Hiring Outlook Better, But Not Great

By Allen Bernard

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Eleven percent of chief information officers (CIOs) interviewed for Robert Half Technology's Information Technology Hiring Index and Skills Report plan to add full-time staff to their information technology (IT) departments in the second quarter of 2004, while only 2 percent anticipate personnel reductions.

Eighty-seven percent of survey respondents, however, expect to maintain current staff levels in the upcoming quarter. The net 9 percent hiring increase compares with a net 3 percent forecast last quarter and is the largest net increase reflected in the survey since the third quarter of 2002.

The national poll includes responses from more than 1,400 CIOs from a stratified 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 IT professionals on a project and full-time basis.

Key findings of the survey also include:

  • Business expansion continues to be the leading factor driving IT hiring and its influence is growing. It was cited by nearly 25% more respondents than in last quarter's survey.

  • CIOs in the Pacific states are most optimistic about future hiring activity, followed closely by those in the South Atlantic region.

  • Networking is the specialization experiencing the strongest growth.
  • "A growing number of CIOs are recognizing the need to increase staff in order to accommodate business growth, improve customer support, and address systems security concerns and regulatory requirements," said Katherine Spencer Lee, executive director of Robert Half Technology. "But many executives remain cautious about hiring full-time staff, frequently choosing to use project professionals to handle rising workloads as they watch for signs of continued economic expansion."

    Among CIOs who plan to hire in the second quarter, 46 percent said business growth is the primary factor driving their decision, up from 37 percent in last quarter's survey. Twenty percent of respondents cited a heightened focus on customer and end-user support as the major impetus for hiring.

    Skills in Demand

    When asked which technical skill sets were in shortest supply within their IT departments, 79 percent of CIOs reported a need for Microsoft Windows (NT/2000/XP) administrators. SQL Server administration was also a sought-after skill, receiving 39 percent of the response. Thirty-four percent of executives selected Cisco network administration as a high-demand area of expertise. (Note: Survey respondents were allowed multiple answers.)

    When CIOs were asked which specialties were most in demand within their IT departments, 21 percent said networking.

    "Network architects and engineers with security expertise are highly valued," Lee explained. "A growing number of companies are upgrading outdated systems, and executives also want to ensure that their networks are secure from attacks by the latest virus or worm."

    Help desk/end-user support was identified as the second most sought-after job category, with 16 percent of the response. Applications development ranked third with 11 percent of executives singling out this area of expertise.

    Regional Outlook

    The Pacific region -- Alaska, California, Hawaii, Oregon, Washington -- is expected to lead the nation in technology hiring activity during the second quarter. Fourteen percent of CIOs plan to expand their IT departments and one percent anticipate personnel cutbacks. The net 13% increase is up 12 points from the region's first-quarter forecast.

    "The strong showing in the Pacific states is in contrast with the prior two quarters when hiring optimism was relatively low in the region. This is a welcome trend as the area has historically been a leader in the creation of IT jobs," Lee said. "Growth in the IT and biotechnology industries as well as increased venture capital investment are stimulating hiring in the region."

    CIOs in the South Atlantic -- Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia -- also forecast hiring activity well above the national average. Fifteen percent of technology executives in this region expect to add staff, and 3 percent anticipate reductions in personnel, resulting in a net 12% hiring increase.

    Industries Hiring

    CIOs in the retail sector are the most optimistic of any industry about hiring in the second quarter. Seventeen percent of CIOs in this segment expect to increase hiring, while 2 percent plan to cut staff. The 15% net increase is six percentage points above the national average for all industries.

    Also well above the national average is the business services sector. Fourteen percent of technology executives expect to add personnel, while none anticipate staff reductions.

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