IT Recession Survivors Brace for Recovery

If you're among those hoping the recession's over for IT, brace yourself: The recovery may be just as tough.

IT jobs lost as part of the restructuring that most global firms have undertaken likely won't be coming back, and new skills will be required of the IT professionals who've retained their jobs, according to a recent report from strategic advisory firm The Hackett Group.

Of the estimated 3.6 million jobs in the "general and administrative" (G&A) category that have been lost since 2000 and are projected to be lost through 2014, more than half are in IT, the report states. (Most jobs in all areas, including IT, were lost in the last 12 months.)

The Hackett Group based its information on the reported and projected actions of 4,000 respondents in global enterprises.

Data from survey of 4,000 global enterprises. Source: The Hackett Group

For companies in North America and Europe, job cuts have accompanied a fresh focus on outsourced help in IT as well as other G&A areas, and that trend is likely to persist. "The post-recession environment can best be characterized by a net transfer of US and European G&A jobs to low-cost, offshore geographies," the Hackett report states.

This echoes another recent report from Gartner Inc. , in which more than 91 percent of 195 "decision makers" surveyed reported "either declining or flat IT staffing levels."

For many companies, outsourced IT jobs have set the stage for permanent use of offshore, contracted talent.

Back at headquarters, IT professionals need to refocus their attention on three main items, in The Hackett Group's view:

• Service delivery models. IT's main job during the recovery will be to boost the efficiency of the services they provide to their organizations.
• Productivity. IT must focus on streamlining production of goods and services by making the right tech choices.
• Outsourcing. IT must continue to choose offshore alternatives to expensive in-house staffing in order to sustain the cost reductions that have been realized during the recession.

While these suggested focal points hold across industry lines, there's evidence that certain verticals will sustain more IT growth than others. Alternative energy technology firms and government agencies, particularly those involved with healthcare reporting, are likely to be the most fertile fields for IT career-seekers.

"All these industries are hugely dependent on information and knowledge, and constrained by the total number of highly educated engineers that can be produced and recruited," the Hackett Group report states. However, the firm cautions against making too much of these vertical opportunities: "This high-tech growth cannot by itself offset the millions of jobs lost in construction, financial services, real estate, automotive and other manufacturing industries, and in corporate back offices."

Gartner's report on 2010 IT spending maintains that of all vertical markets, financial services spends the most on IT products and services, followed by the public sector. Those segments will spend 3 percent and 4 percent more in 2010, respectively, than in 2009.

So take a deep breath. You may have been lucky enough to survive the recession so far, but the recovery will prove to be just as challenging.

— Mary Jander, ThinkerNet Editor, Internet Evolution

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