IT Funding and Staffing Trends

According to the latest Hudson Employment Index the employment picture worsened in December while a recently released study by the Society for Human Resource Management (SHRM) Foundation finds the talent pool for senior executives is shrinking. On the IT funding side, a Celent LLC report covering finance industry trends shows slower worldwide IT spending growth.

Focal Points:

• The December Hudson Employment Index showed IT worker confidence dropped from the previous month and year over year. Only 23 percent of those surveyed expect their companies to hire, which is down from 30 percent last year. 19 percent expect job cuts and concern over job security has risen slightly to 24 percent of those surveyed. Worker confidence is highest in Dallas/Ft. Worth, TX, Washington, DC, and Boston, MA. On the positive side 42 percent of the participating IT workers viewed their financial situation favorably.
• An SHRM Foundation survey of business executives found that the most critical challenge and risk facing business executives is the ability to find and retain talented leadership. The study concludes all organizations, regardless of size or type of business, will have to deal with a shortage of skilled executives. The five most significant future challenges facing companies are succession planning; recruiting and selecting talented employees; engaging and retaining talented employees; providing leaders with skills to be successful; and rising healthcare costs. In general, C-suite executives do not feel confident that their companies have a plan to address these human capital challenges, particularly among smaller companies, according to the report.
• A new Celent study on IT spending in financial service estimates an increase of 5.9 percent in global technology spend in 2007 over 2006 to $342.1 billion. The study predicts growth to be at a compounded annual growth rate of 6.3 percent through 2009. The projected growth in North America is expected to be driven by Canadian banks, as they continue to increase their spending by a 4.3 percent. Overall North American IT spending will climb a modest 3.6 percent.

Experton Group believes enterprises and IT staff view 2008 as a growth year outside of the U.S. whereas more uncertainty, and limited growth, will persist in the U.S. for most of the upcoming year. The sub-prime banking crisis will cause a retrenchment within the American banking community which will spill over to other sectors, thereby slowing, but not stalling, growth in the U.S. The increase in demand for IT skills, senior professional and management, will drive executives to spend more on recruiting, retaining, and retraining of existing staff. IT executives need to treat resource risk management as a top priority initiative over the next few years in order to avoid a shortage of key skills and talent needed to achieve strategic corporate goals and objectives.