IT Hiring And Salaries On The Rise For 2014

December 9, 2013 Timothy Prickett Morgan

It is that time of the year again, when all of us look at how we did this year and wonder if we are going to better than this next year. For the IT departments in the United States, the outlook is a good one, according to the latest data coming out of Computer Economics.

The company has just completed its annual survey of 140 IT shops in the United States, and it looks like companies are expecting that inflation will go up a tiny bit in 2014. Inflation will be kept in check by the relatively high unemployment rate, which fell to 7 percent of the workforce in November according to the latest report from the Bureau of Labor Statistics. The pressure from unemployment in the economy in general will hold the inflation rate down, and that means all of us will see lower pay increases than might otherwise happen. The good news is that there is a pay increase that could meet or exceed the inflation rate. Here’s how it breaks down across those IT shops surveyed by Computer Economics:

The average pay increase, as you can see, is for 3 percent in 2014 compared to this year, and this is an average across 69 different IT job functions at the companies surveyed. Obviously, such averaging washes out a lot of differences between the 400 metropolitan areas modeled in the Computer Economics salary report and those job functions. The report, which you can get here, combines data from the annual salary survey, which was conducted in October, the spending outlook survey that Computer Economics does, and compensation data from the Department of Labor.

Not only are salaries on the rise, but so is hiring, which is good news for IT departments that have been stretched thin since the job cuts in the wake of the Great Recession. To get a sense of IT spending and staffing plans, Computer Economics polled 137 IT organizations worldwide, with 82 of them from North America, and from that ginned up the following chart, that shows hiring and firing expectations in the United States and Canada next year:

Slightly less than half of the companies polled in North America say they will increase their IT staff headcount in 2014, and 42 percent say they are not making any changes. Only 9 percent say they are going to be making cuts. The net trend–increase minus decrease–is a 40 point spread this year, compared to a 25 point spread in 2013’s IT spending and staffing survey.

Much of the staffing is not permanent, however, so don’t get too excited.

“IT staff headcount has been slowly improving over the last two years among large organizations, but much of those gains have been in the form of an expansion in the use of temporary contract IT workers,” writes John Longwell, vice president of research at Computer Economics. “It is not clear whether this trend will continue. The study counts both temporary and permanent workers as part of the IT staff headcount.”

Longwell says that the budget and debt ceiling issues in Washington did not put a dent into the IT job prospects, and adds that thanks to consumer spending, the retail and wholesale sectors of the U.S. economy are the ones that are most aggressively hiring IT people. Financial services firms are forecasting above-average IT operating budgets, and those in the manufacturing and professional services sectors are expecting to grow as well. The key thing to note are the words operating budgets. There is a shift going on for some workloads to be moved to the cloud and out of the datacenter, and still other applications are being purchases as services rather than installed internally on owned systems. You can find out more details about the trends in the Outlook for IT Spending and Staffing in 2014 report.