What Can You Do with an IT Confidence Index?

By Donald Sears  |  Posted 2008-07-24 Print this article Print

Recruiting and staffing company Technisource, a subsidiary of the ginormous staffing company Spherion, says that IT worker confidence has "reached its lowest level since 2005," which is when it began tracking confidence in its own index, dubbed The IT Confidence Index (pdf). The latest index released this week charts confidence at 45.9 percent. In 2005, it was up at 55.5 percent. In the fourth quarter of 2007, it was at 56 percent.

Confidence, if you believe this is what the index actually measures, has shifted a whole lot since last year. I tend to think this is a very simplistic snapshot of IT workers' perception of what is going on around them, which, as something to report on, is rather difficult to define. Surveying 456 IT workers is an acceptable sampling for an index, but as to whether this has any impact on your day-to-day work or is a way to drum up recruiting and job searching because there is demand, I cannot tell, but I'm leaning toward recruiting.

Here's what Technisource finds important to highlight:

Results from the IT Employment Report:

--More than two-thirds (70 percent) of technology workers believe the economy is getting weaker, up 1 percentage point from the first quarter of 2008.

--Forty-two percent of technology workers are likely to look for a new job in the next year, compared with 39 percent from the previous quarter.

--More than half of technology workers (59 percent) believe that fewer jobs are available, an increase of 4 percentage points from the first quarter of 2008.

Confidence is a state of mind, so as a state of mind, you see many companies struggling with revenue, and you hear about layoffs across many industries and job types almost every day (especially in areas of the economy once thought stable). I'd feel less confident and a bit worried.

Dictionary.com has six separate definitions for confidence, ranging from "full trust; belief in the powers, trustworthiness, or reliability of a person or thing" to "a confidential communication" to "presumption; impudence".

This index is measuring perception. Like the winds on a Scottish golf course, perceptions can change quickly. Look at those numbers from 2007 that illustrate a quick shift. The problem is, what do you do after you look in to a mirror about perceptions? Don't panic would be my first advice. Technisource points out (with a little help from the Bureau of Labor Statistics) that IT is a very good place to be in general. IT employment is up 10 percent compared with a year ago. But numbers alone aren't the issue.

You may feel extremely confident in your job and your company, and then one Monday you come in and your boss is no longer your boss. Or you got reorganized. Or that critical project you were working on is no longer being funded. Whatever the unique situation, IT workers are always riding a roller coaster of confidence, and it will continue to fluctuate as long as IT serves business. As Brian Watson over at CIO Insight asks, are IT jobs recession-proof?

In looking at related research about IT spending, it seems to me that projects are being killed or put on the back burner. If you are seeing a steady increase in projects being dumped, and the budget-snipping scissors come out to cut costs every month, it's not surprising to see confidence dragging.

One thing is pretty clear from the spending research: Layoffs aren't happening at big rates for IT right now.

Here's the methodology for that 45.9 percent number Technisource calculates:

The Employee Confidence Index is calculated from the results of four components that reflect these aspects of employee confidence. For each component item a 'score' is calculated by taking the difference of the percentage of positive responses and the percentage of negative responses. These four scores are then averaged to indicate an overall level of employee confidence and is scaled from 0 (no confidence) to 100 (complete confidence). A reading above 50 indicates a positive confidence level.

Are you confident in your job?

UPDATE: Technisource got back to me with some questions I asked.

I wanted to know what an IT worker can do with an IT confidence index? How does Technisource think you should use it?

"The IT Confidence Index is used as a way for technology workers, as well as employers to gain a better understanding of the overall perception of the marketplace," said Alisia Genzler, regional vice president of Technisource. "Although every individual's situation varies, it gives IT workers an idea of what their peers think of current and future conditions. In fact, economists and decision-makers have the tendency to adjust their outlook and buying patterns based on certain consumer indices. Although one measurement doesn't explain the whole story, confidence indicators are known to influence behavior or train of thought. For example, an IT job seeker might read this report and feel more at ease with their current employer that 70 percent of those surveyed believe it is unlikely that they will lose their job. With 42 percent of technology workers reporting that they are likely to look for a new position, job seekers might think to themselves that things may not be as bad as economic headlines suggest."

So, essentially, it's good for holding up a mirror to the industry. Not so sure economists are looking at this index though. I think they're pretty busy right now.

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