IT hiring stays apace despite recession worries

By Linda Tucci, Senior News Writer 21 Feb 2008 | SearchCIO.com

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The rosy picture could turn ugly yet. IT has a tendency to be "a step behind the general economy," said Bruce Barnes, president of Bold Vision LLC, a Dublin, Ohio-based peer-to-peer counseling firm for CIOs.

Sound Bytes SearchCIO.com spoke with Bruce Barnes, president of president of Bold Vision, a peer-to-peer counseling firm for CIOs, about the reasons for a tight IT job market, despite a sharp economic slowdown. Listen to Barnes' additional comments on: The Age of the Employee. Here's what it takes to land and keep top-notch people:   IT in tough times. Find out why anyone who cuts the IT budget in tough times is an "idiot":

But, for now, a shortage of skilled IT specialists and continued staff expansion at many IT organizations mean that CIOs will have a tough time filling positions while midlevel job seekers could have plenty of options.

Indeed, 24% of CIOs report they want to add staff in 2008 and anticipate having difficulty finding qualified people, according to a new survey of 1,400 IT executives by Robert Half Technology, a Menlo Park, Calif.-based staffing firm. The problem, which could extend to even popular IT areas such as Web development and wireless networking, was most acute at large companies with 1,000 or more employees, where 27% of CIOs cited hiring as their top staffing challenge.

That may be because according to Bureau of Labor Statistics, the unemployment rate in computer science is 2.5% -- less than half the 5.4% unemployment rate in the general economy. IT jobs grew by 4% in 2007, an order of magnitude better than 0.7% growth in all non-farm jobs, outpacing business and professional services.

Bold Vision's Barnes recently touched base with CIOs at some 50 organizations. "I would say on average I am hearing 95% concurrence that hiring is tough. There is no way to see any kind of surplus of credible IT resources right now," Barnes said.

In particular, there is a dearth of midlevel professionals. "Anything in that middle ground -- it's extremely difficult to find really solid people," he said.

CIO concerns about hiring surfaced last year in the Society for Information Management's annual survey, published in October. For the first time in nearly three decades, a majority of IT executives (50.9%) said attracting, developing and retaining IT professionals was their top management concern.

A Gartner Inc. market study, meanwhile, showed that 66% of CIO respondents projected an increase in IT staff between March 2007 and March 2008. Nearly 16% projected that increase as greater than 10%.

Part of the concern over talent is related to the exodus of skills and institutional knowledge as baby boomers retire. The Gartner survey also showed that 62% of CIOs were concerned about their aging workforces, but only 21% had a plan to capture workers' knowledge before they retired.

"Obviously, the economy has changed since then," said Lily Mok, research director, executive programs content at Stamford, Conn.-based Gartner. "But anecdotally, even with the market slowing down in some sectors, overall, we continue to hear from CIOs and HR recruiters saying that demand is high and requesting where they can find people with certain skill sets."

That means for qualified job seekers, it's a buyer's market. Recruits "want more money, they want more assurances, they want to know what the future holds. They're asking hard questions, and if we haven't got good answers, they're blowing us off," Barnes said.

Hiring, even as the business cuts back

Robert Baxter, CIO of Shamrock Foods Co., a food distributor based in Phoenix, is both watching business slow down and still hiring.

Family-owned Shamrock does business in nine southwestern states; it operates the largest dairy in the region and manufactures dairy products under its Shamrock Farms label. Orders are down across the food service industry, as consumers cut back on dining out, Baxter said. His IT department is adjusting accordingly. He said he's prepared to cut 5% in expenses from his 2008 budget, and to push some projects out six to 12 months in order to focus on projects that "help growth and reduce costs" at Shamrock.

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Even so, he needs to hire several people, he wrote in an email, and, yes, he anticipates certain positions will be hard to fill -- in particular Oracle/Linux database administrators, legacy applications people and .NET developers.

Jerry Nichols, CTO at BayPort Credit Union in Newport News, Va., is more bullish on IT projects, projecting a "very busy year." He was concerned about filling staff needs.

BayPort manages more than $950 million in assets and has 94,000 members. But the credit union's compensation model "has not been competitive until recently," said Nichols, who oversees an internal IT staff of 12. "We have found in our market that all IT positions are hard to fill with qualified people."

Nichols said he needs to hire a systems analyst, programmer and network analyst. And, the retirement of baby boomers is an issue close to home. Two of his senior people are retiring this year, and he himself is retiring in 2009.

Paradoxical IT

But all this still begs the question why IT -- denounced as dead by the likes of Nicholas Carr and pundits just a few years ago -- should be hiring through a recession.

Might it be that companies are realizing the competitive differentiation that IT can bring?

Barnes calls this capability the IT paradox. Though IT can make business newly competitive, during economic slowdowns, companies become more cautious. "They drift to common ground. They look more and more alike," Barnes said.

"This is the time companies need to be coming up with new ways of differentiating themselves," Barnes said. "If you think about it, IT is one of the primary mechanisms for differentiation."

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