Strategic CIO // Team Building & Staffing
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12/3/2013
02:20 PM
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IT Jobs Outlook: Salary, Training Spending Rise

Increased spending on salaries, training, and budgets puts IT in a "sweet spot for employment and investment," says latest Society for Information Management data.

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Good news for IT employees, from frontline staff up to CIOs: Salaries are on the rise, businesses are spending more money on training, and IT budgets continue to increase.

Those results come from the 34th annual SIM IT Trends Study for 2013. The Society for Information Management (SIM) study is a based on a survey of 650 of the organization's members, with three-quarters of respondents saying they're the highest-ranking IT person inside their organization.

"It's a good time to be a geek: Salaries are increasing, money going to training is increasing -- which is typically a sign of employers trying to keep their IT people -- and we see turnover increasing, which is typically a sign of a healthy IT job market," Leon Kappelman, a professor at the College of Business at the University of North Texas who focuses on IT management issues, told us over the phone.

[What field needs graduates the most? Read Data Scientist: The Sexiest Job No One Has.]

"I see it in my kids getting jobs at 22, 23 years old, at $65,000 per year, with a $4,000 to $5,000 signing bonus, and getting two to three job offers," said Kappelman, who led the SIM study. "IT contract shops -- business is really good for them, too. All those things tell me that it's a good time to be in the IT job market."

Bolstering that finding is the fact that 20% of IT leaders told SIM that a skills shortage keeps them awake at night.

The SIM study's findings square with a recent survey, conducted by staffing firm TEKsystems, which found that a majority of CIOs expect to see IT budgets and IT employees' salaries rise in 2014.

Beyond better job prospects for IT newcomers, the SIM study also found multiple signs that CIOs are succeeding in doing what business executives have long demanded: bringing more of a business focus to IT operations. For starters, 45% of CIOs now report to the CEO, 27% to the CFO, and 9% to a business unit executive. Continuing a downward trend, only 14% now report to the COO.

Meanwhile, half of 160 CIOs -- answering an optional question in the study -- said that they meet with the CEO or CFO weekly, and a majority do so monthly. Furthermore, 82% of CIOs rated the quality of those interactions with CEOs or CFOs as being "very positive" or "highly positive."

"IT is becoming more customer focused, and that's one of my biggest takeaways from looking at several of the data points, including that one," said Kappelman. Even so, CIOs still face a perception problem with CEOs and CFOs. Kappelman cited studies by professional organizations that serve CEOs and CFOs, which found about 80% of executives still don't see IT as a competitive differentiator for their business.

Interestingly,  however, the SIM study also found that the top metrics used to gauge the success of internal IT projects were projects being delivered on time (a factor for 66% of respondents), projects being delivered on budget (50%), increased customer satisfaction (33%), meeting service-level agreements (30%), and productivity improvements (29%). Ranking much lower on the list: increasing the number of products and services (13%), creating innovative ideas (12%), and contributing to revenue growth (7%).

"So the message to senior management is, quit bitching about IT not being strategic, and change their incentives," said Kappelman. "If you want them to be more strategic, pay them to be more strategic."

For the first time, the annual SIM study didn't just ask CIOs about the most important IT management issue facing them or their business, but rather the most important issues facing them and their business. That distinction triggered some sharp differences.

Businesses' top investments in 2013, for example, were for analytics and business intelligence -- also CIOs' leading concern -- followed by customer relationship management software, cloud computing, and enterprise resource-planning applications. But when it came to information security, which CIOs ranked as their second biggest concern, it ranked only 14th in spending. Likewise, disaster recovery was CIOs' third greatest concern, but only in 11th place for IT spending.

Kappelman said that although the difference in importance of security and disaster recovery might seem alarming, it makes sense. "To IT, they're table stakes. I can't even talk about strategy, innovation, or anything like that if I'm not secure or don't have continuity if something breaks. You'd expect [security] to be a big priority for IT, because if something breaks, they lose their job. Similarly for disaster recovery, if a server goes down, the business shouldn't go down."

Overall, the study found that IT prioritizes technology projects that offer a lot of bang for the buck. "You see things like enterprise architecture and integration being of higher importance to IT, because IT can definitely make it more agile and help to save money. So even though they're not a big spend either, you can see why IT would want to make sure they went well, because it indirectly helps the business."

Although the SIM study's findings are good news both for IT employment and CIOs bringing more of a business focus to bear, the study results also raise the question of whether businesses' current levels of investment in hardware and software are sustainable. Past SIM studies -- especially in 2009 and 2010 -- found that a relatively low percentage of the IT budget was being invested in products and services, while much more was going into salaries. Kappelman says that was to be expected, because when times are tough, businesses can choose to not replace hardware, but would prefer to not slash their IT employee head counts.

Currently, however, the relative amount of the IT budget being invested in products and services has shot up. "We're in a sweet spot for employment and investment," Kappelman says. "I don't know exactly what to make of this, but I think we're in a catchup period, which is good for the vendors. But at the same time, I don't think it will last -- we'll just see where it goes."

