CIOs Expect Steady Growth in Tech Sector Hiring

Chief information officers (CIOs) anticipate steady growth in the hiring of information technology (IT) professionals, according to the Robert Half Technology IT Hiring Index and Skills Report released this week.

Sixteen percent of executives polled plan to hire full-time IT staff in the fourth quarter of 2005, while 4 percent expect personnel reductions. The net 12 percent increase in hiring is the largest net increase since the third quarter of 2002. Among CIOs who plan to hire in the fourth quarter, 36 percent said corporate expansion is the reason. Twenty-one percent cited increased customer and end-user support needs.

“Companies are making new investments in technology and initiating IT projects to support business growth,” said Katherine Spencer Lee, executive director of Robert Half Technology. “As a result, managers are expanding their workforces once again, adding IT personnel gradually to meet individual staffing needs.”

Shrinking Labor Pool

Lee added that the improving employment environment, combined with a decline in the number of computer science graduates, is impacting the labor pool and slowly shifting the market in the candidate’s favor.

“Technology professionals with the most desirable skill sets are beginning to receive multiple offers,” she said. “Individuals who may have been dissatisfied in their positions in recent years also are starting to pursue other opportunities, making employee retention a growing concern for companies.”

Joyce Gioia, president of Greensboro, N.C.-based The Herman Group, a firm of strategic business futurists concentrating on workforce issues, told TechNewsWorld that a skills handicap resulting from the massive movement toward offshoring IT jobs is partially to blame for the shrinking IT labor pool.

“When IT professionals were laid off during the slowdown in 2000, the 9/11 tragedy and then the ensuing recovery, they didn’t have the financial resources to upgrade their skills. Today, companies need higher skill levels,” Gioia said. “Also, fewer young people are going into the computer sciences field. Overall, there’s a skills deficit.”

In-Demand Skills

When asked which technical skill sets were needed most within their IT departments, 81 percent of CIOs said Microsoft Windows (NT/2000/XP) administration expertise. SQL Server management ranked second, with 51 percent of the response, followed closely by wireless network management at 49 percent.

According to CIOs, the specialty most in demand within IT departments is networking (19 percent of the response). Businesses also seek help desk/end user support specialists (15 percent), applications developers (12 percent) and data/database managers (11 percent).

Regional Outlook

Technology executives in the Pacific states anticipate the strongest IT hiring activity in the fourth quarter. Twenty-one percent of CIOs expect to add personnel and 3 percent foresee staff cutbacks. The net 18 percent increase is six percentage points above the national average.

“Companies in the Pacific region who may have experienced deep cuts during the technology downturn are beginning to expand and require additional IT staff to support this growth,” Lee said. “Web and applications developers, database administrators, networking professionals and software engineers are in particularly strong demand.”

Notable hiring gains also are expected in the Middle Atlantic region. Twenty percent of CIOs plan to expand their IT departments and 4 percent anticipate personnel reductions, a net 16 percent hiring increase.

Industries Hiring

The finance, insurance and real estate (FIRE) sector is expected to lead the nation in hiring activity during the fourth quarter. Thirty-nine percent of CIOs in this industry plan to add IT staff and only 3 percent expect personnel cutbacks.

“Firms in the FIRE sector are heavily dependent on data and need IT professionals to help manage, mine and safeguard it, especially in light of recent corporate governance regulations mandating better internal controls,” Lee said. “Hiring activity also is being driven by business growth in sub-sectors such as residential and commercial lending.”

CIOs in the business services industry also plan strong hiring activity. Eighteen percent of technology executives plan to expand their IT departments and none anticipate staff reductions, a net 18 percent hiring increase.

The national poll includes responses from more than 1,400 CIOs from a stratified random sample of U.S. companies with 100 or more employees. It was conducted by an independent research firm and developed by Robert Half Technology, a leading provider of IT professionals on a project and full-time basis.

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