Surveys Show New Trends in IT Employment and Productivity

Although the November government labor report shows lower-than-expected job growth and a rising overall unemployment rate, new surveys have found that IT hiring will slightly improve next year. In other news, a new survey concluded that North American businesses lose more than a quarter billion dollars annually to IT system downtime. Finally, industry researcher AIIM reported that the consumption of paper and the number of photocopies is finally starting to fall in some offices.

Focal Points:

• A new survey from Computer Economics Inc. reports that 48 percent of IT managers plan to add staff next year, while only 11 percent plan to reduce staff. Additionally, companies are starting to take on new IT projects, and are therefore extending staff hours, hiring contractors, and turning to outsourcing providers. The survey is based on responses from IT managers at 136 firms in the U.S. and Canada with revenues of more than $50 million, according to Computer Economics. Meanwhile, TechServe Alliance reported its monthly analysis of the U.S. Department of Labor (DOL) report. The IT industry group found that IT employment increased by only 600 jobs in November on a base of 3.9 million jobs, and that overall, employers added 39,000 jobs last month. TechServe also added that IT employment has only increased 2.5 percent this year. The Hackett Group, a business advisory and consulting firm, contributes some of these numbers to offshore outsourcing. According to the company, employers shift jobs offshore to save from 30 to 70 percent of worker costs within a brief period. Additionally, employers reap the most savings by moving entry-level position offshore.
• A study commissioned by CA Technologies Inc. found that North American businesses collectively lose $26.5 billion in revenue each year due to IT system downtime. This equates to an average loss of approximately $160,000. The study also found that the average company suffers 10 hours of IT system downtime a year (less than 99.9 percent availability), or more than 1.6 million hours across North America. During these periods of downtime, respondents said that their ability to generate revenue is reduced by 29 percent, and that after service is restored, an additional 7.5 hours of compromised operation is incurred to recover lost data. According to the survey, small companies suffer the most, with 39 percent showing the least ability to generate revenue, compared to 19 percent for medium companies and 28 percent for large companies. Small companies also struggle more during recovery time, with 23 percent reporting compared to 11 percent for medium and 18 percent for large. The study surveyed 200 small, medium, and large companies in the finance, manufacturing, public, and retail markets, CA reported.
• According to a new survey from AIIM, the consumption of paper and the number of photocopies is still growing in 27 percent of organizations, but is also starting to fall in 39 percent of organizations. Amongst those organizations with more extensive document scanning and capture operations, 53 percent are seeing a reduction, said AIIM. Respondents reported that the strongest driver for reducing paper is improved searching capability and knowledge sharing. This is followed by productivity improvements in document-centric business processes. Nearly 40 percent of respondents reported investment payback within 12 months of implementing systems for scanning and capture, rising to nearly 60 percent within 18 months. The survey is based on over 400 responses, and found that around half of organizations have enabled their systems for storage and retrieval of scanned documents. It also found that a quarter of organizations have integrated document capture within their business processes, and that users prefer in-house scanning and capture over outsourcing.

Experton Group believes 2011 will be a stronger economic year globally provided the European debt crises do not spread and worsen. This should bode well for hiring, especially in areas of application development, BI/analytics, project management, and security. While the market has been weak most of this year, there are signs that IT hiring is already picking up. The use of outsourcing will remain selective, as will any shift to off-premise cloud environments. If the CA study accurately depicts the IT environment in North America, then it shows the failure of IT executives to implement system solutions, including disaster recover/business continuity processes and systems, that effectively support the business.

IT executives in medium to large organizations should ensure their business- and mission-critical systems that exceed 99.9 percent availability as a minimum, with many systems operating at a 99.99 percent level or better. The world should be shifting away from paper documents and where they are necessary, they should be digitized as early as possible. The AIIM study shows the advantages of electronic documents. Experton Group believes the knowledge sharing and searching capabilities of electronic documents should incent executives to invest in the rapid conversion of paper to the digital world. IT executives should work with their business peers to build a business case for paper capture at the source, creation of knowledge bases, and utilization of digital documents only as part of the business processes and workflows.