IT Hiring Climbs Despite The Cloud

At a time when companies have abundant reasons to keep IT staffs lean, a new survey shows that IT hiring may be shedding years of stagnancy.

In its annual "IT Spending and Staffing Benchmarks" study, for which 200 IT organizations in the US and Canada were surveyed, IT research firm Computer Economics found that IT staffs at the median will grow by 1% this year. In other words, half of the companies surveyed say their IT staffs will grow by more than 1%. Leading the way are financial services firms and healthcare providers, which expect IT staffs to grow 5% and 3.9%, respectively.

Given that IT leaders entered 2014 with lowered expectations after a somewhat tepid 2013, and that increased adoption of cloud computing would appear to reduce IT staffing needs in a number of areas, the staffing increase is a positive sign for a sector that hasn't seen job growth since before the Great Recession.

Especially encouraging are the indications that the growth appears to be more sustainable trend than temporary surge, John Longwell, VP of research at Computer Economics, said via email.

"I think the hiring, especially among larger companies, reflects confidence in the sustainability of the recovery and a recognition that they need to bring on staff to support operations," Longwell said. "We are not seeing a large or dramatic increase, but we are seeing steady improvement."

That IT organizations need more staff to support operations was clear from another survey finding: More than two-thirds (67%) of surveyed organizations say their IT operations budgets have increased, up from 61% the previous year.

Conversely, IT capital budgets are expected to be flat at the median, with an even split between companies that are increasing their IT capital spending and those that are shrinking it. While it would be easy to attribute the growing emphasis on operations to cloud adoption, and the reduced need for IT infrastructure that results, Longwell says the impact of the cloud on capital spending will develop more gradually than the current trend is unfolding.

"IT organizations are still managing a lot of infrastructure and on-premises systems and they need to keep investing in that infrastructure and those systems. While the disruptive influence of cloud computing may partly explain the pause in the capital spending growth, we think there have to be other, more short-term explanations at work."

Oddly enough, one of the survey's most positive indicators is a finding that, at first blush, appears anything but. More than half of respondents (53%) say that their IT operational budgets are inadequate to support the business, with 10% describing their operational budgets as "very inadequate."

"This is an interesting metric because it is somewhat counterintuitive," says Longwell. "At the start of the recession, when IT executives were being asked to cut their budgets, they were actually more positive about the adequacy of their budgets. Now that the business climate is improving, they are feeling pressure to deliver more services, and their current budgets seem inadequate to support the growth.

"So the dissatisfaction level signals a willingness to lobby for more spending on IT. This is an indicator that business leaders are under pressure to increase IT spending."

Translation: The more IT leaders feel they're being shortchanged, the more optimistic their organizations should feel about the future.