What not to cut from IT budgets: Staff

Trimming budgets should not involve cutting or overloading personnel, industry watchers warn

As the economic crisis carries on and IT executives consider what to cut next, industry watchers warn against slashing staff resources.

It may seem inevitable to some that personnel pay the price during a budget crunch, but the dollars saved reducing head count or putting more work on an already overwhelmed staff could ultimately cost an IT department exponentially more, experts say.

"People are looking to manage their costs in IT a lot better, and many worry that means that people will have to potentially do layoffs. But the last thing IT departments want to do is lose embedded knowledge. That would be hard to salvage," says Andi Mann, research director at Enterprise Management Associates. (See related story on how to cut IT costs without hampering innovation.) 

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As the economic crisis carries on and IT executives consider what to cut next, industry watchers warn against slashing staff resources.

It may seem inevitable to some that personnel pay the price during a budget crunch, but the dollars saved reducing head count or putting more work on an already overwhelmed staff could ultimately cost an IT department exponentially more, experts say.

"People are looking to manage their costs in IT a lot better, and many worry that means that people will have to potentially do layoffs. But the last thing IT departments want to do is lose embedded knowledge. That would be hard to salvage," says Andi Mann, research director at Enterprise Management Associates. (See related story on how to cut IT costs without hampering innovation.) 

Gartner conducted a survey of 1,527 CIOs between September and December 2008, and the results showed that 72% of those polled believe they have the wrong people on staff or not enough of the right people to get the job done. Yet among CIO strategies listed, attracting and retaining personnel dropped from the third priority down to number eight.

"We think that is a mistake because in this environment when things are really uncertain, and they definitely are, you need your most flexible resource -- which is your people from an IT perspective -- to perform well," says Mark McDonald, group vice president and head of research in Gartner Executive Programs. "CIOs that had gone through a tried-and-true cost-cutting exercise decided to 'hold the line' on their people, but in a situation in which there is already a weakness among the personnel, planning to squeeze more out of them doesn’t make sense."

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