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Third-Quarter IT “Reality Check”: Expected Budget Increases Not Realized But Slight Hiring Increases Anticipated

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Hanover, Md. – October 14, 2014 – TEKsystems®, a leading provider of IT staffing solutions, IT talent management expertise and IT services, today released the results of its quarterly IT “Reality Check,” a survey that compares current market conditions on the state of spending, skill needs and impact areas originally reported on in the company’s Annual IT Forecast released in November 2013. The most recent survey represents the views of more than 200 IT leaders, including CTOs, IT vice presidents, IT directors and IT managers, as of September 2014.

Key highlights from the survey include:

Download a pdf of the full results here.

Anticipated Budget Increases Never Materialized; IT Leaders Express Slight Decline in Confidence to Meet Business Demands

  • Budget increases have yet to be realized.
    • Heading into 2014, 62 percent of IT leaders expected their IT budgets to increase. Through the first three-quarters of the year, the percentage of IT leaders who experienced increases never rose above 47 percent. At the end of March and June, only 47 percent had seen increases, while at the end of September, 46 percent reported their budgets had increased. 
    • Heading into 2014, 26 percent of IT leaders expected their budgets to stay the same. Since the beginning of the year, this has steadily hovered at an average of 38 percent. Sequentially, the percentage of IT leaders who reported their budgets had actually remained the same was 38 percent (end of March), 37 percent (end of June) and 39 percent (end of September).
    • Heading into 2014, 12 percent of IT leaders expected their budgets to decrease. Through the first three-quarters of the year, the percentage of IT leaders who experienced decreases was higher than anticipated. Sequentially, the percentage of IT leaders who reported their budgets had actually decreased were 15 percent (end of March), 16 percent (end of June) and 15 percent (end of September).
    • Findings: Budgets have not met the originally anticipated increased levels. Sixteen percent of IT leaders who originally anticipated increases now report they expect their budgets to stay the same (up 13 percent) or decrease (up 3 percent). 

  • IT leaders are losing confidence in their department’s ability to satisfy business demands.
    • Heading into 2014, 66 percent of IT leaders were confident in their IT department’s ability to satisfy business demands. Through the first three-quarters of the year, the percentage of IT leaders who expressed confidence was higher than forecast, but has recently come closer to original levels. At the end of March, 72 percent expressed confidence, while 73 percent expressed the same at the end of June, but this fell to 69 percent by the end of September.
    • Heading into 2014, 28 percent of IT leaders expressed a neutral view toward their IT department’s ability to satisfy business demands. At the end of March, 15 percent were neutral, 14 percent at the end of June, and 11 percent at the end of September.
    • Heading into 2014, 6 percent of IT leaders lacked confidence in their IT department’s ability to satisfy business demands. At the end of March and June, 13 percent lacked confidence, but by the end of September the number had risen to 20 percent.  
    • Findings: The persistence of lower budgets seems to have finally impacted IT leaders’ confidence in their ability to satisfy business demands. Over the course of the year there has been a decline in those who expressed confidence (-3 percent) and those who were neutral (-4 percent) and an increase in those who were not confident (+7 percent). In addition to never receiving increased budgets in order to complete workloads, reasons for this decline in confidence could be attributed to the realization that time is running out to complete planned projects or that additional IT projects have been scheduled for the remainder of the year.  

Security and Mobility Rank as the Most Consistently Impactful IT Trends

  • Throughout the first half of 2014, business intelligence (BI) / Big Data, security, mobility and cloud computing ranked in the top five initiatives having the largest impact on organizations. In reality, mobility—originally forecast to be the No. 3 most impactful initiative—has been named the No. 1 impact area for three straight quarters. Security—originally forecast to be the No. 2 most impactful initiative—has indeed been named the No. 2 most impactful area for all three quarters. Cloud computing has ranked either No. 3 or No. 4, while BI / Big Data has seen the most fluctuation—originally forecast to be No. 1, this impact area has consistently been named No. 3 or No. 4.
  • Since the beginning of 2014, VoIP / Unified Communications (UC), open source and gamification have ranked as the least impactful initiatives. VoIP/UC has ranked No. 8 or No. 9, open source has ranked No. 10 or No. 11 and gamification has ranked last at No. 12. 
  • In terms of volatility, the initiatives that fluctuated the most in terms of impact were social networking (ranking between No. 5 and No. 10), bring your own device (BYOD)/consumerization of IT, which consistently moved up throughout the year (ranking between No. 5 and No. 10), and data center consolidation, which dipped lower throughout the year (ranking between No. 6 and No. 11).

