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The energy sector is being impacted by changes that will continue to challenge this sector into the foreseeable future. Technology is an essential player driving and supporting industry needs to increase efficiency, upgrade IT infrastructure and ensure compliance with government regulations.
TEKsystems’ Energy IT Workforce Snapshot is designed to provide a high-level view of trends impacting IT spending and IT employment within the energy sector. This report can help organizations create a benchmark for comparing IT goals with industry peers and provide a reality check for potential challenges related to securing the right IT professionals.
Worldwide IT spending in the energy and utilities industries is expected to reach $155 billion in 2013, a 4.41 percent increase from 2012. Spending will be spread across telecom ($52.6 billion), IT services ($40.5 billion), software ($16.6 billion) and hardware ($13.6 billion). Increases in IT spending are expected to continue, with worldwide spending projections passing $160 billion in 2014 and passing $170 billion in 2016. IT spending in the energy and utilities industries in North America is expected to reach $66 billion in 2013, a 4.78 percent increase from 2012. Growth is expected to continue through 2016 with spending expected to reach over $71 billion.1
Fifty-three percent of energy and utilities IT leaders anticipate spending on IT infrastructure, and 50 percent expect IT applications services will increase in 2013. Investments in IT outsourcing services and IT education and training should also see increases, according to 38 percent and 34 percent of IT leaders, respectively.2
"Organizations are facing core issues like security threats, legacy modernization and standardization and embracing IT/OT convergence. Driving the industry forward in terms of adopting new technologies is a critical component, and enterprise resource applications providers like SAP and Oracle are helping advance the industry in real time,” says Troy Peaden, TEKsystems Executive Director of Energy Services. “Effectively implementing these technologies must be a top priority to ensure organizations not only have effective IT systems to support the business but also a secure infrastructure that protects against cybersecurity threats. Bringing in the right service providers and the right IT talent to ensure these projects are given the best chance to succeed is essential."
Energy and utilities IT leaders report risk management/legal and compliance, operations and finance/ accounting will have the biggest increase in IT needs in 2013. organizations are faced with a number of compliance projects in 2013. For example, the Dodd-Frank Wall Street Reform and Consumer Protection Act could force energy organizations to enable their systems to interface with new trading exchanges. This would require organizations to test, evaluate and potentially upgrade their IT infrastructure, software and reporting processes to ensure they are compliant and able to effectively report on their trading and other financial activities.3
|Business Increase in IT Needs
|Risk Management/Legal and Compliance|
|Research and Development|
Energy and utilities IT leaders say that acquiring necessary budgets, attracting, retaining and developing top talent and improving IT performance/efficiency rank as the biggest challenges to their organization meeting its goals and objectives in 2013. Selecting the right vendors/partners and regulatory compliance round out the top five challenges.2
|Acquiring necessary budgets|
|Attracting, retaining and developing top talent|
|Improving IT performance/efficiency|
|Selecting the right vendors/partners|
|Managing legacy systems|
|Properly aligning IT strategy to the business|
|Managing security concerns|
|Obtaining executive buy-in for IT projects|
|Managing newly deployed systems|
|Mergers and acquisition|
"The challenge for energy and utilities organizations is to increase efficiencies while improving their distribution models. In order to achieve those efficiencies, they must leverage technology and people to ensure they are compliant and effectively reporting on various activities such as trading,” states Peaden. “At the same time, security may be the most important area of investment. The number and frequency of cyber attacks are increasing, making IT even more critical for energy organizations to have the right systems, security and people in place to protect their own and the nation’s energy infrastructure."
IT leaders are prioritizing several initiatives with significant impact on the business. To implement each initiative, IT leaders slightly favor a contingent workforce model over a permanent one. Forty-six percent of IT leaders say their temporary IT headcount will increase in 2013, compared to 45 percent saying their permanent IT headcount will increase.2 Of those expecting increases in temporary headcount, the majority (27 percent) anticipate temporary headcount increases of 5 percent of more. 2
"The pressure energy organizations are under to upgrade their IT infrastructure and meet regulatory demands is high. The need to alter their workforce model to a more dynamic contract model will become increasingly apparent as the baby boomer population begins to retire. Leveraging a contract model can give organizations the ability to augment their workforce by hiring specific skills required during modernization efforts and quickly ramping up or down to achieve the IT and business objectives.” says Peaden. “Once an initiative is complete, organizations are more likely to hire permanent skills to maintain operational efficiency and ensure the systems continue to run smoothly beyond the implementation. The contract model provides the flexibility required to get a system up and running, but it also prevents them from getting locked in with skill sets only needed during certain periods of an implementation."
