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IT 2016: Midyear Outlook Improves but Concern Grows Regarding New Initiatives; Data-Related Skill Sets Rise in Importance

For media inquiries, please contact us at media@TEKsystems.com.


TEKsystems’ latest IT “Reality Check” Highlights the Shifting Status of Trends, Expectations and Challenges of 2016

TEKsystems®, a leading provider of IT staffing solutions, IT talent management expertise and IT services, today released the results of its midyear IT “Reality Check,” a survey that compares current market conditions on the state of spending, skill needs and impact areas to those originally reported in the company’s Annual IT Forecast released in December 2015. The most recent survey represents the views of more than 300 IT leaders (CIOs, IT VPs, IT directors, IT hiring managers) as of June 2016.

Key highlights from the survey include:

Expectations for Budget Increases Up to Previous Year’s Level, Yet Expectations for Decreases Swell to Four-Year High

    Q: Which of the following best describes how your organization’s 2016 IT budget changed compared to 2016 forecast?

    2016 Forecast (Expectations)

    2016 Mid-Year (Actual)

    Increase

    37%

    48%

    Stayed the same

    51%

    27%

    Decreased

    12%

    25%

  • TEKsystems’ Take: The percentage of IT leaders expecting budget increases, which were at historical lows entering 2016, proved to be short-lived. More leaders indicated their budgets increased to levels on par with the previous year (i.e., entering 2015, 45 percent of IT leaders expected their budget to increase). However, those expecting budgets to stay the same dropped to 27 percent (a 24 percent decline), with approximately half of those previously indicating no change to budgets now reporting an increase (11 percent), and approximately half now reporting a decrease (13 percent).  With the percentage of IT leaders experiencing decreases at a four-year high, it seems clear that senior leadership at many organizations expect functions outside of the IT department to drive their own technology initiatives.
Confidence Levels Vary as Core IT and Line of Business (LOB) Spike Upward, While New Initiatives Drop Significantly

Q: How confident are you in your IT department's ability to satisfy overall ORGANIZATIONAL demands?*

2016 Forecast

2016 Mid-Year

Increase

68%

81%

Stay the same

23%

12%

Decrease

9%

7%

*Overall organizational demands comprised of core IT and LOB demands

Q: How confident are you in your IT department's ability to satisfy and support each of the following in 2016?

Core IT demands*

Line of business demands*

New initiatives

2016 Forecast

2016 Mid-Year

2016 Forecast

2016 Mid-Year

2016 Forecast

2016 Mid-Year

Confident

75%

87%

60%

75%

54%

39%

Neutral

16%

6%

30%

18%

24%

42%

Unconfident

9%

7%

10%

7%

22%

19%

  • TEKsystems’ Take: IT leaders’ confidence in their ability to meet overall organizational demands rose to all-time highs as compared to previous years (i.e., entering 2015, 71 percent of IT leaders expressed confidence). While both core IT and LOB rose by double-digits (12 and 15 percent, respectively), confidence in their ability to support new initiatives dropped precipitously (15 percent). With more respondents now indicating that they expect either budget growth or decline, TEKsystems believes there is a correlation between the decentralization of technology initiatives and spending, and the schism between confidence in meeting organizational demands versus the ability to manage new initiatives. It appears some budgets are being diverted to assure that core organizational demands will continue to be met, but that new initiatives — which tend to be decentralized and rely on budget resources outside of main IT — may enter a state of greater uncertainty.
IT Priorities Consistent Halfway Through Year; Networking Displaced by Data Center Consolidation in Top Five Areas

Q: Which of the following will have the biggest impact on your organization in 2016? (Stack rank top three)

Ranking

2016 Forecast Rank

2016 Forecast % Ranking #1-3

2016 Mid-Year Rank

2016 Mid-Year % Ranking #1-3

#1

Security

47%

Security

66%

#2

Business intelligence / Big Data

31%

Mobility

34%

#3

*Networking

30%

Cloud Computing

31%

#4

Cloud Computing

26%

*Data Center Consolidation

27%

#5

Mobility

26%

Business intelligence / Big Data

24%

*Areas that previously ranked outside the top five

  • TEKsystems’ Take: For the past four years, IT leaders identified security, business intelligence (BI) / big data, cloud computing and mobility among the top five areas impacting their organizations—and this remains unchanged halfway through 2016. However, networking, which moved into the top five areas entering 2016, has now been replaced by data center consolidation. TEKsystems believes that while networking was a higher priority at the beginning of 2016, the growth of cloud adoption and Internet of Things (IoT) projects has initiated a shift in required IT skill sets. As those initiatives have matured, the need for data analytics and the ability to derive actions supporting business objectives from that data has taken priority.
Architects Jump to Top Spot as Hardest to Fill Role; Security Edged Out of Top Five

