IT leaders on the state of IT spending

New research highlights an increasing optimism in the technology spending landscape. Nearly 900 IT leaders (CIOs, IT VPs, IT directors, IT hiring managers) were polled by TEKsystems in September 2013 on the current state of IT spending, skills needs and workforce issues as well as expectations for 2014.

Confidence in spending increases and ability to meet demands are high:

• IT leaders are exceedingly confident in stability or growth of IT budgets. Eighty-eight percent expect their organization’s IT budget to stay the same or grow, with 62 percent expecting positive growth. Only 12 percent expect decreases. In year-to-year comparisons those expecting growth have increased from 48 percent to 62 percent, while those expecting decreases have declined from 16 percent to 12 percent.
• IT leaders are confident in their ability to satisfy business demands. Overall, on average 66 percent of leaders are confident in their ability to satisfy demands across a variety of areas. Operations ranks highest in confidence (80 percent), followed by finance (69 percent), human resources (63 percent), sales (60 percent) and marketing (59 percent). In year-to-year comparisons, those expressing overall confidence has grown from 54 percent to 66 percent, while those who lack confidence has decreased from 16 percent to 6 percent.

Success hinges on core skills and leaders are prepared to pay:

• Hands-on positions are more critical to success than leadership. When asked which IT roles are the most critical for organizational success, IT leaders rank, in order, the top five roles as programmers and developers, project managers, help desk and technical support, software engineers and architects. Top 10 responses were rounded out, in order, with executive leaders, VP’s and directors, business analysts, IT managers and account managers.
• Exceptional talent in critical skills is hard to find; pay increases match scarcity. The top three most difficult IT roles to find exceptional talent, in order, are programming and development, architects and software engineers. The expertise areas that received the highest overall positive expectations for salary increases were programmers and developers, software engineers, project managers and architects, indicating that leaders recognize the demand for these skills.

Spending areas are interdependent:

• BI and Big Data maintain top spot. Business intelligence (BI) and Big Data, security, mobile, cloud computing and virtualization were ranked as the top five trends expected to have the largest organizational impact. Compared to the previous year, BI and Big Data remained in the top spot, while security moved up from third to second, mobile moved up from fourth to third and cloud computing dropped from second to fourth. Interestingly, virtualization moved up from seventh to fifth.
• Ripple effect occurs in IT spending. The top two areas where approximately 60 percent of IT leaders expect overall positive changes in spending are mobile (62 percent) and cloud (59 percent), which likely contributed to security (59 percent) placing in the top three. Additionally, BI and Big Data placed fifth overall (51 percent), which may have driven storage (57 percent) into the fourth-highest spot.

Salaries on the rise, hiring increasing at similar rates across employment models:

• IT leaders prepping salary structures to allow increase. In terms of compensation, the percentage of IT leaders who expect an increase in staff salaries has grown from 55 percent to 81 percent, with 71 percent expecting salary changes of up to 5 percent. Those expecting salaries to remain the same or decline have shrunk from 38 percent to 19 percent year over year.
• Regardless of skill area, majority of IT leaders expect some salary increase. The groups where at least 60 percent of IT leaders expect salary increases are programmers and developers (69 percent), software engineers (67 percent), project managers (67 percent), architects (65 percent), security (65 percent), business analysts (63 percent), mobile (62 percent) and BI and Big Data (60 percent). They are followed by cloud (58 percent), help desk and technical support (56 percent) and social media (50 percent).
• Organizations hiring in a mirror-image, blended model. According to the survey, approximately one in four IT personnel are contingent workers. The hiring rate for each type of worker is expected to grow at nearly the same rate with 47 percent of IT leaders expecting the number of permanent hires to increase compared to 46 percent of IT leaders expecting temporary hires to increase.

“In comparison to last year, IT leaders have significantly shifted their outlooks to be positive overall in IT budget allocations as well as their expectations for hiring and salary increases,” says TEKsystems Research Manager Jason Hayman. “Most interesting is that there seems to be greater demand for the core skill sets of programming and application development and software engineering. IT leaders indicate exceptional talent has become harder to find in these areas and have adjusted their salary strategies accordingly.”