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anon9927196658
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anon9927196658,
User Rank: Apprentice
12/4/2013 | 4:17:07 PM
Re: IT Skills Shortage
@Laurianne:

 

I respectfully disagree with your assertion that no CIO can build an effective team using a constantly rotating cast of specialists.  My observations are that CIO's should:

1.  Stop thinking long term.  Instead, think "Projects".  Today's business needs to be responsive to a constantly changing marketplace and technology that is 5 years old is outdated.

2.  Hire experts, not "generalists".  When you have a house built, you hire an expert for plumbing, another for electrical, and yet another for A/C.  You probably wouldn't want a team of "generalists" on the job.

3.  Test for specific skills when hiring.  If anything, expand requirements lists and test for those skills -- then be prepared to pay the specialists.

I suppose the fundamental disagreement between us is that you feel that CIO's need to build teams for the long-term and my experience (as a developer, manager, and business owner who has employed many developers) is that focusing tightly on requirements is the best way to maximize ROI in technology investments.
Laurianne
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Laurianne,
User Rank: Author
12/4/2013 | 10:09:10 AM
Re: IT Skills Shortage
IT will always need some specialists, but no CIO can build an effective team using a constantly rotating cast of specialists. The idea of hiring generalists, with diverse project experience, who can morph and grow with the team must become a more popular part of IT culture, in my opinion.
Paul in Orlando
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Paul in Orlando,
User Rank: Apprentice
12/4/2013 | 9:29:22 AM
Re: IT Skills Shortage
It's not that hiring managers won't open their minds or that requirements lists have gotten out of hand; rather, the proliferation of competing technologies and platforms has increasingly segmented the market.   For example, in the software development arena, a strong Java developer making $125K/yr isn't likely to be worth that salary to a hiring manager seeking to recruit for a php project.  Likewise, that Java expert most likely won't pursue work in a more junior python developer capacity where their lesser expertise makes them less valuable.

It's simply a matter of supply and demand: if hiring managers demand specialists, they're going to have to pay more for them.  The good news is that a specialized technology expert can be ten times more productive than a technology generalist selected from a wider pool of generalist candidates.  That's why the smartest thing that both technologists and businesses, alike, can do is to invest in technology education and training.
RobPreston
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RobPreston,
User Rank: Author
12/4/2013 | 9:25:47 AM
Re: IT Skills Shortage
A refreshing post from rradina. Thank you for weighing in. That his/her employer is a private company says something. Maybe it's because Dell and BMC have recently gone private, but I'm hearing a lot more these days about the virtues of working for a private company with a longer-term outlook.
SaneIT
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SaneIT,
User Rank: Ninja
12/4/2013 | 8:20:24 AM
Re: IT Skills Shortage
That is a very refreshing attitude to hear from any company leader.  I agree and try to promote this attitude as well but it often stops before it hits the executive level as they look at employee profiles like baseball cards.  I think as far as IT goes we are due for some type of apprentice, co-learning or career building style of path to bring up the skills that are lacking.  If you've got the aptitude but you don't have the skill yet I would rather have you on my team than having someone who has the skills on paper but doesn't get it or doesn't really want to be there.
samicksha
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samicksha,
User Rank: Strategist
12/4/2013 | 2:19:01 AM
Re: IT Skills Shortage
We are going through rapid transformations and new ideas, but parallel to same employee training is still lacking, i guess we need to match the pace of transformation with training employees accordingly. Yes Data science is emerging and asking more engineers but lack of skill still hold employees to get through interview.
rradina
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rradina,
User Rank: Ninja
12/3/2013 | 8:49:46 PM
Re: IT Skills Shortage
I recently converted from a contractor to an employee largely based on a motivational speech made by an IT VP.  He said they look for certain natural abilities in their IT employees rather than a specific technology skills. He claimed that someone with the right aptitude and drive can always be trained with new technical skills.  After nearly 30 years of maintaining the right skills to make sure I was "marketable", his words felt like salvation.  Finally, an organization that values employees and understands natural ability and aptitude are far more important than specific years of experience with this or that technology du jour.

Naturally I feel compelled to mention that this is NOT a publicly traded company that is forced to answer to those with limited patience and who probably leave a football game when their team isn't leading at the end of the first quarter!
Laurianne
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Laurianne,
User Rank: Author
12/3/2013 | 3:37:12 PM
IT Skills Shortage
20% of the CIOs said skills shortage keeps them up at night? That is sure to spur some debate among IT pros who are job hunting. Is there really a skills shortage?

Well, we know data science pros are in demand, certainly. But some companies still are crying shortage -- but, IT job hunters say, the hiring managers won't open their minds to a wide pool of candidates. Have the requirements lists gotten out of hand?
Kristin Burnham
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Kristin Burnham,
User Rank: Author
12/3/2013 | 3:14:19 PM
Meeting with CEO/CFO
Half of the CIOs said they meet with the CEO or CFO weekly, and that those interactions were "very positive" or "highly positive." Any CIOs want to weigh in here? Does the same ring true in your organization?
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