• 06/25/2014
    7:00 AM
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IT Hiring Climbs Despite The Cloud

Computer Economics survey indicates that many organizations expect to expand their IT staffs this year, but IT capital budgets remain flat.

At a time when companies have abundant reasons to keep IT staffs lean, a new survey shows that IT hiring may be shedding years of stagnancy.

In its annual "IT Spending and Staffing Benchmarks" study, for which 200 IT organizations in the US and Canada were surveyed, IT research firm Computer Economics found that IT staffs at the median will grow by 1% this year. In other words, half of the companies surveyed say their IT staffs will grow by more than 1%. Leading the way are financial services firms and healthcare providers, which expect IT staffs to grow 5% and 3.9%, respectively.

Given that IT leaders entered 2014 with lowered expectations after a somewhat tepid 2013, and that increased adoption of cloud computing would appear to reduce IT staffing needs in a number of areas, the staffing increase is a positive sign for a sector that hasn't seen job growth since before the Great Recession.

Especially encouraging are the indications that the growth appears to be more sustainable trend than temporary surge, John Longwell, VP of research at Computer Economics, said via email.

"I think the hiring, especially among larger companies, reflects confidence in the sustainability of the recovery and a recognition that they need to bring on staff to support operations," Longwell said. "We are not seeing a large or dramatic increase, but we are seeing steady improvement."

That IT organizations need more staff to support operations was clear from another survey finding: More than two-thirds (67%) of surveyed organizations say their IT operations budgets have increased, up from 61% the previous year.

Conversely, IT capital budgets are expected to be flat at the median, with an even split between companies that are increasing their IT capital spending and those that are shrinking it. While it would be easy to attribute the growing emphasis on operations to cloud adoption, and the reduced need for IT infrastructure that results, Longwell says the impact of the cloud on capital spending will develop more gradually than the current trend is unfolding.

"IT organizations are still managing a lot of infrastructure and on-premises systems and they need to keep investing in that infrastructure and those systems. While the disruptive influence of cloud computing may partly explain the pause in the capital spending growth, we think there have to be other, more short-term explanations at work."

Oddly enough, one of the survey's most positive indicators is a finding that, at first blush, appears anything but. More than half of respondents (53%) say that their IT operational budgets are inadequate to support the business, with 10% describing their operational budgets as "very inadequate."

"This is an interesting metric because it is somewhat counterintuitive," says Longwell. "At the start of the recession, when IT executives were being asked to cut their budgets, they were actually more positive about the adequacy of their budgets. Now that the business climate is improving, they are feeling pressure to deliver more services, and their current budgets seem inadequate to support the growth.

"So the dissatisfaction level signals a willingness to lobby for more spending on IT. This is an indicator that business leaders are under pressure to increase IT spending."

Translation: The more IT leaders feel they're being shortchanged, the more optimistic their organizations should feel about the future.


sustainable growth

I sure hope Computer Economics is right in viewing this growth as a sustainable trend rather than a temporary surge. Do these survey results reflect what readers are seeing?

Cloud influence

I think it will be 5 years or so before you start seeing the IT budgets being influenced by the cloud. Even that is a guess really. There are still many security concerns out there. I think companies have started using the cloud but not completely. I don't think you will see an impact on budget numbers until the cloud is used a lot more.

Re: Cloud influence

You're right about the cloud security concerns Paul. It seems that every survey on cloud adoption shows security concerns as the No. 1 barrier.

Re: Cloud influence

As the economy recovers, the demand for services will increase and this causes an increase in the demand for IT functions. If firms are vary of the Cloud and decide to build in-house capability -- the number of IT professionals in employment will increase. If firms are comfortable with the Cloud, and build their capabilities in the Cloud -- the number of IT professional in employment will still increase. Overall, the net result in the economy as a whole would be positive. 

Re: Cloud influence
I think Brian is right -- there is really nowhere to go but up. Businesses are increasingly relying on technology of all sorts to operate, and they will need people to manage it. Where those people work might shift around a little, but it has to increase when you look at the devices an data going online.
Re: Cloud influence

True, businesses are relying on technology more than ever. An argument also could be made that cloud computing commoditizes IT so that more can be done with less.

Re: Cloud influence

Yeah, people do make that argument, but when you think about all of the everyday boring things that happen over a network today, and all of the things that are becomiong networked with IoT, I think the need for technologists will still outpace the efficiencies.

Re: Cloud influence

I think you will see a shift in where IT people are needed. If /when more go to the cloud exclusivly they may not need as many IT staff but the cloud providors will need more. It's a theory anyway.

Re: Cloud influence

@Marcia: Depends on the provider/solution.  IBM, for instance, would beg to differ with you that their cloud-based data solutions (Cognos, SPSS, Watson-as-a-Service, etc.) are commodities.  They recently toured a multi-city summit to spread this very message -- that their cloud-based data analytics and data visualization tools are unique, whereas other solutions are commodities.  And, seeing what they have to offer, it can be hard to argue.

But on the other hand, when I asked one of their representatives how Cognos was different, in any meaningful way, from SharePoint analytics tools, he didn't give much of a satisfactory answer.

So maybe you're right.  ;)

Re: Cloud influence

Indeed, Susan, OF COURSE IT hiring is increasing--because of -- NOT despite of -- the cloud.  You have a service that is useful but has been overhyped for years, it's still developing, and departments (such as marketing) are turning to cloud solutions as "shadow IT" (sometimes without tacit approval -- or even knowledge -- of their own IT departments).  Security issues still abound -- and they are increasing as collaboration and IoT technologies improve and spread.

OF COURSE you need more IT administrators and architects and developers and engineers to handle all of this.

The only real question, in my mind, is the impact this has not on the IT Department as a whole, but on the CIO.

Re: Cloud influence

Right, so the question really is; Will infrastructure professionals be able to find similar jobs in otehr organizations if they suddenly find themselves unnecessary in their current role? Or are things changing so much that all the jobs are changing dramatically as well, and everyone needs to re-invent themselves in some way?

Re: Cloud influence

Depending on your current role, it seems some degree of re-invention will be necessary with everything changing so fast. And that will probably be a lot of people.

Re: Cloud influence

@Susan: You hit the nail on the head.  It is all about reinventing oneself.  You're not an IT Architect.  You're an IT Cloud Integrator.

Reminds me of a conversation I had with a friend recently who was lamenting her husband's luck in finding a new job as a data analyst.

My immediate response: He needs to rebrand himself as a "data scientist."

Re: Cloud influence
I think Brian is right -- there is really nowhere to go but up. Businesses are increasingly relying on technology of all sorts to operate, and they will need people to manage it. Where those people work might shift around a little, but it has to increase when you look at the devices an data going online.