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2013 IT Workforce Snapshot - Energy

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.

IT Spending Projections

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."

Challenges for Energy and Utilities IT Leaders

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
Operations
Finance/Accounting 
Marketing/Sales
Research and Development
Purchasing
Human Resources

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


Biggest Challenges
Acquiring necessary budgets
Attracting, retaining and developing top talent
Improving IT performance/efficiency
Selecting the right vendors/partners
Regulatory compliance
Managing legacy systems
Properly aligning IT strategy to the business
Managing security concerns
Obtaining executive buy-in for IT projects
Customer loyalty
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."

Energy and Utilities IT Hiring Trends

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.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."

Supply and Demand for Energy and Utilities IT Professional

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.

Hot Energy and Utilities IT Skills

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

IT Leaders
Analytics (BI, Big Data, etc.)
Mobile
Business analysts
Security
Project managers
Cloud
Engineers
Developers
Architects
.Net
Social media
Help/Desktop support
"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."

Compensation

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


IT Leaders
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
Computer programmers $78,400
Database administrators $75,760
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

Conclusion

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.

About TEKsystems®

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.

Footnotes
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