IT and Organizational Issues

According to CIO Insight analysis of U.S. Bureau of Labor Statistics data IT unemployment has dropped to a decade low while the IT employment market climbed to a record high in 2007. Meanwhile Celent LLC released two reports focusing on the CIO/CTO pressures and priorities for the insurance industry and IT governance organizational alternatives for multi-national insurers.

Focal Points:

• IT employment rose to its record levels in 2007 with more than 3,758,000 working in the U.S. holding IT jobs, according to an analysis by CIO Insight of U.S. Bureau of Labor Statistics. This drove the IT jobless rate down to an average 2.1 percent for IT workers as a whole. That is the lowest rate for IT professionals since the government began tracking employment. This compares very favorably to the average rate of 4.6 percent for unemployment overall at the end of 2007 in the U.S. In addition, IT employment grew 8.5 percent last year. It is estimated that IT managers and staffers represent nearly 2.6 percent of employed U.S. workers at the close of last year.
• IT unemployment was found to range between a low of 1.0 percent to 3.8 percent. Unemployment for database administrators was at 1.0 percent while computer managers were not far behind at 1.3 percent. The jobless rate for network system analysts was a meager 1.5 percent with software engineers at 1.8 percent. Both network/computer system administrators and system analysts had an unemployment rate of 2.3 percent. At the high end of the range were the support specialists who had a 3.8 percent jobless rate.
• Celent predicted 2008 would be a transitional year for insurers with premium growth slowing and IT staffing levels following suit. The biggest challenge facing insurance CIOs and CTOs will be maintaining growth in a softer and more uncertain market by investing in new business and underwriting solutions and by upgrading other core systems. Right behind is the issue of controlling expenses by continuing to migrate to a more modern infrastructure such as SOA. The answer to what is the best IT organization structure to support the business efficiently and effectively is trending to a federated model, according to Celent. The report also looked at IT governance models and offers up a Celent "AAAA" rating for technology that should be applied to IT governance models. The four A’s stand for alignment, agility, accessibility, and affordability.

Experton Group believes U.S. IT unemployment rates will remain very low over the next few years as a result of added demands for IT skill, the Baby Boomer retirements, a slow trickle of new talent into the market from colleges, universities, and other schools, and the tight lid on H-1B visa entrants. This will force companies to expand the movement of jobs to other countries whether by moving centers of excellence offshore or by outsourcing to third parties. IT executives should immediately begin funding and executing staffing and workforce balancing initiatives so that strategic goals and objectives can be met throughout the entire corporate strategic horizon. (See Experton Group Research Note "Top Five Resource Risk Management Challenges.") The Celent reports point to the challenges business and IT executives will face as organizations become more global and virtual. While responsibility for execution may be shifted to other companies and/or geographies, executives will still be held accountable. They must therefore develop and execute governance and management models that enable them to perform their jobs effectively and efficiently and to meet their fiduciary responsibilities.