The continuing uncertainty about the U.S. economy is impacting staffing levels at IT companies, according to the latest CompTIA IT Industry Business Confidence Index. In the quarterly survey, 54 percent of IT firms say they are understaffed by five percent or more. Another 22 percent of firms are fully staffed, but would like to hire more workers to expand their business.
The overall CompTIA IT Industry Business Confidence Index for the fourth quarter fell by 1.0 point to 51.9 on a 100-point scale. Although still in net positive territory (greater than 50), the report concluded that “economic malaise has clearly” set in. This marks the third consecutive quarterly decline in the confidence index this year. The survey found that looking ahead, the IT industry executives predict a 1.9 gain in the Index in the first quarter of 2012.
“This modest gain is lower than previous outlooks, which typically exceeded five points. It’s yet another sign of dimming confidence in a short-term fix to a shaky world economy,” Tim Herbert, vice president of research at CompTIA, said. The survey found relative to the rating for the overall economy, executives are more confident in the IT industry and their own firms, but Herbert noted that sentiment provides little solace, given the widening gap of opinions regarding the economy. “No industry operates in a vacuum, so even the relatively strong IT industry has felt the pain of global economic weakness,” he said.
Data from the survey suggest that staffing shortfalls are most prevalent among larger companies ($100 million or more in annual revenue). Micro firms – those with less than $1 million in annual revenue – are most likely to report being fully staffed at their desired levels. The report noted, however, that micro firms tend to operate with lean staffs, compared to larger firms that have more organizational layers and therefore may experience more frequent changes in headcount.
The impact of the staffing crunch is felt most directly by workers now on the job, with 55 percent of IT firms are requiring workers to multi-task more and 45 percent are requiring salaried workers to put in more hours, according to the survey. Nearly a third of companies (32 percent) say they’ve postponed or canceled projects due to staffing shortages.
Among the types of staff IT firms plan to hire or would like to hire, 56 percent of surveyed firms said programmers and application developers; 43 percent, help desk and support personnel; 41 percent, project managers; and 40 percent, sales staff. “Multiply this behavior across every industry sector and economic pessimism becomes a self-fulfilling prophecy,” Herbert said. “Firms refrain from spending, which signals to vendors a slowdown, which causes spending restraint in other areas. No one wants to move first. This vicious cycle ripples throughout the economy.”
Even when companies decide to act on filling their staffing needs, they struggle to find qualified candidates despite the large pool of unemployed workers. In the CompTIA survey, 74 percent of IT firms said it’s somewhat or very challenging finding quality candidates with the right skills and experience when openings must be filled. According to the report, stalled economic recovery is the biggest threat, identified by 54 percent of surveyed IT firms. Ranking second on the list of business threats is a general lack of confidence, cited by 45 percent of respondents.