IT hiring expected to slow in second quarter

Chief information officers anticipate a slowdown in the hiring of information technology professionals in the second quarter of 2003, according to the Robert Half Technology IT Hiring Index.

Nine percent of executives surveyed plan to expand their IT departments in the coming months and 5 percent anticipate staff cutbacks. The net 4 percent hiring increase compares with a net 8 percent increase forecast last quarter. The majority of executives (86 percent) plan no change in hiring activity.

The national poll includes responses from more than 1,400 CIOs from a 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 provider of information technology professionals.

"Many IT executives are keeping hiring plans on hold as a result of continued economic uncertainty," said Katherine Spencer Lee, executive director of Robert Half Technology. "Firms remain focused on initiatives designed to reduce expenditures and maximize the performance of existing systems."

Lee added that some firms already at reduced staffing levels are responding to pent-up demand by hiring project professionals. "This strategy offers IT executives access to the technical talent required to meet growing workload demands without sacrificing flexibility in human resources management."

Those CIOs who plan to hire additional IT personnel in the upcoming quarter were asked to identify the primary factor driving the demand. More than half of the respondents (54 percent) cited business growth, followed by systems upgrades, which received 16 percent of the response. "Preparations for an economic upturn may be motivating firms to update their information systems," Lee said.

Executives from large companies, those with 1,000 or more employees, were most optimistic about their hiring plans. Eighteen percent of respondents at these firms said they expect to add personnel and 6 percent forecast staff reductions. The net 12 percent increase in hiring is well above the national average.

Skills in demand

When asked which technical skill set was most in demand within their IT departments, 28 percent of CIOs cited help desk/end-user support. Networking was identified as the second most sought-after specialty, receiving 23 percent of the response. Applications development ranked third among CIOs, with 11 percent of executives singling out this area of expertise.

"Companies nationwide seek technical support specialists who can assist with Windows 2000 or XP migrations and systems upgrades," Lee said. Within the technical support category, CIOs report the greatest demand for desktop support technicians and help desk specialists.

Lee noted that networking expertise also remains critical within IT departments as firms focus on securing corporate information systems and offering remote or wireless network access to an increasingly mobile workforce.

Regional outlook

The West North Central (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota) region is expected to lead the nation in technology hiring activity during the second quarter. Fifteen percent of CIOs plan to expand their IT departments and 3 percent anticipate personnel cutbacks. The net 12 percent increase is up six points from the region's first-quarter forecast.

"Technology executives in the West North Central region are reporting increased demand for midlevel business analysts and project managers, an indication that new projects are in the planning phase," Lee said. "Financial services firms in the region seek IT professionals experienced in disaster recovery and storage to assist in backing up vital customer data."

CIOs in the West South Central (Arkansas, Louisiana, Oklahoma and Texas) states also forecast hiring activity well above the national average. Thirteen percent of technology executives here expect to add staff and 4 percent anticipate reductions in head count, resulting in a net 9 percent hiring increase. "Insurance and health care companies in the West South Central region are seeking IT personnel to assist in meeting HIPAA regulations," Lee said.

The acronym HIPAA refers to the Health Insurance Portability and Accountability Act, which mandates standards for privacy and security for health care-related data.

Industries hiring

CIOs in the transportation and business services sectors also are optimistic about hiring in the second quarter. Sixteen percent of technology executives in both industries expect to add personnel while just 1 percent forecast staff reductions.

Employment activity is also expected to exceed the national average in the retail and finance, insurance and real estate industries. CIOs in each industry expect a net 6 percent hiring increase in the second quarter.