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Mid-year IT “Reality Check”: Budgets Still Lagging Behind Original Expectations; Full-Time IT Headcounts Decrease

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 240 IT leaders, including CTOs, IT vice presidents, IT directors and IT managers as of June 2014.

Key highlights from the survey include:

Budgets Have Settled at Decreased Levels; Most IT Departments Are Still Able to Meet Business Demands

  • Budget increases continue to be less than originally expected.
    • Heading into 2014, 62 percent of IT leaders expected their IT budgets to increase. At the end of June 2014, just 47 percent reported this to be the case, the exact same percentage reported at the end of March 2014.
    • Heading into 2014, 26 percent of IT leaders expected their budgets to stay the same. At the end of June 2014, 37 percent reported this to be the case, nearly the same percentage reported at the end of March 2014 (38 percent).
    • Heading into 2014, 12 percent of IT leaders expected their budgets to decrease. At the end of June 2014, 16 percent reported this to be the case, nearly the same percentage reported at the end of March 2014 (15 percent).
    • Findings: Budgets have not met the originally anticipated increased levels. Fifteen percent of IT leaders who originally anticipated increases now report they expect their budgets to stay the same (up 11 percent) or decrease (up 4 percent).
  • IT leaders remain confident 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. At the end of June 2014, 73 percent reported this to be the case, nearly the same percentage reported at the end of March 2014 (72 percent).
    • Heading into 2014, 21 percent of IT leaders expressed a neutral view toward their IT department’s ability to satisfy business demands. At the end of June 2014, 14 percent reported this to be the case, nearly the same percentage reported at the end of March 2014 (15 percent).
    • Heading into 2014, 6 percent of IT leaders lacked confidence in their IT department’s ability to satisfy business demands. At the end of June 2014, 13 percent reported this to be the case, nearly the same percentage reported at the end of March 2014 (12 percent).
    • Findings: Despite lower budgets, the higher level of confidence expressed in IT staff’s ability to satisfy business demands has not shifted since the end of March. This steady and relatively high level of confidence by IT leaders to meet objectives indicates alignment between IT departments and business areas.

Most Impactful IT Trends Remain Rock Solid

  • Throughout the first half of 2014, mobility, security, business intelligence / Big Data and cloud computing ranked in the top five initiatives having the largest impact on organizations. Mobility and business intelligence / Big Data have traded spots between No. 1 and No. 3, security has consistently maintained the No. 2 spot, and cloud computing has ranked either 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 (ranking between No. 7 and No. 10) and data center consolidation (ranking between No. 6 and No. 11).

Architects and Developers Continue to be Most Difficult to Hire; Help Desk, Cloud and Social Media Emerge as Least Difficult to Hire

  • Developers and architects remain the only positions to place consistently in the top five most difficult positions to fill with exceptional talent in the first half of 2014. Programming and application development has ranked either No. 1 or No. 2, 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. 9 most difficult, and social media has remained the least difficult position to fulfill.
  • The positions that fluctuated the most in terms of difficulty of finding exceptional talent were software engineers, project managers, business intelligence / Big Data and mobile.

Full-Time IT Headcount Decreases; Temporary Hiring Stabilizes

  • Heading into 2014, 47 percent of IT leaders expected increases in full-time hiring. At the end of June 2014, 31 percent reported this to be the case, slipping from the percentage reported at the end of March 2014 (35 percent).
  • Heading into 2014, 44 percent of IT leaders expected full-time hiring to stay the same as in 2013. At the end of June 2014, 56 percent reported this to be the case, the same percentage reported at the end of March 2014 (56 percent).
  • Heading into 2014, 9 percent of IT leaders expected full-time hiring to decrease. At the end of June 2014, 13 percent reported this to be the case, an increase from the percentage reported at the end of March 2014 (9 percent).
  • Findings: Hiring expectations for full-time employees continue to decline. Sixteen percent of IT leaders who originally anticipated increases now report they expect their full-time hiring to stay the same (up 12 percent) or decrease (up 4 percent).

Contingent IT Headcount Remains Consistent

  • Heading into 2014, 46 percent of IT leaders expected an increase in temporary hiring. At the end of June 2014, 37 percent reported this to be the case, a slight uptick from the expectation reported at the end of March 2014 (35 percent).
  • Heading into 2014, 43 percent of IT leaders expected temporary hiring to stay the same as 2013. At the end of June 2014, 54 percent reported this to be the case, the exact same percentage reported at the end of March 2014.
  • Heading into 2014, 11 percent of IT leaders expected temporary hiring to decrease. At the end of June 2014, 9 percent reported this to be the case, representing an increase in the use of temporary work from the beginning of the year and the end of Q1 (also reported at 11 percent).
  • Findings: Although down from original expectations at the beginning of the year, the hiring of temporary workers has experienced a slight increase since the end of Q1. This indicates temporary labor may be supplementing the slower growth in hiring full-time employees.

“IT leaders seem to have settled into a pattern where they recognize they will not see the budget increases they expected, yet they remain confident in their ability to satisfy demands. This indicates a closer alignment between business and IT in which business initiatives, their impact and priority level are clearly communicated to IT, allowing leaders to use their budget effectively,” said TEKsystems Research Manager Jason Hayman. “Additionally, it seems as though organizations are turning to temporary hiring to offset the decrease in expected full-time hiring. This points to the need for organizations to build stronger workforce planning strategies that encompass the ebb and flow between full-time and temporary hiring impacted by the realities of an ever-changing business environment.”

TEKsystems’ Jason Hayman is available for additional commentary. For more information about the survey or to schedule an interview, please contact Rick McLaughlin at [email protected].

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.

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