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Technology executives expressed increased optimism about 2012 hiring in the latest Robert Half Technology IT Hiring Index and Skills Report. Twenty percent of CIOs said they plan to expand their IT departments, and 10 percent expect cutbacks, for a net 10 percent projected increase in hiring activity. This is up four points from the previous quarter's projections.
Almost three quarters (73 percent) of CIOs said it's challenging to find skilled professionals today, up seven points from the previous quarter.
"The employment market for IT professionals has become more active, with many professionals looking for new opportunities," said John Reed, executive director of Robert Half Technology. "The new year, especially, can be a time of transition as companies staff up and IT professionals take stock of their careers."
Eighty-eight percent of CIOs reported being at least somewhat confident in their companies' prospects for growth in the first quarter of 2012; 42 percent rated the probability of investing in IT projects a 4 or higher on a 5-point scale, with 5 being the most confident.
Executives say have the greatest challenge in finding skilled IT professionals in networking (20 percent) and IT security (19 percent). Applications development, data/database management and help desk/technical support followed, cited by 15 percent, 11 percent and 10 percent of survey respondents, respectively.
Executives in the retail industry expect the most IT hiring in the first quarter. A net 17 percent of CIOs in this sector plan to expand their IT departments. This was followed by the business services industry with a net 16 percent of technology leaders anticipating hiring increases. Manufacturing was next, with a net 11 percent of executives in these industries planning to add staff.
The IT Hiring Index and Skills Report is based on telephone interviews with more than 1,400 CIOs from companies across the United States with 100 or more employees.
Overall IT compensation has remained flat for the last 12 months, increasing to $78,078, from $77,773 at the beginning of the year, according to Janco Associates. However, midsized enterprises are now starting to hire programmers, mid-level infrastructure managers, and supervisors as well as staff workers.
Since January, 55,500 IT jobs have been added in the United States, according to the Bureau of Labor Statistics. Although layoffs appear to have tapered off, some companies continue to cut the size of their IT organizations, Janco reports.
On shore outsourcing has peaked and companies are looking to bring IT operations back into their direct control and reduce operating costs. Companies are continuing to reduce the benefits provided to IT professionals. Though benefits such as healthcare are available, IT professionals are now paying a greater portion of that cost, Janco said in his mid-year salary survey.
The mean compensation for CIOs in large enterprises is now $175,363 (an increase of 2.05 percent) and $162,250 (a decrease of 0.59 percent) in midsized enterprises. Mean compensation across all IT professionals has increased by 0.39 percent (from $77,773 to $78, 078).
IBM will invest US $300 million in Costa Rica over the next decade and create up to 1,000 new technical professional jobs between now and 2014, according to published reports.
The company said it will start operations in Costa Rica in 2012 with focus on support in the area of cloud computing, and will open an information technology services center to assist corporate clients with servers, information storage, security services, maintenance and monitoring, hardware, and defect prevention software.
The company has already begun the recruiting process for technicians and systems engineers.
The Costa Rica Ministry of Science and Technology is promoting the initiative through the National Plan for Science, Technology and Innovation 2011-2014. According to the Cámara de Tecnologías de Información y Comunicación (Camtic) there currently are in Costa Rica some 1.300 companies, local and international, in the information technology services field.
Unexpected shocks that roiled global markets also took their toll in the latest CompTIA IT Industry Business Confidence Index, but information technology (IT) industry executives still expect business conditions to improve and sales growth to resume in 2011.
The CompTIA IT Industry Business Confidence Index fell by 5.1 percentage points in Q2, to 54.9 on a 100-point scale. IT industry confidence was shaken by the same events that affected other segments of the economy – natural disasters in Japan, unrest in the Middle East and rising prices in a number of areas, especially oil prices.
Looking ahead, IT industry executives expect the recent bout of uncertainty to abate and sales growth to resume. The CompTIA IT Industry Business Confidence Index is projected to increase 5.2 percentage points over the next two quarters, making up the ground lost in the Q2 reading.
Despite the Q2 dip, IT industry sentiment is still on solid footing. The latest reading exceeds confidence levels for most of 2010.
“Confidence levels about the industry as a whole and about individual companies continue to reflect optimism in a strengthening economy,” said Tim Herbert, vice president, research, CompTIA. “The net positive for the industry now stands at 62 percent, and for individual companies at 64 percent. Not long ago both figures were closer to 50 percent.”
Another positive sign – hiring intent continues to move upward, increasing 2 percentage points to a Q2 rating of 42 percent.
“Hiring is a good indicator of confidence and positive economic momentum,” Herbert said. “Only firms with solid business prospects are willing and able to expand their headcount.”
The CompTIA IT Industry Business Confidence Index is comprised of three metrics: opinions of the US economy, opinions of the IT industry and opinions of one’s company. While the economy component of the Index continues to drag on the overall reading, that trend may be turning around, according to Herbert.
“The gap between the performance of the overall economy and IT industry appears to be closing slightly, which should be viewed positively by IT industry executives,” he said.
