Current IT Hiring Limited to Replacing Employees (in the US)

astorrsastorrs Posts: 3,139Member ■■■■■■□□□□
Current IT Hiring Limited to Replacing Employees
June 24, 2008 • by Stephen Swoyer

No one seems to know whether we're in the midst of a minor economic bump in the road, an economic downturn, or an all-out recession. However, if IT salaries are any indication, employers seem to be hedging their bets.

According to salary researcher Janco Associates Inc., IT compensation growth is more or less flat, while IT hiring is primarily limited to plugging gaps (e.g., hiring replacements). Moreover, shops are also cutting back on -- or in some cases eliminating -- discretionary spending.

Janco collects its salary survey data every six months. Six months ago, its look at the pulse of IT salaries and compensation showed that things didn't appear so dire. After Q1, however, companies cut back dramatically on IT spending, Janco officials said.

"As we collected compensation data for our mid-year 2008 IT Salary Survey, we found that at the end of the first quarter, businesses turned off the faucet for IT spending," said Janco CEO Victor Janulaitis in a statement. "Many businesses, in response to economic projections, slowed down and halted discretionary spending for software and hardware as well as placed hiring requisitions on a slow track."

Elsewhere, Janco found plenty to cause alarm. Consider hiring demand, which is a good indicator of IT growth. Today we're seeing IT stagnation: According to the Janco survey, companies are now hiring fewer new employees than at any time since 2004. Many shops have all but stopped hiring (with the exception of filling replacement positions), while those that are bringing on new employees are doing so at lower salary levels.

Discretionary spending is likewise off, which -- in the current economic climate -- is increasingly endangered. Many companies have eliminated IT discretionary spending altogether, and the vast majority of firms seem to have at least reigned in their spending ambitions.

The upshot, Janco reported, is that companies are initiating fewer projects, cutting back on (and in some cases eliminating) the use of outside consulting or integration services, and slowing down (if not halting) projects that were already in the pipeline.

Furthermore, according to the Janco report, the average 12-month increase in compensation for most IT pros was outstripped by the rising cost of living.

IT pros who've fled to the notionally safe harbor of technologies such as Web 2.0 might want to look again. According to the Janco report, specialties such as Web 2.0 development -- which were in high demand in Q4 of last year -- are now only seeing average demand. Meanwhile, companies are starting to look at which IT administrative positions are expendable.

The Janco report is more pessimistic than a recent survey from IT staffing specialist Robert Half Technology, which projected a net 10 percent hiring increase in Q3 of 2008. Robert Half's findings are based on a quarterly survey of about 1,400 North American CIOs. Its latest projections are slightly down from the net 12 percent increase it predicted for Q2, but still well ahead of Janco's finding of a stagnant hiring situation.

Even Robert Half alluded to a prevailing wariness among CIOs, however. "While the forecast remains strong overall, a more cautious hiring climate prevails," said Katherine Spencer Lee, executive director of Robert Half Technology, in a statement. "Employers want to ensure business demands support full-time staff additions. Shorter-term initiatives are being completed on a project basis in some instances."

According to the Robert Half survey, larger companies are more optimistic about boosting staffing levels: 20 of CIOs at firms with 1,000 or more employees anticipate hiring expansion, while just 6 percent envision cutbacks.

Source: http://redmondmag.com/news/article.asp?EditorialsID=9995

Comments

  • AldurAldur Juniper Moderator Posts: 1,460Member
    well thats not encouraging now is it.
    "Bribe is such an ugly word. I prefer extortion. The X makes it sound cool."

    -Bender
  • astorrsastorrs Posts: 3,139Member ■■■■■■□□□□
    Aldur wrote:
    well thats not encouraging now is it.
    No it's not good for anyone (except maybe the company accountants), but given all the recent posts about people having trouble finding a job I thought I should post it.
  • TalicTalic Posts: 423Member
    astorrs wrote:
    Aldur wrote:
    well thats not encouraging now is it.
    No it's not good for anyone (except maybe the company accountants), but given all the recent posts about people having trouble finding a job I thought I should post it.

    To make us feel worse?

    <sarcasm>

    Thanks for the info, that could explain why people are getting fussy about the baby boomer replacement, the type of people that are asking for like a decade of experience and tons of certs. I look at it this way though, at least I have enough sense to know I have to work my way up. Just wish I would have a chance to start to...

    Going to a job fair tomorrow so I have something to look forward to.
  • astorrsastorrs Posts: 3,139Member ■■■■■■□□□□
    Good luck tomorrow!

