More Good News for 2012 IT Job Trends

by JIm Staats | Oct 05, 2011

Hiring forecasts are typically done years, not months, in advance. How then does one factor the twists and turns of real life into the mix? By having long-range predictions and latest studies at your fingertips to make informed career decisions. Which is exactly what we’ve tried to do here.

As 2011 stutter-steps to a conclusion, good news can be found on balance sheets of some of the largest and most influential IT companies in the U.S.: income and revenue remains high with signs for continued growth, a good bellweather for the industry as a whole.

Figures from a recent study show steadily improving economic data since late 2010 from IT giants, including IBM, Hewlett-Packard Co., Microsoft Corp. and Oracle, based on corporate earnings and hiring numbers.

The study, The End of the IT Spending Squeeze, Predictions for Corporate Spending on Hardware, Software and the IT Workforce, from Chicago-based IT management and tech consulting firm Maven Wave Partners LLC, predicts continued IT hiring upticks through 2012 based on good early returns this year from those key vendors.

Maven Wave partner Brian Farrar calls it the “$2.40 rule.”

What that means, according to Farrar, is that for every $1 a company spends on employee labor, it spends another $2.40 on hardware and software costs for those new employees. Downturns lead to layoffs which, in turn, lead to IT spending cutbacks with less workers needing such investments. Those cutbacks have been in decline recently, Farrar said.

“That’s what gave us the confidence that the (IT spending) freeze is over,” he said. “It means that people will again start investing in IT, and that is in fact what is happening.

IT spending during the recession focused on cost reduction as companies sought to “stop the bleeding” in its earnings by doing more with less. Projected IT spending is now projected to increase by 16.9 percent, according to the study.

Data was compiled using a sample set of tech vendors and forecasting revenue for each based on their own comments to financial press, customers and research done by Maven Wave, Farrar said.

Are We Competitive?

In another study, released this month, the U.S. continues to set the bar for excellence in IT firms, but new powerhouses are emerging, including Malaysia and India.

The IT Industry Competitiveness Index, presented by Business Software Alliance, put the U.S. at the top of a ranking system of IT environments for 66 nations.

“The U.S. remains No. 1 in this index, in terms of building a really strong IT ecosystem,” said Matthew Reid, BSA’s vice president of communications. “This is a bright spot in the U.S. economy.”

The U.S., in this index, is followed by Finland, Singapore, Sweden, the U.K., Denmark and Canada. Ireland and Australia tied for eighth with the Netherlands and Israel in a tie for 10th. The index measures government and private-sector support for IT through indicators including business environment, infrastructure, human capital, research and development and public support.

A new worldwide shift is in the offing, the index supports, as more countries increase investments in grown IT industries, according to the study. Malaysia moved up 11 spots in the ranking to No. 31, while India moved up 10 spots to No. 34. Singapore made a jump of six spots to its third-place ranking while Poland moved up five spots to No. 30.

Cloud Experts in Demand

Cloud computing....grid as a service (SaaS). This field by any name continues to expand within the industry along hiring projections for professionals who can latch on to cloud-defined roles, according to a recent report in ComputerUser magazine.

Expect cloud computing implementations among small and medium-sized businesses to continue trending upward, states the report, based on actualized benefits including greater efficiency, simplicity and the all-important money savings. These firms, which traditionally don’t have a lot to spend on IT resources, can accomplish a lot in cloud computing through the use of application service providers and hosted or managed service organizations. Opportunities in this area continue to be on the rise.

More than a Million Jobs to Be Created

What if we step back and look at the 10-year-out occupational employment projects of the U.S. Bureau of Labor Statistics running through 2012?

Early projections given proper credence, employment in professional occupations was forecast at the time to grow the fastest and add more workers (6.5 million) than any other major group. Broken down to its subgroups, the areas of education and training, healthcare and technical and computer and mathematical were predicted to account for three-quarters of that job growth. Computer-related occupations were expected to account for an added 1.1 million jobs, the bureau’s study indicated, based on continued advances in computer design and Internet-related industries.

What wasn’t forecast early on was technical growth in traditionally non-technical arenas, such as healthcare.

Flush with federal funds and under the gun of federal regulatory deadlines, the healthcare industry is leading the market in IT jobs creation, according to the same bureau’s job placement services.

According to a recent report in Computerworld, the agency projects that IT jobs in healthcare are expected to grow by 20 percent per year through 2018. Currently, there are 176,090 IT jobs in healthcare, according to the agency.

“The definition of an IT professional has changed from a pure play to a subject-matter expert,” said David Foote, founder and CEO of labor research firm, Foote Partners, which has studied the trend.

In the past nine months alone, the number of IT jobs within the industry has increased by 123,000, according to Foote research.

Top IT applications forecast for 2012 and beyond?

According to a survey of 110 CIOs and other technology executives reported in CIO Insight, the top-tier applications expected to be given utmost attention in the coming year include business intelligence/analytics, productivity/collaboration, sales, financial and social media. The survey also reports a third of respondents also expect to implement at least four cloud applications in the coming couple of years.

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