EU

IT job cuts: Is the end finally in sight?

A poll of IT chiefs' views on hiring and budgets picks out a whiff of change in the jobs climate.

The unrelenting squeeze on IT headcount could be easing, with the number of IT directors expecting to cut jobs again this year at its lowest level for five years.

Only one IT director in 10 is expecting to prune jobs in 2013, half 2012's number, according to a new study.

The fall in the percentage anticipating cuts is unlikely to be because IT staffing is already at minimum levels, according Michael Bennett, director of ReThink Recruitment, which conducted the research.

"I don't think it's absolutely down to bare bones. Clearly, it depends on the organisation and the sector. Some will say we're down to bare bones in banks probably - they've not been hiring. But I don't think it's completely that," Bennett said.

"If you're in IT, it's actually been a relatively safe place to be in the past five years. There weren't mass redundancies - we saw some, we saw a reduction in contractor usage during the main part of the recession," he said.

"Retailers are struggling in terms of performance but the investments they're making are very technology-driven. Some [organisations] will be down to bare bones but others have kept hiring."

Increase in business confidence

Further signs of a possible change in the jobs climate are found in the figures for headcount growth over the next 12 months. Some 46 per cent of IT directors are expecting to see a rise this year, compared with 36 per cent in 2011.

Taken with a few small positive indicators in the economy, despite unresolved issues particularly in Europe, the figures give grounds for cautious optimism, Bennett said.

"I'd be very surprised if IT recruitment levels and IT declined further - but would I put my house on it? Probably not," he said.

Because IT is core to business, those working in the sector tend to feel the immediate benefit of any increase in business confidence. "As soon as business leaders start feeling a bit more confident, the trickle-down effect does usually impact IT in a healthy way," he said.

Fewer IT budget cuts

The survey of UK IT directors also showed fewer expecting to make budget cuts this year: 25 per cent in 2013 compared with 36 per cent last year. Equally, those IT leaders expecting departmental budgets to rise are up from 39 per cent in 2012 to 48 per cent this year.

However, the more positive picture on hiring and budgets is doing little to dispel concerns about skills and staffing costs. Some 87 per cent of the IT directors surveyed are worried about being able to find candidates with the right skills, and 83 per cent are worried about retaining staff.

Two-thirds of the respondents are expecting pay to rise this year, against a figure of 59 per cent last year and 47 per cent in 2011.

About

Toby Wolpe is a senior reporter at TechRepublic in London. He started in technology journalism when the Apple II was state of the art.

24 comments
stepd0
stepd0

The headcount may stay the same, but will these be offshored? I'm not seeing that trend stopping anytime soon.

TRgscratch
TRgscratch

"BYOD means no more IT required" "Cloud means no more IT required" ?

cheth
cheth

The future is bright. There will be jobs. Although many have lost their jobs to the down turn in the economy, demand for talent is only going to rise. The number of people choosing IT as a career is definitely on the decline or at least flat. Those in IT are retiring or in some cases leaving for other careers. How can demand not go up? Employers will have to work with colleges to encourage students to go into IT. In addition employers may need to consider in-house training, because existing employees have key business knowledge that applies to solving IT problems. Outsourcing IT can only go so far to helping businesses cope for the lack of IT skills. Business must look beyond the easy solutions and work with potential employees. They can not expect to find the perfect fit every time they post a job. Employees must have the basic skills or at least some proven ability to fit into the IT world.

sng - TX
sng - TX

I would prefer that the Business invest in the incumbent folk and train them to make up skill shortages. This has been going on for years: downturn, lay off people who lack skills, upturn, hire new skills while lamenting on shortage of new skills. Why not take the long view and invest in employees - make it a partnership? This is not just IT, but all business.

Ed.Pilling
Ed.Pilling

IT has been slashed so much over the years. They did the out sourcing and what they couldn’t out source they brought in H1b’s. Many places I have interviewed with have hinted that the work week is more then 40 hours.

jkameleon
jkameleon

We are constantly being told that IT professionals are in high demand despite of crisis, that there is acute and chronic impending talent shortage, crisis, crunch, and whatnot. Now- where did these job cuts came all of the sudden?

