The good news is that employers are reluctant to cut jobs, but it is not out of the question.
As senior business and IT leaders, CIOs were told they should
proactive in helping their organizations ride through economic
downturns at Forrester's Jan. 31 teleconference on preparing for a
recession.
"We're expecting a slight slowdown in the economy, but not a
recession," said Andrew Bartels, vice president and principle analyst
for Forrester.
However, the risk of an actual recession has increased, he
continued, thus it is best to be prepared with a good answer when the
CFO asks where expenses can be cut. The good news for IT professionals
is that reductions in headcount are neither anticipated, nor
recommended.
"With the exception of the two industries-housing and credit-that
are being the most hammered right now, nobody is looking at making job
cuts right now. What CIOs are going to try to do is shift their focus
from that of six months ago-how they were going to hire people, where
they would get them-and instead of going after people, going after
deferrable capital purchases," Alex Cullen, vice president and research
director of Forrester told eWEEK in an interview.
Making drastic reductions in headcount is ill-advised because it
will make it harder for IT departments to get back on their feet once
the period of negative economic growth has passed.
"The worst thing you can do is get so focused on cuts that when you
get out of the recession, you don't have what you need to move the
business forward," said Bartels.
However, this doesn't mean that certain IT roles are not at greater
risk than others. Contract employees have long been the first places
CIOs look when they need to trim excess fat, but Forrester warns
against doing this without caution.
"On one hand, CIOs view contractors as a buffer. On the other hand,
they'll be reluctant to make big changes. But contractors will be
affected before permanent employees will, and those in more
commoditized areas like help desk or application support are at greater
risk," said Cullen.
Offshore outsourcing has also been what CIOs considered an easy
place to save a few pennies when budget constraints came into play, but
there are several factors which make it less appealing than it once
was. For example, many CIOs have been burned in recent years by
offshored relationships. In addition, they stand to save less money
than they previously had.
"Our current economic condition is almost marked by the declining
dollar, which makes offshoring less attractive. CIOs need to be very
cautious before trying to save money by offshoring," said Cullen.
Right now, however, most IT professionals won't be seeing any signs
of recessionary cutbacks, but those in the very top echelons of a
business are currently making contingency plans. An employee might get
a request to identify the projects they are working on, and how close
they are to completion. CIOs are going to try to come up with
ways to save money.
"The best thing to do is find a way to get on those cost-cutting
projects, be as central to helping your business survive as possible,"
said Cullen.
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