Demand for IT professionals with energy and utilities specific experience remains high. TEKsystems’ research shows the number of job requisitions for IT professionals with energy and utilities experience increased 53 percent from 2011 to 2012. Further, the number of energy and utilities IT related job postings has increased more than 70 percent from December 2011 to December 2012.4
Total energy and utilities employment is approximately 715,000 people. Of that population, there are approximately 30,000 energy IT professionals in the U.S., which account for about 4 percent of the total U.S. energy and utilities workforce. Currently, the pool of IT resources with the experience and skills has not kept pace with the strong demand in the energy and utilities industry. The energy IT labor pressure is approximately 0.37 nationwide—meaning there are 0.37 job seekers for every one open energy and utilities IT job.4
The gap between demand and supply is likely to widen. The average age of workers in the energy industry is over 50 and the industry estimates that up to half of its current workforce—500,000 workers—will retire within five to 10 years.5 Comparatively, 31 percent of the active energy and utilities IT workforce has over 16 years of experience.4
"The importance of proactively instituting a workforce planning strategy cannot be understated. Given today’s competitive forces in the industry and threats to national security, energy and utilities organizations cannot risk settling for the B team. Considering how to best attract, develop and retain a players needs to be at the forefront of all strategic initiatives, as IT is a requirement to attain key business goals,” comments Peaden.
The most in-demand IT skills specific to the energy and utilities industries include IT specialists, software engineers, business analysts, project managers and application developers.4 These skills reflect the areas energy IT leaders say will have the biggest impact on their organizations in 2013, which include Big Data, business intelligence (BI), security and cloud computing. Additionally, master data management, BI and security are also high priorities on the list. Energy IT leaders report finding IT talent possessing analytics (BI, Big Data, etc.), mobile, business analyst skills as the three most difficult types of roles to fill. The remaining top difficult to fill positions are security and project management jobs.2
|Analytics (BI, Big Data, etc.)|
"There is a war for talent and a limited number of IT professionals to go around. The most difficult to fill positions are skills where the supply of resources is limited but demand is high, which makes thinking about workforce planning for the future even more essential,” says Peaden. “Conducting a gap analysis and understanding the local and national IT labor market will help identify your skill gaps and see how competitors are sourcing similar skills so you can differentiate your company from the competition."
The skills identified as experiencing the greatest year-after-year growth are also among the top paying jobs in the energy IT field to date. The best IT professionals in these fields can make $100,000 per year or more. The annual median salary for these skills is more than $70,000 per year with the exception of computer support specialists, who can still earn around $60,000 per year if among the top 10 percent of computer support specialists.5
||Annual Median Salary|
|Analytics (BI, Big Data, etc.)||$114,795|
|Computer and Information systems managers||$114,795|
|Software developers, systems software||$95,505|
|Software developers, applications||$90,460|
|Computer systems analysts||$90,360|
|Computer occupations (all other)||$86,610|
|Information security analysts, Web developers and computer network architects||$83,550|
|Computer and mathematical occupations||$80,425|
|Network and computer systems administrators||$75,495|
|Computer support specialists||$58,335|
Further, 38 percent of energy and utilities IT leaders say the salaries of some of the most difficult to fill positions, like business analysts, are expected to increase by up to 5 percent over the next year. Twenty-three percent of energy and utilities IT leaders say that salaries for workers with security and analytics skills will increase by 5 percent or more over the next year.2
Energy and utilities organizations are facing challenges from a technology, legislative and workforce perspective. Navigating each will be necessary to ensure IT and business success. By proactively addressing workforce needs and selecting the right service providers, energy organizations can position themselves for success over the long term.
People are at the heart of every successful business initiative. At TEKsystems, we understand people. Every year we deploy over 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.
TEKsystems. Our people make IT possible.
1Gartner Forecast: Enterprise IT spending by Vertical Industry Market, Worldwide, 2010-2016, November 2012
2TEKsystems IT annual Forecast Survey, November 2012
3Grant Thornton, Financial reform: How the Dodd-Frank Act affects the energy industry. Retrieved here.
4CareerBuilder, Supply & Demand portal, December 2012
5TEKsystems IT professional perspectives survey, December 2011
62012-2011 Dice salary survey, January 2012
7U.S. Bureau of Labor statistics, Occupational Outlook Handbook, December 2012