A continuing weak economy and budget insecurities are prompting a majority of IT shops to keep staff hiring at a minimum at the start of 2002, with just 15 percent reporting that they plan to add IT staff, according to recent surveys.

A majority of CIOs expect a slowdown in hiring in the first quarter of 2002, reports RHI Consulting, a Menlo Park, CA-based research firm. RHI’s recently released Information Technology Hiring Index surveyed 1,400 CIOs from a random sampling of U.S. companies with 100 or more employees. It was conducted by an independent research firm and compiled by RHI.

The results align with a TechRepublic poll conducted in Nov. 2001. In the online poll, 79 percent of the respondents reported that they didn’t expect any increase in hiring in 4Q over 3Q. Eleven percent projected that they would increase hiring at a rate of less than 15 percent in 4Q, and only 10 percent of TR respondents indicated they planned to increase hiring 15 percent or more.

“IT hiring continues to be negatively impacted by the weakening economy,” said Katherine Spencer Lee, RHI’s executive director, adding that many CIOs have gone through the budgeting process and are waiting to see what happens with the economy. Lee predicts increased staffing if the economy turns around sooner than expected, which should prompt CIOs to feel more comfortable to move ahead on additional projects.

“A growing number of businesses are keeping technology spending to a minimum until they see signs of a recovery,” she said.

Demand depends on region
But decreased hiring isn’t the case everywhere. According to the RHI survey, which details regional hiring trends, the Mountain states (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming) will be leading in hiring activity, with 24 percent of CIOs planing to add staff and only 4 percent expecting personnel reductions.

“Businesses continue to thrive in the region’s diversified economy. As a result, there is demand for network administrators, desktop support specialists, and database developers to support growing IT infrastructures,” explained Lee.

CIOs in the East South Central (Alabama, Kentucky, Mississippi, and Tennessee) and West South Central (Arkansas, Louisiana, Oklahoma, and Texas) states also anticipate solid employment gains, with a net 15 percent hiring increase forecast in each region. The South Atlantic states (Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, Washington, D.C., and West Virginia) also expect hiring activity above the national average, with a net 12 percent increase in hiring activity projected.

“I think a lot of it has to do with looking at a particular region and seeing what types of industries are dominant in that particular area. Those industries that have not been as impacted by a weakening economy can continue to be kind of a leader,” said Lee.

Business strategies impact talent needs
Hiring expectations also fluctuate with regard to business sectors. CIOs in the finance, insurance, and real-estate sectors are the most optimistic about hiring activity during the first quarter, as 22 percent expect to add staff, and only 3 percent expect reductions, according to RHI.

“Interest-rate cuts and refinancing activity have spurred job growth in the mortgage and financial services industries,” explained Lee.

CIOs in the professional services and retail industries also anticipate growth above the national average, with respective net hiring increases of 17 percent and 13 percent.

Network security is one area of staffing growth, according to RHI, as many companies are moving to bring more applications onto intranets. Plus, many firms are still building or enhancing intranet developments.

“We are seeing companies spend money on network securities to protect their client data and also to protect their internal data,” said Lee.

Another expertise growth area is in databases.

“We are starting to hear more and more companies use terminology like data maximization,” said Lee, explaining that companies are looking for ways to use data to gain repeat business or to capture new business.

“The projects are no longer [focused on] ‘bells and whistles,’” she said. Instead, the main interest seems to be more about how information technology can save time, save money, and increase revenue.

Some talent demand still strong
Within the stronger specialty sectors, certain IT professionals have a better chance of getting hired this year, according to RHI. Lee says demand remains strong for techies who can implement and support technologies designed to improve productivity and efficiency, ultimately resulting in cost savings for firms.

CIOs are also seeking staff with soft skills in addition to technical skills. CIOs are asking how well the potential IT employees can explain and execute quantifiable benefits, explained Lee.

“Professionals whose work history includes demonstrated contributions to the bottom line are marketable in today’s environment,” she said.

“People who are actually getting jobs today are the people who can translate how information technology can actually help an organization meet its strategic objective.”

What’s impacting your hiring plans?

If you’re looking for staff, what specific specialty or talent do you need this year? If staff reductions are planned, what’s the main culprit? Write and tell us so we can share it with our members or start a discussion below.