New Labor Department data finds that as companies made efforts to cut costs but sidestep rounds of layoffs, there was an eight percent increase in the number of companies reducing many of their employees’ hours in 2007.
Though analysts say that this isn’t yet happening in the bulk of IT departments–the exception being those that are closest to the housing crisis’ affected areas–some argue that this might be a good thing for CIOs to consider should they be looking for places to cut discretionary spending.
“This might be a good option for CIOs to explore, a way to keep the lights on and the machines running if they need to cut back on their investment budgets,” Alex Cullen vice president and research director of Forrester Research told eWEEK.
Yet, the Wall Street Journal warns Jan. 7 of the long-term effects of an economy too reliant on part-time labor. In Japan, where companies have gone on a “binge of hiring temps” in the past few years as it chugs out of its economic slump, more than a third of its labor force are categorized as “nonpermanent” workers, up from 23 percent in 1997 and 18 percent in 1987.
However, despite Japan’s economic expansion, because its wages have steadily fallen in the past decade, consumer spending and therefore corporate profits are not as healthy as they could be.
That said, observers still feel it is too soon to tell how, if at all, an economic slowdown could affect IT departments staffing levels.