Another gap in index results that’s narrowing is the confidence level of small IT businesses compared to their larger counterparts. Throughout the history of the Index, the smallest IT firms (under $1 million in annual revenue) lagged behind medium-sized and larger firms in business confidence.
“This difference has narrowed, however, a sign that the recovery has boosted prospects for businesses of all sizes,” Herbert said.
Among all firms surveyed, the average revenue growth rate expectation for 2011 is 13 percent. The majority of companies will stay in their comfort zone to achieve that goal. Roughly three-fourths will turn to existing customers or new customers within the same vertical market for growth. A minority of firms (20 percent) plan to seek out growth in new vertical markets.
Expenditures by IT firms in many categories will increase or hold steady. Compared to the Q1 Index, some firms will slow the rate of increases in investments in new technology, new business lines and marketing/advertising initiatives.
“This may be a situation where firms committed to the expenditures during Q1 and are now at the point of execution or waiting to see the return on investment,” said Herbert.
On the challenges to growth front, IT industry executives voiced concern over the impact of new, unexpected shocks to the economy. This rating increased 9 percentage points from Q1, rising to a concern rate of 41 percent. Offsetting this negative, a number of other concerns subsided, including weak consumer demand, government regulation, competition from international firms and labor prices and availability. The CompTIA IT Industry Business Confidence Index is based on an online survey fielded to IT industry executives and professionals in late March 2011. A total of 395 IT companies participated.
CPAs expressed their highest level of optimism on the US economy since the third quarter of 2007, according to the latest AICPA/UNC Quarterly Economic Outlook Survey. This upbeat assessment follows a modest outlook last quarter. In addition, there was a slight improvement in expectations for hiring and an uptick in plans for capital spending for IT and other areas over the next 12 months. On the broader level, there was concern about inflation.
Forty eight percent of CPAs serving in executive positions expressed optimism about the US economy in the first quarter, up 20 percentage points from 28 percent who were optimistic in the fourth quarter. Companies with current hiring plans rose by three percentage points to 13 percent. All industries expect to increase hiring in 2011, with the average expected increase in number of employees rising to 1.5 percent, compared to .6 percent in Q4 2010.
Fifty-seven percent of survey respondents are now optimistic or very optimistic about the prospects for their own companies. Sixty six percent of respondents expect their businesses to expand during the next 12 months. The technology sector is leading the way with an expected headcount increase in 2011 of 4.4 percent.
Up 21 percentage points since from the last quarter, 55 percent of respondents expressed concern about inflation. Thirty six percent of respondents indicated concern about rising material costs, while 18 percent are concerned with an increase to energy prices. However, 47 percent do not expect to pass increased costs onto customers during the next quarter.
According to a survey by accounting consultancy BDO USA, nearly half of top US technology companies surveyed plan to increase employee headcount in 2011. Just 7 percent expect headcount to decrease, marking a significant sign of confidence in the sector. The survey examined the opinions of CFOs at 100 leading US technology companies.
In addition to growth, scalability is also a high priority for CFOs in 2011. Nearly three quarters (72%) of CFOs note that they are currently using cloud computing. The reasons ranged from improved business agility (33%), increased scalability (33%) and cost flexibility (28%). The number of tech companies using cloud computing represents a 29 percent increase from 2010. Among cloud adopters, 55 percent expect to increase use in 2011 – a 53 percent growth over 2010.
“Technology companies have switched gears from survival to growth mode,” said Hank Galligan, leader in the Technology and Life Sciences Practice at BDO USA. “The flexibility and scalability of cloud computing created cost-effective infrastructures that allowed adopters to weather the recession and emerge ahead of the curve. These forward-thinking companies are now giving the green light to new initiatives, and plan to devote resources to attracting and retaining top talent.”
Although cloud use is on the rise for the majority of companies, 28 percent of CFOs note that they have steered clear of the technology altogether. When asked the primary reasons for their decision to not use cloud computing, CFOs equally point to three major concerns: security issues (29%, down from 39% in 2010), the hassle and expense of shifting to the cloud (29%) and limited application features (29%). “Despite major strides taken to increase cloud computing security in the past few year, it’s clear that some companies are wary of the change,” said Galligan.
With growth a key strategy for 2011, nearly half (48%) of tech CFOs say they expect to hire the most new employees in their sales and marketing divisions. Other areas expected to see additional hires include research & development (22%), manufacturing (17%), and administration (7%).
With the cleantech sector emerging into the mainstream, 35 percent of CFOs say it will require the most innovative technologies in 2011. Healthcare and biotech follow closely (33%) amid industry changes and opportunities for greater efficiencies. Other sectors requiring more innovation include financial services (9%), oil & gas (8%), retail (7%) and construction/manufacturing (7%).
Employers are inclined to rely more heavily on professional certifications when hiring information technology workers, but are challenged by credential evaluation and validation issues, according to research from CompTIA.
Professional certifications are already viewed by hiring managers as a high-value validation of IT skills. The CompTIA study suggests certifications will grow in importance as organizations seek to fill tech jobs.
Among IT hiring managers, nearly two-thirds (64 percent) rate IT certifications as having extremely high or high value in validating skills and expertise. Eight in 10 human resources (HR) professionals surveyed believe IT certifications will grow in usefulness and importance over the next two years.
