Modest Job Growth in the Cards

Although more than four in 10 executives at technology companies that KPMG polled said their firms’ workforces have increased from this time last year—and about a third said employment has remained the same in this stretch—this year’s forecast is for continued but mainly modest growth.

For the second year in a row, tech executives surveyed by KPMG said they expect the United States to have the highest percentage of employment growth over the next two years. This year, China replaced India as the second-highest market for employment growth during that period. Tech executives also said they anticipate that the United States will lead in revenue and R&D growth in the next two years.

Almost three-fourths of IT recruiters and hiring managers expect to increase hiring in the second half of 2012, the Dice survey shows. But, again, “moderate growth” in hiring is the operative term.

More than half of IT recruiters and hiring managers surveyed by Dice expect salaries to be up slightly from last year, while more than a third said they would stay the same. Interestingly, while only 2 percent expect significant gains in salaries, the same percentage anticipate a drop in pay.

Job turnover is where employee caution is clear. This caution results from the perception of weakness in the overall economy, said Dice Senior Vice President Tom Silver. “Tech people aren’t moving around as much as they might have in the past. The expected increase in turnover hasn’t happened.”

For the second year in a row, tech executives have pushed out their projections for a U.S. economic recovery, according to KPMG. About two-thirds of the tech execs whom KPMG polled do not see a full recovery before the end of 2014.

KPMG found in both its 2011 and 2012 studies that 77 percent of tech executives expect revenue at their companies to be higher within a year. This year, though, 67 percent said their revenue would be up modestly, compared with 60 percent in the 2011 study. The percentage of this year’s respondents, who said growth would be about the same, was little changed from last year’s figure. Only a small percentage of respondents in both the 2011 and 2012 surveys expected revenue to decline.

Seven out of 10 of the tech execs KPMG polled expect their companies’ research and development spending to increase, but most foresee modest gains on this count—with 42 percent anticipating an increase of 1 to 5 percent, up from 34 percent in last year’s study.

More than half the tech executives KPMG surveyed anticipate overall growth in capital spending, similar to last year’s figure. But this year, 27 percent said they expect capital investments to rise about 1 to 5 percent in the next year, compared with 22 percent in the 2011 study. In both years, more than a third said capex would be about the same.