the next rung up the ladder, will take considerably more work than you put into getting your current job. In fact, with all the IT talent that is available right now, you can also assume the same even if you're looking for a position comparable to your current one.
The Business Side of IT
Business Process Modeling, Business Analysts, Architects, and similar roles require both business and IT experience. Many analysts arrive at their positions after getting a business degree and demonstrating some rudimentary level of IT knowledge. Likewise, those from the tech side arrive at these positions improperly equipped to understand the business needs.
The good news is that both camps can easily upgrade their skills in the lacking area and get a leg up. If you're business savvy and tech-less, obtain some training and tinker on your own. Self-learning cannot be stressed enough. If you're struggling with getting motivated to run a Linux server at home, this is an indicator you are not cut out for the tech work.
If you're from an IT background you already have a leg up, as the tech skills are much more difficult to learn. Leaping over to the business side is not easy for many tech types, however. Aside from getting a business degree, which will undoubtedly help, the best advice is: get involved. Volunteer for everything you can, including project leadership roles. Project management training, by the way, is another great in-road to the business side of IT, and your technical experience will be invaluable in these positions.
The Infrastructure Side of IT
DBA, Unix/Linux sysadmin, network engineer, and security positions require hardcore technical knowledge. Especially in networking, certifications are the sole indicator by which many companies will hire you (more on that in a bit). Most positions, however, require in-depth knowledge and experience to be apparent on your resumé and during an interview. A great place to start improving your knowledge is to look at job descriptions and sample resumes. Job descriptions, because you can identify high-demand skills that you lack. Sample resumés of more senior people in your field (use Google), are valuable not only as examples, but also to indicate gaps in your experience or knowledge.
One of the best ways to raise eyebrows, in the good way, is to be involved in open source projects. You do not have to be a programmer, but instead you can participate in the community by answering questions on, and learning from mailing lists. You can test new patches, identify bugs and file reports, or write documentation, all of which will quickly integrate you into the community. Start with some piece of software or the operating system you enjoy, and the rest is easy.
Finally, the best advice ever given: Never stop asking questions. Ask, "do I really know how this works?" When you think you do, dive a level deeper. How does this routing protocol decide what to do? What is the scheduler going to do when I increase the block size of this database file system?
Are Certifications Worth It?
Certifications are a much-debated topic. In the networking world, the big vendor has made tons of money certifying people to know only their way of doing things. This is good for the certification business, and it also serves to limit the knowledge of the available talent to that vendor's products. At least, that is the critical viewpoint.
Certifications provide employers with some assurance that you have a certain level of knowledge. They are a great recruiting tool, especially for entry level positions. Higher level positions, if they require certifications at all, generally draw upon an applicant's experience and technical knowledge to make the decision. If you do not have tons of expert level experience, certifications are a must if your field is cert-centric.
Certifications are not an easy ticket to a large paycheck any longer, but a lot of first round selection decisions are still based upon these basic qualifications.
Tips for New Entrants
Tinker, tinker, tinker, and get certifications. You must show some level of self motivation and knowledge, and there is no better way than to have experience. While running Linux at home is completely different from an enterprise IT environment, you can still gain important and required foundational knowledge on your own. Ideally, it won't be on your own, though, as you will communicate with like-minded people and learn from each other.
Tips for Experienced IT Staff
Most importantly, keep up on what is happening in the industry. Participate in professional associations, and attend conferences. Read constantly, and always be more informed than the next person. Ideally you will be working on submitting a talk to give at the next conference you attend. At this point, you will no longer switch jobs by bombarding the Monster and Dice headhunters with your resume, you will instead be recruited or referred by participants in your professional network.
The same old rules apply, but these days you simply cannot chance that you will get by on luck. Become the best at something, the most upper crust of the most knowledgeable in your area, and you have nothing to worry about.