Q: How difficult is it currently to find exceptional talent to fill roles for the following types of IT-related positions?* (Stack rank top three)

Ranking

2016 Forecast Rank

2016 Forecast % Ranking #1-3

2016 Mid-Year Rank

2016 Mid-Year % Ranking #1-3

#1

Programmers and developers

65%

*Architects

52%

#2

*Security

45%

Programmers and developers

51%

#3

Software engineers

42%

Project managers

43%

#4

*Database administrators

39%

Software engineers

40%

#5

Project Managers

38%

*Big data analytics

39%

*Areas that previously ranked outside the top five

  • TEKsystems’ Take: Programmers and developers, project managers and software engineers remained highly difficult-to-fill positions. As of midyear 2016, security, previously ranked second, fell to No. 6 (38 percent); database administrators, previously ranked fourth, fell to No. 9 (28 percent). Conversely, architects rose from No.7 at the end of 2015 (36 percent) to the top position, and big data analytics rose from No. 10 to No. 5 (39 percent). TEKsystems believes this increased demand for the specific personnel required during the initial phases of new technology projects has manifested in lower confidence in the ability to fulfill the needs of new initiatives. Additionally, the heightened difficulty of securing big data analytics skills supports the hypothesis that with additional data being captured, data-related skills are becoming increasingly important. As cloud adoption increased, core IT’s need for security may also be lessening as the brunt of the security work associated with those applications is now being shouldered by the cloud providers.
Full-Time Hiring Mirrors Budget Trends; Outsourcing Model Potentially Impacting In-House Contingent Hiring Needs

Q: How much do you expect hiring to change for the following in 2016 versus 2015?

2016 Forecast

2016 Mid-Year

Full-time IT staff

Increase

43%

48%

Stay the same

47%

36%

Decrease

10%

16%

Contingent IT staff

Increase

41%

33%

Stay the same

51%

50%

Decrease

8%

17%

  • TEKsystems’ Take: Budgets and full-time hiring trends appear to be linked. The percentage of IT leaders that expected full-time hiring to stay the same dropped—from 47 percent to 36 percent (an 11 percent decline), following a similar trend among the those that expected budgets to stay the same (a 24 percent decline). Additionally, the number of IT leaders expecting budget and full-time staff increases (11 percent and 5 percent, respectively) both rose, as did those expecting budget and full-time staff decreases (13 percent and 6 percent respectively). Finally, there was an 8 percent decline in those originally expecting increases in contingent IT staff, which appears to have been redistributed to those expecting contingent IT staff decreases (9 percent), and could be driven by the increased outsourcing of IT activities associated with contingent hiring (e.g., help desk, end-user support, data center support). These skill sets are still in high demand, but the demand may be shifting to service providers as opposed to internal IT departments.

“While the overall trends remain consistent, there are some subtleties worth exploring. There have been shifts toward a ‘have or have not’ view regarding budgets, and while IT leaders seem to be comfortable that they can address core IT demands and LOB needs, new initiatives seem to be a stressor. While the ‘core four’ of security, mobility, BI and cloud remain impactful areas, the need for data management and related skills is rising. Additionally, as organizations transition from implementing new initiatives into maintenance of existing programs, the need for contingent hiring has dipped slightly,” said TEKsystems Research Manager Jason Hayman. “If IT leaders aren’t experiencing these trends yet, they should be on the lookout for how they could affect their organizational needs. IT leaders should leverage this insight and proactively seek out the business leaders in their organizations to understand projects and initiatives for the remaining half of the year. This insight will help IT leaders better align their workforce planning efforts to ensure they have the necessary personnel in place to support the business demands that are sure to come.”

TEKsystems’ Jason Hayman is available for additional commentary. For more information about the survey, or to schedule an interview, please contact Nathan Bowen at nabowen@TEKsystems.com.

About TEKsystems

People are at the heart of every successful business initiative. At TEKsystems, we understand people. Every year we deploy more than 80,000 IT professionals at 6,000 client sites across North America, Europe and Asia. Our deep insights into IT human capital management enable us to help our clients achieve their business goals–while optimizing their IT workforce strategies. We provide IT staffing solutions, IT talent management expertise and IT services to help our clients plan, build and run their critical business initiatives. Through our range of quality-focused delivery models, we meet our clients where they are, and take them where they want to go, the way they want to get there.