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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.

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