    (I was hoping the post might make everyone - myself included - more aware of the current situation you guys are facing and hopefully a little more sympathetic).
  • darkerosxxdarkerosxx Posts: 1,343Banned
    Yeah the stuff I'm reading shows that in 5-10 years, IT will be back where it was as baby boomer's go out faster than recruits go in. Rate of hire, salary, and retention will increase and actually will not be able to keep up with the amount of people leaving the business.
  • jryantechjryantech Posts: 623Member
    Oh boy, this is really good news for me :D

    (The whole IT will be strong in 5-10 years)
    "It's Microsoft versus mankind with Microsoft having only a slight lead."
    -Larry Ellison, CEO, Oracle

    Studying: SCJA
    Occupation: Information Systems Technician
  • Vassago68Vassago68 Posts: 49Member ■■□□□□□□□□
    Same for me since I have 3 years left in the Military.
  • eMeSeMeS Posts: 1,875Member
    I know of at least one company in financial services that has a hiring freeze in place. They are also about to give annual raises and my understanding is that most of their employees are getting a 0% raise....

    This company regularly posts a 20%+ profit year over year...IMO giving a 0% raise when it now costs people twice as much to drive to work as it did 1 year ago is a bit greedy in light of sustained and continuing profits....It doesn't really communicate the whole "we're in this together message".

    The likely effect is that those employees that are qualified will quickly find better work and will leave. Upon losing their best employees, they will likely experience increased systems outages, reduced IT service quality, and delayed time to market. This all generally results in a loss of external customers.....

    I can think of no better support for my belief that to be eligible for the best work one must be qualified and credentialed in the top 5-10% of your particular specialty.....Those that aren't will have to put up with crap like the example above...those that are will have their pick of opportunities in both good and bad economies...

    MS
  • AldurAldur Juniper Moderator Posts: 1,460Member
    eMeS wrote:
    This company regularly posts a 20%+ profit year over year...IMO giving a 0% raise when it now costs people twice as much to drive to work as it did 1 year ago is a bit greedy in light of sustained and continuing profits....It doesn't really communicate the whole "we're in this together message".

    I really really don't understand this concept that many companies have. Does it all boil down to greed?? Because of thats the case then its a very short sighted greed. Companies who do that to their employee's end up having high turn over rates which in turn weakens the company's core. If no one is happy to work for a company then sooner then later they will have no skilled employees.


    To the whole 5 to 10 year IT turn around, I say hell ya, I just got into IT a year ago and so in 5 or so years I should have a fairly good skill set, and then I can really ask for the good money since skilled IT people will be needed.
    "Bribe is such an ugly word. I prefer extortion. The X makes it sound cool."

    -Bender
  • eMeSeMeS Posts: 1,875Member
    Aldur wrote:
    Does it all boil down to greed??

    Yes.

    Everyone wants something for nothing, but eventually the bill comes due. The bill is a loss of customers and revenue because their systems suck because they lost their best people. Additionally, they get an industry rep as being a crappy place to work...

    There are many in my line of work that advise companies to do exactly this sort of thing, with little regard for the long-term consequences. Those at the top making these decisions are unlikely to ever be held accountable for the results (or lack of the same) because they will have moved on to other areas in order to amplify their ability to screw things up...

    MS
  • jbaellojbaello Posts: 1,192Member
    Oh my it's bad news everywhere...
  • undomielundomiel Posts: 2,818Member
    Bad management like that is happening all over as well. Where my wife works they just switched CEOs for the Phoenix office. The previous CEO was pushing for the Best Workplace award for Phoenix. Well corporate came down because earnings weren't doing so well. New CEO is now all business 100%. He's basically told everyone that he doesn't care about them, corporate doesn't care about them, and if the bottom line isn't improved then they're gone. Lots of churn happening now. Plus my wife's department is woefully understaffed and they won't lift a finger to remedy the problem. She used to care about the company as she's been there over 6 years now, but now she's about ready to say screw it and leave them hanging. That's what a crappy working environment will get you. She was already incredibly unhappy about the raise that doesn't even cover cost of living increases. That was before the gas prices really started to rocket too.
    Jumping on the IT blogging band wagon -- http://www.jefferyland.com/
  • dan87951dan87951 Posts: 107Member
    I love it when I'm on careerbuilder and they say Network Engineer and you click on it and they want all these certs, bachelors degree, and experience but the pay is $15 an hour. LOL

    Makes me wonder some times. Knowledge is power so just keep studying to make yourself a better sale.

    There's no doubt we are slowing down but what slows down always picks back up!
  • eMeSeMeS Posts: 1,875Member
    dan87951 wrote:
    I love it when I'm on careerbuilder and they say Network Engineer and you click on it and they want all these certs, bachelors degree, and experience but the pay is $15 an hour. LOL

    Makes me wonder some times. Knowledge is power so just keep studying to make yourself a better sale.

    There's no doubt we are slowing down but what slows down always picks back up!

    +1000

    Always compete on quality and results, not price.

    MS
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