Dylan Teo
Dylan Teo

"Because IT is core to business, those working in the sector tend to feel the immediate benefit of any increase in business confidence." This statement is very true but all other functions in the business does not make IT feel core rather 2nd class citizens. IT put in alot of after hours support to keep even support BU running. Business laments that IT has a high turn over rate. Irregardless of bad times, employers really need to change their view about IT. It is no longer a support function but a core critical part that makes business run.

pgm554
pgm554

Then why are the most senior and experienced the first jobs on the chopping block? Doesn't make much sense does it?

nat.hansen
nat.hansen

This is not the first time someone at TechRepublic has written an article about the kulling of IT. It's starting to sound as though each article written is intended to confirm thr death of IT, which is ironic given that TechRepublic kind of relies on the industry. Let's kill off IT in house, move to the cloud immediately giving all the control to some call centre that neither cares or knows the business operations and completely destroy end user confidence and service and possibly even have this reflect on the way the end users ultimately respond to the businesses real customers. Sorry for the rant but would rather read about new Tech insight than kulling.

vikingkeith
vikingkeith

I wouldn't count on this. There are many security concerns with clouds that have yet to be fully played out. BYOD has holes too. As I note in my subject line they use to trumpet the paperless office, yet printer manufacturers are still in business. Never trust absolutist theories of IT. They smack too much of Utopianism.

andrew232006
andrew232006

Most wouldn't be able to work after the PC and laptop go away anyway.

n.gurr
n.gurr

All the outsourcing means that there is, at least in the UK, a shortage of entry level positions so there are no skilled staff coming through. Apparently it is a good time to be in IT here, mind you my pay rise was back dated 5 months and came to all of £20!

jsargent
jsargent

Don't forget that H1b's are not normally used in IT to get cheap workers but are normally because they can't find enough people in the local work-force who have the qualifications to do the job. IT is not fruit-picking.

the_tech_mule
the_tech_mule

While I agree that business tends to make IT 2nd class, I don't think many IT folks do much to help the situation. They see IT as the godsend to companies and expect to be treated that way. So often, they fail to understand the business and the business needs. It's definitely a two way street.

Dylan Teo
Dylan Teo

Cos to the top management who are mostly sales folks they see numbers and baseline. They don't care the operational issues and deem IT as redundant and frequently overtrim IT until business suffers. Which is why my comment IT is always viewed by business as 2nd class citizen when we are critical to business activities.

n.gurr
n.gurr

These so called Journalists/writers like to sit on their office chair and reflect on things they have read on the internet mostly. They are not working in organisational IT, I know Bill Detwiler and Jack Wallen do to some extent along with one or two others do as consultants but they do not represent me tbh. We could do with more human interest pieces, what is it like to do IT in extreme circumstance ie Army IT in Afgan, Oil drilling rigs etc or just really different environments such as the Automotive design etc.... Edited to include Toni as she works in an educational setting which is somewhat similar to me, although I bet she doesn't her college doesn't have an 8/10th scale Darlek designed to put out fires .....!

Dylan Teo
Dylan Teo

The diease is not IT or IT folks but the industry and wrong perception given by vendors. Many ignorant folks still think IT can replace human and IT can be automated to such that they don't need IT folks. Without IT, current business model, cannot generate revenue unless all people go back to pencil and paper. I think many forgotten how to write given the paper and pencil.

the_tech_mule
the_tech_mule

When we hired an H1B it was because he was the absolute best candidate in our region. He moved 250 miles to work here and did it all on his dime. Yes, we have a tendency to underpay but there was just so little talent in our area for what we needed. We didn't advertise salary at all and still got very few candidates even close to being qualified.

henryb
henryb

"they can't find enough people in the local work-force who have the qualifications" I guarantee if they pay a nationally competitive wage, they will attract the talent they need. A flood of H1Bs are going to bring the wages down for everyone. Business lobyists are pushing congress to up the number of H1Bs allowed in this country. This article suggests there are IT workers that are out of work due to recent economic factors. Do we really need outside workers, or does business just want cheaper workers?

nat.hansen
nat.hansen

But reslistically who feels more love out of the relationship? By all means IT is a cost centre, but in this day and age, take away the staff that know how to properly run the cost centre and I guarantee you that the consequences spread to the rest of the business like wild fire. Trust me, I've seen it happen with one or two poor "business decisions" made in my time.

Tony Hopkinson
Tony Hopkinson

compared to the business types who see it as a one way street. The number of IT people who don't think buiness need overrides technical who have power in IT and or business. Don't have to take your mittens off to count them...

jsargent
jsargent

Where's the problem here? That's the problem with the economy. Some H1B guy moved 250 miles within the USA. You can move 250 miles to find a better paid job....if you have the qualifications and you don't even need an H1B.

vikingkeith
vikingkeith

It isn't skills that corporations are interested in -- it is getting skilled people cheap. They put out an ad looking for impossible sets of qualifications. When they don't get people that match these qualifications they ask the Government to allow them to recruit overseas. The people the corporation brings in don't fully match the qualifications either except that they claim they do (Not a lie from a corporation). Check out outfits like GE Healthcare. They do this regularly and they don't get called on it. The oversight for these H1Bs needs to be stepped up. Corporations want skilled people make an investment in training or pay more. This is just a higher level of busting a higher skill labor market. If we were working on a line in a car factory they would bring in scabs. Same thing. IT may not need a union in the US but we could certainly use a trade guild to push back against corporations.

spdblp
spdblp

You underpay, and some H1B guy moves 250 miles to take the job. This tells everybody where the problem is.