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Hanover, Md. – December 2, 2014 – TEKsystems®, a leading provider of IT staffing solutions, IT talent management expertise and IT services, today released its annual research which highlights lower expectations for budget increases for the coming year, yet continued confidence in IT departments’ ability to meet business demands. More than 500 IT leaders (CIOs, IT VPs, IT directors, IT hiring managers) were polled in October 2014 on the current state of IT spending, skills needs and workforce issues as well as expectations for 2015. The full results of the survey, a video and an infographic are available in TEKsystems’ online research library.
Key highlights from the survey include:
Expectations for Budget Increases Drop; Confidence in Ability to Meet Business Demands Continues to Rise
- Heading into 2015, 45 percent of IT leaders expect their budgets to increase. This represents a 17 percent decline from the 2014 forecast, when 62 percent expected budgets to increase. Meanwhile, the percentage of IT leaders that expect budgets to stay the same increased from 26 percent to 39 percent, a 13 percent gain.
- Seventy-one percent of IT leaders report confidence in their ability to satisfy business demands in 2015, representing an increase from 66 percent and 54 percent in forecasts for 2014 and 2013, respectively.
- TEKsystems’ Take: From 2014 to 2015, there has been a significant decline in the number of IT leaders who expect budget increases. The percentage of leaders who expect increases in 2015 returned to levels similar to the 2013 forecast (48 percent), signifying that 2014 was the year of budget gains while 2015 will be a year of optimism, though not at the previous year’s level. Eighty-four percent expect budgets to increase or stay the same, despite the reduction in budget growth momentum. Meanwhile, seven out of 10 IT leaders express confidence in their ability to satisfy business demands, indicating that as long as budgets do not decline, the vast majority don’t anticipate a negative effect on IT responsibilities.
IT Priorities Consistent Year over Year; Majority Still Expect Investment in Security, Business Intelligence / Big Data, Mobility and Cloud
- For the past three years, IT leaders listed security, business intelligence (BI) / Big Data, mobility and cloud computing among the top five areas impacting the organization. Entering 2015, enterprise resource planning (ERP) regained its placement within the top five, after being displaced by virtualization in 2014.
- The top five areas where most IT leaders expect to increase spending in 2015 include security (65 percent), mobility (54 percent), cloud (53 percent), BI/Big Data (49 percent) and storage (46 percent). Twenty-nine percent of IT leaders also expect to increase spending on ERP.
- TEKsystems’ Take: The consistency in impact areas over the last three years explains why IT leaders’ confidence continues to grow, even as fewer IT leaders are expecting budget increases. The largest percentage of IT leaders anticipate budget increases for these same “core four” areas (security, BI / Big Data, mobility and cloud) in 2015, indicating strong organizational alignment between the priority and scope of IT initiatives.
Programmers and Developers Remain Hardest to Fill; Key Operational IT Skills Can Expect Salary Increases
- From 2013 to 2015, IT leaders have consistently agreed on the most difficult positions to fill. For the past three years, programmers and developers maintained the top spot. Software engineers gained one spot in each of the past two years and are now listed as the second-hardest role to fill. From 2014 to 2015, architects slid down the list one spot to No.3, while project managers and security positions each gained one spot to finish fourth and fifth, respectively.
- These roles will earn a salary increase; 54 percent of IT leaders predict higher salaries for programmers and developers and security experts, with similar expectations for software engineers (51 percent), project managers (49 percent) and architects (48 percent).
- TEKsystems’ Take: From 2014 to 2015, the percentage of IT leaders who expect to pay higher salaries for these skills decreased from an average of 67 percent to 51 percent. However, the majority still expect to make increases, reflecting an understanding of the role salary plays in recruiting and retaining talent with high-demand skill sets.
BI and Big Data, Cloud and Mobile Skills at “Next Level” of Hiring Difficulty following Key Operational IT Skills
- In the 2014 and 2015 forecasts IT leaders indicated that BI and Big Data, cloud and mobile roles have not been as difficult to fill as the key operational IT skills. They ranked in the lower half of the difficult-to-fill scale where BI and Big Data analytics expertise were No.7 and No.8 respectively, while cloud and mobile placed No.10 and No.11 (in a ranking of 1-12).
