Tech Upgrades Lead to Hiring

Ann All

A few weeks back when IT Business Edge contributor Don Tennant interviewed Dice Holdings' CEO Scot Melland about the IT hiring outlook, Melland credited two factors for an improving labor market: companies resuming projects that were put on hold during the recession and an accelerating pace of technology upgrades. In fact, Melland said, if the increased demand continues, the market could suffer from IT skills shortages in 2011 and 2012.

CDW's recently released IT Monitor likewise found a growing number of IT decision makers more optimistic about hiring and budgets. Forty-eight percent of respondents expect increased budgets in the next six months, up 10 percentage points from the same period in 2009. Seventy-four percent of them expect to replace or install software for the second half of the year, up 5 percentage points from June 2009, while 68 percent plan to install or replace hardware. Large enterprises and the federal government were the most optimistic about budget increases.


Echoing Melland's point about the link between technology upgrades and hiring, 37 percent of big companies plan to add staff in 2010's second half, up 11 percentage points from a year earlier, and 29 percent of federal agencies plan to do so, up 9 percentage points from April.


Melland said companies appear to be shifting from hiring contractors to hiring more full-time staff:

... An interesting thing happened starting about the beginning of this year. We started to see a shift to more full-time hiring. Typically what happens is as the work and the labor market come back, you see a surge in temporary or contract hiring, and that's definitely true in technology. We saw that during the latter half of last year. In about March of this year, we started to see a shift in more full-time hiring. So what we think is going on out there is hiring overall is up in tech, but we're now starting to see companies shift from just hiring contractors or consulting firms to creating and managing their systems through hiring full-time professionals.

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