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IT budgets up, but salary cuts still a concern: study

Among CIOs and IT executives surveyed, 13% expect to see salary cuts in 2013, reports the Society for Information Management (SIM)

By , Network World
October 24, 2012 05:18 PM ET

Network World - For IT leaders and their tech teams, it's business as usual. IT departments are still looking for ways to reduce costs, still trying to increase employee productivity, and still cautious about raising salaries, according to the latest survey data from the Society for Information Management (SIM).

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While maintaining the status quo is the prevailing sentiment, one area that showed marked change in 2012 is IT spending. Companies funneled more of their revenue to the IT department this year than they did in 2011, SIM reports.

In 2012, the average IT budget was 4.94% of corporate revenue, up from 3.55% in 2011 (and a full percentage point higher than the average rate of 3.84% measured over the past eight years). Looking ahead to 2013, 46% of respondents expect IT budgets to grow, 32% expect them to stay the same, and 22% expect a decline.

SIM, which counts 3,500 CIOs and IT executives among its ranks, is hosting its annual conference, SIMposium, next week in Grapevine, Texas. Here are 12 tech trends the organization highlighted in its annual IT survey.

* Staff turnover remains low. Turnover among IT employees has been consistently low over the last few years, at 5.2% in 2009, 5.5% in 2010, 5.51% in 2011, and 5.23% in 2012.

* CIOs are sticking around for longer terms. At the highest tier, IT pros are keeping their jobs longer than they have in the past. In 2012, CIOs said they've had their jobs for 6 years on average, up from 4.5 years in 2011 and 5.1 years in 2010. Over the last seven years, the average tenure of a CIO was 4.6 years.

* Salary cuts a reality for more IT staff. Salaries increased for 60% of IT staff in 2012. Meanwhile, 29% reported unchanged salaries, and 11% said salaries declined in 2012. One troubling trend: More respondents reported shrinking salaries in 2012 (11%) than in 2011 (8%), and an even larger percentage (13%) expects to see salary cuts in 2013.

* Personnel costs consume the lion's share of IT funds. Where does the money go? A breakdown of 2012 IT budget allocations shows about 60% of monies are spent on people, including staff and consultants.

BUDGET BREAKDOWN

Internal domestic staff: 33%

Internal offshore staff: 6%

Outsourced domestic staff: 8%

Outsourced offshore staff: 3%

Consulting services: 9%

In-house hardware, network, software, facilities and asset depreciation: 24%

Outsourced hardware, network and software: 14%

* Outsourcing expenditures to climb in 2013. The percentage of budgets allocated to offshore outsourcing is expected to climb in 2013, according to respondents. It has generally hovered in the 4% range in recent years, falling to a low of 2% in 2011. In 2012, the percentage of IT budgets allocated to offshore outsourcing climbed to 5%, and respondents expect it to consume 7% of IT budgets in 2013. By geography, the largest percentage of offshore outsourcing work goes to India (43%), followed by western EU (13%), Philippines (12%) and eastern EU (6%).

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