But employers also expressed concerns about some aspects of using IT certifications in the hiring process. There is a perception among some hiring IT managers that the HR department does not have a solid understanding of IT certifications. Some firms also said verifying a job candidate’s credentials can be a challenge due to the time involved (cited by 44 percent of hiring IT managers) and effort required (38 percent).
“The value of certifications can be enhanced in a numbers of ways,” noted Tim Herbert, vice president, research, CompTIA. “Stronger links with education; easier methods of verification; greater understanding of what IT certifications can and cannot do; and more organizational support for certifications as part of a professional development program all would be positive steps in this direction.”
Nearly 1,700 business, HR, and IT executives participated in the survey, designed to gain insight into how they evaluate job candidates; the role of IT certifications in the hiring process; and how organizations support professionals’ development.
Experience, track record, and accomplishments rank as the most important factors when evaluating job candidates, according to the study. But education and credentials such as certifications also rank high. For example, 86 percent of hiring managers indicate IT certifications are a high or medium priority during the candidate evaluation process.
“From the employer’s perspective, top benefits of IT certification are validation of an individual’s ability to understand new or complex technologies, higher productivity and more insightful problem solving,” said Herbert.
The study suggests that certifications will become even more important as employers struggle to find individuals to fill job openings. Despite a virtual buyer’s market for hiring, roughly eight in ten HR executives in the United States said it’s challenging to find the right candidate with the right skill set to fill their openings. Many IT managers in the study share a similar view. For certain positions, the pool of available talent is not as deep as they would like it to be.
“Now more than ever there’s little margin for error for making a bad hire,” Herbert said. “In an environment of needing to do more with less, organizations cannot afford the time and cost of bringing on a new employee who cannot contribute immediately.”
The CompTIA study of two separate online surveys: to 1,385 business and IT executives that made a recent IT hiring decision in the United States, United Kingdom and South Africa; and to 300 HR professionals in the US.
Following a strong 2010, IT employment continued its pattern of month-over-month growth by adding more than 6,000 jobs in January.
According to TechServe Alliance's monthly index of IT jobs, in January, IT employment stood at 3,997,400 jobs; reflecting incremental growth of 0.2 percent, while overall non-farm employment only rose by 0.03 percent. On a year-over-year basis, IT employment was up 4.5 percent, compared to only a 0.8 percent increase in total non-farm employment.
"With January’s strong IT employment numbers, 2011 is off to a good start. With increaseddemand, we are again hearing of shortages of qualified IT professionals in certain skill sets,”said Mark Roberts, CEO of TechServe Alliance. “We continue to maintain a very bullish outlook for IT employment in 2011."
TechServe Alliance counted nearly 1.5 million jobs in computer systems and design services, up 0.6 percent from the previous month and 3.5 percent from January 2010. The 878,700 telecom jobs reflected a more than 5 percent decline from January 2010 and a 2.44 percent drop from December. The 239,400 data processing, hosting, and related services jobs, meanwhile, registered a 0.79 percent drop over December and a 2.44 percent decline from January 2010.
US employment numbers released by the Department of Labor's Bureau of Statistics (BLS) shows a net gain of 9,600 in IT-related jobs in December, representing the seventh straight month of positive job growth in IT labor segments in federal employment data, eJobDescription reports.
Key IT job segments in the BLS data showed a net gain of 45,800 jobs in the last six months of 2010 and 26,000 jobs in October through December. Leading all segments were gains in management and technical consulting services and computer systems design and related services segments, which accounted for 89 percent and 85 percent, respectively, of all new jobs created.
Jobs in the data processing, hosting and related services segment added 200 jobs in December, the worst performing segment in the month. Two job segments in the computer and electronics products industry category added jobs: communications equipment (+500 jobs) and computer and peripheral equipment (+700 jobs).
"The services industry has been on a steady roll since last March; in fact, nearly 95 percent of all new IT-related jobs created since March - 54,600 of 56,000 jobs according to federal job loss data - were recorded in the management and technical consulting services and computer systems design and related services segments," said Victor Janulaitis, CEO and chief research officer at IT research firm Janco Associates. "I don't want to overemphasize CIOs' dependency on contractors, consultants and managed services; indeed, they're also making key hires in many areas. But it's clear that demand for full-time workers outside the services sector has yet to experience the kind of momentum witnessed in services jobs."
Layoffs are tapering off and IT compensation and hiring are recovering, according to the latest semiannual salary survey from Janco Associates and eJobDescription.com
The total mean compensation for all IT professionals has increased modestly by 0.35 percent to US $77,873 from $77,604 in the past year, returning overall compensation to January 2008 levels. Middle managers and non-line IT executives continue to feel a salary crunch, however.
The survey shows that midsized enterprises are starting to hire staff workers, with salaries in the IT sector increasing the most. Mean compensation of $61,924 is up 1.44 percent from $61,047 a year ago.
Among other results:
The Janco Associates salary survey draws on data collected throughout the year by extensive interviews, internet-based survey data, and survey forms completed by businesses throughout the United States and Canada.