October 26, 2023
First, some good news from the U.S. Bureau of Labor Statistics: Between now and 2032, “Overall employment in computer and information technology occupations is projected to grow much faster than the average for all occupations. About 377,500 openings are projected each year, on average, in these occupations due to employment growth and the need to replace workers who leave the occupations permanently.”
Not only that, the median annual wage for this group is $100,530 versus $46,310 for non-tech-related occupations. And almost none of the top tech jobs require more than a Bachelor’s degree. Bottom line: It’s good to be in IT. If, that is, you’re the hiree and not the hirer.
And while the most recent BLS report also indicates that the U.S. economy eliminated 189,000 tech jobs this year, “The usual caveats of monthly fluctuations in labor market data apply,” Tim Herbert, chief research officer at CompTIA, told Computer World. “The seesawing between strong and lagging tech jobs reports is undoubtedly confusing, but the overall macro trend of growth in the depth and breadth of the tech workforce remains steady.”
But companies are still having trouble finding and retaining IT talent. That won’t change for the foreseeable future. According to a Spiceworks survey, “63 percent of senior tech leaders (director level and above) believe it’s currently difficult to hire skilled IT talent, compared to 58 percent last year.” That won’t stop them from trying. The survey also indicates that IT hiring plans are up year-over-year, with 41 percent of organizations planning to increase the size of internal IT staff compared to 31 percent in 2022.
The same survey reveals that IT budgets are increasing at “most companies,” which means they’ll add more IT staff in 2024 as well. In fact, only 8 percent of respondents said they plan to shrink their staff size while 59 percent plan to do more hiring.
“Managers are especially in need of expertise for cloud and DevOps initiatives, digital transformation, security and privacy, development, AI, automation, system upgrades, and data integration and analytics,” according to talent recruiting firm Robert Half.
However, as this Fortune story notes, a rash of layoffs in the early part of 2023 likely means reduced salaries — which remain far above the national average. “With experienced tech professionals looking for work once again, salaries are likely to deflate and higher levels of experience and education will be required to secure employment. These corrections in the industry are potentially a sign it’s falling in line with other, more established parts of the market.”
There’s also a generational shift in the tech labor market, as this recent Forbes Business Council blog post explains. “The digital generation brings to companies a unique set of skills and attitudes that have an impact on the hiring industry,” “This is the first fully digital generation. On the other hand, there is a constant lack of top talent, all of whom companies of different levels—from startups to multinational corporations—are vying for.”
Additionally, the Forbes post claims education requirements are disappearing. That’s in line with the BLS report mentioned above, but in contradiction to this New York Times report published just three months earlier. There’s also a preference for younger talent, wages are rising, tech unemployment has dropped even further (it’s now hovering around 2 percent) and job openings are proliferating. Companies that are on the lookout for skilled IT professionals, the piece suggests, would do well to employ these and other methods in their searches:
- Analytics for data-driven decision-making
- Robotic process automation in tandem with AI to “search, select and rank promising candidates based on their skills and abilities, obtained from résumés and social networks without human assistance.”
- Chatbots for personnel selection
- Employee referral programs that offer bonuses or other incentives for referring talent.
In light of the ongoing talent shortage, it’s no surprise that more and more companies, particularly SMBs, are opting to outsource their IT functions. As a result, the global IT outsourcing market is growing at a rapid clip — most of all in the U.S. Here’s how, according to Statista:
- Revenue in the IT Outsourcing market is projected to reach $460.10 billion in 2023.
- Revenue is expected to show an annual growth rate (CAGR 2023-2028) of 11.07 percent, resulting in a market volume of $777.70 billion by 2028.
- The average Spend per Employee in the IT Outsourcing market is projected to reach $132.10 billion in 2023.
Some outsourcing trends for this year and beyond — many of which are detailed in this insightful LinkedIn post — include cloud computing, big data analysis, automation, cybersecurity and AI. That last one, in particular, is poised to have an outsize impact.
“IT outsourcing is expected to become an even more critical component of business operations,” the author, tech CEO Duncan Luong, writes — in line with other reports. “Businesses that recognize this trend and take action to capitalize on it now will be in a solid position to achieve success in the years to come. They can maintain a competitive edge in the market and keep improving their processes by relying on the knowledge of third-party providers rather than spending too much time learning about and implementing new technologies.”
About Mindsight
Mindsight is industry recognized for delivering secure IT solutions and thought leadership that address your infrastructure, cybersecurity, and communications needs. Our engineers are expert level only – and they’re known as the most respected and valued engineering team based in Chicago, serving medium-sized to enterprise organizations around the globe. That’s why clients trust Mindsight as an extension of their IT team.
Visit us at http://www.gomindsight.com