IT Staffing Levels Flat as Cloud Shifts Focus to Higher-Level Skills

June, 2017

IT operational budgets in 2017 are growing modestly, but that growth is not being mirrored in IT staffing levels, which are essentially flat at the median.

According to Computer Economics, fewer than half (49%) of all companies in its newly released IT Spending and Staffing Benchmarks 2017/2018 study are planning to increase IT headcount. This is an improvement over 2016 (46%) but a small drop from 2014 and 2015, when 52% and 50% of respondents, respectively, were adding to IT staff counts.

The shift to software as a service (SaaS), cloud infrastructure, virtualization, and increased automation of routine IT activities is allowing IT departments to increase service levels without adding staff. However, as shown in Figure 1-13 from the free executive summary, only 20% of IT organizations plan to reduce headcount, and we do not see widespread layoffs of IT personnel on the horizon.

ISS fig 1 13 - IT Staffing Levels Flat as Cloud Shifts Focus to Higher-Level Skills

Although IT staffing levels are flat at the median, it does not mean that IT organizations are not adding headcount for some positions. While hiring is slowing for lower-level skills such as computer operations, scheduling, and lower-level tech support positions, higher-level skills show increasing demand. Examples include business analysts, project managers, data analysts, and IT security professionals. As cloud applications and cloud infrastructure take up a larger percentage of IT spending, there is also a need for IT staff with skills in procurement and vendor management.

“As the cloud shifts hiring priorities, IT professionals need to be upgrading their skills,” said Tom Dunlap, director of research for Computer Economics of Irvine, Calif. “Fortunately, the cloud makes it easy to get those skills, whether by setting up a virtual server on Amazon Web Services, or by developing a new app on one of the cloud platforms, like Salesforce’s.”

The IT staffing mix continues to change, the survey finds. The largest portion of IT staff, as in the past, is dedicated to application development, accounting for 16.8% of the typical IT staff. The next largest group is IT managers, with 11.6%, followed by desktop support workers at 10.3%. Application maintenance/support has now reached 9.9% of the staff. While application developers and maintenance workers continue to grow,  server support headcount has seen a steady decrease in the last six years, from 12.1% of the total IT staff in 2012 to just 8.1% this year. Computer Economics attributes this decline to several factors, including increasing use of virtualization and automation tools that improve data center staff productivity, as well as the shifting of data center workloads to the cloud.

More evidence of the declining data center trend can be found in the overall IT spending mix. The survey shows that IT executives are investing more of their budgets in business applications, networking, security, and end-user devices. Data center spending is not much of a priority at all, with only 9% of IT departments planning to increase spending in this area.

The Computer Economics IT Spending and Staffing Benchmarks 2017/2018 study is based on a detailed survey of more than 200 IT executives in the U.S. and Canada on their IT spending and staffing plans for 2017/2018. It provides IT spending and staffing benchmarks for small, midsize, and large organizations and for 25 sectors and subsectors. A description of the study’s metrics, design, demographics, and methodology can be found in the free executive summary along with the key findings.

This Research Byte is a brief overview of the findings in our report, IT Spending and Staffing Benchmarks 2017/2018. The full 28-chapter report is available at no charge for Computer Economics clients. Individual chapters may be purchased by non-clients directly from our website (click for pricing).