The midyear state of the IT job market

The tech market is booming and that's good news for today's tech workers. Employers, CIOs and IT leaders, however, are facing many challenges. We spoke with David Foote, from Foote Partners, to help companies identify, avoid and overcome these obstacles.

it workforce hiring trends
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With the Fourth of July quickly approaching, it's time to look at the state of IT hiring for the first half of the year to try and build an accurate hiring plan for the remainder of 2015. To help us better understand the state of IT across the U.S, we spoke with David Foote, chief analyst and research officer with Foote Partners, to get insight into what's going on inside IT organizations.

Each quarter Foote Partners compiles data from more than 2,705 employers, in both the public and private sectors, consisting of over 203,000 U.S. and Canadian IT professionals to create its "IT Skills and Certifications Pay Index (ITSCPI)." The report tracks 202 jobs and associated pay premiums for over 774 certified and noncertified IT skills. This data gives IT leaders an opportunity to see salary benchmarks levels for tech workers allowing them to make better decisions when hiring and evaluating tech talent.

Unemployment numbers

Unemployment in the tech sector in March was at 2.0 percent, the lowest since 2008, increasing competition for talent and salaries in an already challenging marketplace. According to Foote Partner data, there is instability in the pay and demand for IT skills, both certified and noncertified, and this is creating stiff competition for top tech talent. "What continues to surprise Foote Partners' analysts is the persistently high volatility in pay and demand for IT skills. High volatility signals intense competition in the market place with specialized skills and that will likely not change in the future," writes Foote Partners in its ITSCPI report.

Contingent model morphing as services market matures

"Full-time job creation has picked up in the past year as human capital architecture, aka. 'people architecture,' discipline and practices have been adopted and employers have made strategic decisions to reduce the size of their contingent workforces," says Foote.

According to Foote, the contingent model is morphing to a full-time model but that model will likely morph to a place where consultants are used more as end-to-end solutions as opposed to being used on one-off projects as organizations are more comfortable with the maturing services market. "We're getting into a situation now where you're going to be purchasing more B2B applications in mobile application stores," says Foote.

Businesses, now feeling more familiar and comfortable with the services model, will continue to move to this way to better facilitate agility, innovation and cost savings. "Companies have been experimenting with this model for 10 years and they are just now getting comfortable with them," says Foote. "More services, Cloud, IaaS, Paas and SaaS are being consumed by employers as a strategy for controlling the skills gap while also allowing employers to aggressively transform their IT workforce to emphasize flexibility and agility."

IT skills gap remains

You've been hearing about the IT skills gap for a while now and it's no surprise, according to Foote. There will always be skills gaps as labor and skills traditionally lag behind innovation and new technology by 6-12 months. There are definite areas within IT currently feeling that gap like cloud services for example.

"There simply aren't enough people to manage in this fairly new world where we've really adopted en masse Paas, Saas and Iaas," says Foote. "The skills gap is shifting to different classes of workers - architects; analysts; program, project and vendor relationship managers; software engineers; and a variety of technical specialization," says Foote.

However, he continues, organizations are also blame for failing to integrate business strategy with IT labor planning and forecasting. Companies need to do a better job planning for staffing requirements and growing their talent internally. "A lot of times companies just don't think about growing talent. They're not thinking about what they are going to need going forward so they're always in this perpetual problem," says Foote.

IT needs better workforce plans

The pace of change happens too quickly for employers to keep up, and they aren't using the lessons learned elsewhere, Foote says. "Architecture principles and practices have been successfully applied to technology planning and acquisition for decades, with budgets and execution generally tied to accurate, well-thought-out forecasts and analyses including integration strategies with legacy systems. But employers have not applied the same practices to analyzing, developing, and/or acquiring skills and talent. This has widened the skills gaps in recent years and created demand for a contingent workforce of consultants, contractors and other temporary workers."

Organizations looking to build a better strategy should do so within the framework of a human capital architecture, he says, and these are the areas where they need to focus their attention.

  • Reorganizing the underlying thinking about tech professionals around broad, horizontal IT roles rather than hundreds of siloed job titles.
  • Building capabilities for attracting and retaining key IT professionals during rapidly transforming IT workforce models.
  • Building career models, paths and global standards more logically defined for building skill proficiencies in technical, business and soft skills that are necessary to move workers more effectively through career paths. "More companies are engaging in strategies to split process management and people management into different promotion tracks to give the ICs their choice," says Foote.
  • Creating alternate career paths or mapping out how workers can logically jump career paths instead of simply climbing up the ladder in their current path. "A big improvement given how IT careers typically migrate in 2014.
  • Getting people paid appropriately to true local market levels.
  • Building internally branded employment strategies for developing key IT talent while filling workforce gaps with contingent workers.
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