- On average, 45 percent of IT leaders expect to pay increased salaries for BI and Big Data, cloud and mobile skills in 2015—fewer than the 60 percent who anticipated increases for these salaries in 2014. Entering 2015, 49 percent expect salary increases for BI and Big Data experts, followed by increases for mobile (44 percent) and cloud (42 percent) professionals.
- TEKsystems’ Take: While BI and Big Data, cloud and mobile are not among the most difficult to fill skills, these are high impact roles and IT leaders expect to increase spending on each in 2015. This anticipation could point to an increase in using outsourcing or staff augmentation for these particular roles, providing organizations with greater agility and flexibility, while also fulfilling short-term talent needs.
Operational Efficiency Replaces Revenue Growth as Top Challenge; “Bridge Leader” Positions on the Rise
- Entering 2015, seventy-three percent of IT leaders indicate that operational objectives such as reducing costs, improving efficiency, consolidating, standardizing and streamlining present the biggest organizational challenges. Comparatively, increasing revenue growth and profitability was cited as the biggest challenge in 2014.
- Heading into 2014, the “doers” (programmers and developers, project managers, help desk and technical support, software engineers, architects) were cited as the most critical roles to success. In 2015, “bridge leadership” positions gained in importance, as IT managers jumped from No. 9 to No. 1, and VP/director-level leaders gained three spots to land at No. 4 on the list. Project managers (No. 2), programmers and developers (No. 3), and help desk and technical support (No. 5) remained in the top five.
- TEKsystems’ Take: While IT leaders continue to focus on revenue growth as an organizational challenge, recent economic progress has lessened its urgency and prioritized addressing operational challenges. The “doers” that drove success in 2014 are now mixed with the “bridge leader” roles of line-level managers, directors and vice presidents in 2015. This shift is likely due to these leaders’ ability to connect with various business areas and communicate how their needs align to the IT department’s priorities. This can be interpreted as a greater understanding of the importance of strategy and tactical alignment for operational efficiency.
Salaries and Hiring Will Continue to Rise, But at Slower Growth Rates; Make-up of IT Staff to Remain Consistent
- Salary increases are most likely to be average, with 68 percent of IT leaders saying that they expect overall staff salaries to increase by up to 5 percent. Only 8 percent expect increases of six percent or more and 21 percent expect salaries to remain the same.
- Hiring expectations have also slowed. Entering 2014, 47 percent of IT leaders expected an increase in full-time IT staff hiring. Entering 2015, just 40 percent expect an increase, and 50 percent expect it to be the same as 2014.
- Meanwhile, entering 2014, 46 percent expected contingent hiring to increase. Entering 2015, 36 percent expect it to increase and 54 percent expect it to be the same as 2014.
- TEKsystems’ Take: While the percent of IT leaders expecting increases in hiring declined, they are still optimistic with what the composition of their workforce will be in 2015 as 90 percent expect hiring for both full-time and contingent staff to either increase or stay the same. Headcount changes in 2015 will focus on the expansion of projects already in place over adding headcount to support new programs. While salary increases will be less frequent, any increases will reward those with skills aligned with organizational focus areas.
“It’s easy to jump to the conclusion that the reduction in expected budget increases signifies a need to cut back and eliminate important projects, but in reality, IT leaders are simply looking to be more realistic about what they can do with their resources and plan accordingly,” said TEKsystems Research Manager Jason Hayman. “Rather than viewing the decrease in the rate of growth of spending as a reason to eliminate projects, IT leaders can instead use that information to implement sound talent management strategies in areas that are truly benefiting the business, and they can allocate resources to solidify those objectives.”
TEKsystems’ Jason Hayman is available for additional commentary. For more information about the survey or to schedule an interview, please contact Rick McLaughlin at TEKsystems@daviesmurphy.com.