Architects and Developers Continue to be the Most Difficult to Hire; Project Managers Move to Top of the Most Difficult to Fill Positions

  • Only two skill-sets—developers and architects—placed consistently in the top five most difficult positions to fill with exceptional talent through three-quarters of 2014. Programming and application development has ranked anywhere from No. 1 to No. 4, and architects have ranked anywhere from No. 1 to No. 5.
  • Help desk / technical support, cloud and social media have consistently been the least difficult roles to fill with exceptional talent. In terms of difficulty in filling positions, help desk / technical support remained the eighth most difficult position to secure, while cloud has ranked from No. 7 to No. 10 most difficult, and social media has remained the least difficult position to fill.
  • The positions that fluctuated the most in terms of difficulty of finding exceptional talent were software engineers, project managers, and BI / Big Data. The project manager role has seen a steady increase from No. 10 most difficult to hire (end of March) to No. 5 (end of June) to No. 1 (end of September).

Full-Time IT Headcount on Upswing

  • Heading into 2014, 47 percent of IT leaders expected increases in full-time hiring. Sequentially, the percentage of IT leaders who reported increases in full-time hiring were 35 percent (end of March), 31 percent (end of June) and 37 percent (end of September), indicating an increase since the mid-year decrease.
  • Heading into 2014, 44 percent of IT leaders expected full-time hiring to stay the same as in 2013. Sequentially, the percentage of IT leaders who reported flat levels of full-time hiring were 56 percent (end of March), 56 percent (end of June) and 52 percent (end of September).
  • Heading into 2014, 9 percent of IT leaders expected full-time hiring to decrease. Sequentially, the percentage of IT leaders who reported full-time hiring had decreased were 9 percent (end of March), 13 percent (end of June) and 11 percent (end of September).
  • Findings: Expectations for hiring full-time employees is on the rise. Since midyear, an additional 6 percent of IT leaders expect increases in full-time hiring, while those who expected full-time hiring to stay the same decreased 4 percent and those who expected it to decrease dropped 2 percent.

Contingent IT Headcount Also Rises

  • Heading into 2014, 46 percent of IT leaders expected an increase in temporary hiring. Sequentially, the percentage of IT leaders who reported increases in temporary hiring were 35 percent (end of March), 37 percent (end of June) and 42 percent (end of September), indicating a steady increase.
  • Heading into 2014, 43 percent of IT leaders expected temporary hiring to stay the same as 2013. Sequentially, the percentage of IT leaders who reported flat levels of temporary hiring were 54 percent (end of March), 54 percent (end of June) and 50 percent (end of September).
  • Heading into 2014, 11 percent of IT leaders expected temporary hiring to decrease. Sequentially, the percentage of IT leaders who reported temporary hiring had decreased were 11 percent (end of March), 9 percent (end of June) and 8 percent (end of September).
  • Findings: Throughout the year the hiring of temporary workers has increased, coming closer to the percentage of IT leaders who originally forecast increases in this area. Since the beginning of the year, an additional 7 percent of IT leaders expect increases in temporary hiring, while those who expected temporary hiring to stay the same decreased 4 percent and those who expected it to decrease dropped 3 percent.  

“The latest data shows some inconsistencies in what IT leaders are experiencing. They seem to have accepted that they will not see the budget increases they expected, and now as the year comes closer to an end, they are losing confidence in their ability to satisfy business demands,” said TEKsystems Research Manager Jason Hayman. “On the bright side, IT leaders have a good grasp on the IT trends that most impact their organizations and they anticipate an increase in hiring. The third quarter closed with an uptick in hiring for both full-time and temporary workers, indicating firms are likely staffing up to make a last push at fulfilling important business initiatives.”

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.