Hiring of IT Pros slows as CFOs and CIOs become cautious says Janco
CFOs and CIOs gear for an economic slowdown Janco reports
Janco cuts its forecast of 2022 IT Job Market growth from 203K to 179K
Park City, UT – Janco Associates, Inc. – Janco reports that September saw a noticeable slowing in the hiring of IT Pros. Only 3,500 new IT jobs were added to the IT job market in September along with a reduction of 17,800 of the jobs created (per BLS data) in the prior two months.
According to the latest BLS data, analyzed by Janco, there are now 3.96 million jobs for IT Professionals in the US. For 25 months in a row, there has been an increase in the number of jobs added to the IT job market. Janco sees this trend continuing but at a much slower pace.
Janco has reduced its September forecast for IT job market growth to 179,000 from 203,900 in its August forecast for CY 2022. That will be significantly less growth than in 2021 but still at record-high levels.
The CEO of Janco, M. Victor Janulaitis said, “Based on our analysis, the IT job market and opportunities for IT professionals will continue to be positive but not as broad in scope as in the first 9 months of 2022. CIOs are still posturing to hire staff and expand technologies to address blockchain processing and security applications based on market conditions. However, most hiring will be limited to filling positions open due to attrition, not staff expansion.”
He said, “CIOs and CFOs see dual challenges of Inflation and an economic downturn. They are reluctant to hire replacements at salaries that are significantly higher than those who left. We believe that salaries for IT Pros in 2023 will be 5-6% salary above existing levels. Salary compression has occurred from the earlier hiring efforts with new employees being paid more than existing employees. That has impacted existing employee morale due to the inflationary status that the US economy is in. Higher attrition rates are a direct result. The challenge CIOs face will be how to keep the balance between the existing budget, providing salary increases for current employees that address inflation and higher commuting costs, and having sufficient resources available to achieve the enterprise’s technology and bottom-line objectives while facing those challenges.“
The CEO added, “In our Mid Year 2022 IT Salary Survey, we have found IT salaries for existing IT staff and middle managers increased by just under 3% while new hires were paid 5-6% more than existing staff. In conversation with several CIOs, we learned that starting pay rates for new hires were in the 8-10% range a few months back, but this is not the case currently.”
Janulaitis said, “CIOs and CFOs now are more cautious than they were in the first half of the year. CIOs do not have a clear understanding of how a downturn will impact their bottom line. Most still are hiring but at a slower pace. Some companies have stopped hiring and started laying off employees. With all that, the IT job market remains tight with an average of 200,000 IT professionals' jobs that are not filled due to a lack of qualified candidates. The number of unfilled IT jobs has peaked from over 260K in April to close to 200K in September. That should still be enough of a buffer to keep hiring IT pros on a positive track.”
Job growth in the IT job market is on the positive for each month for over a year. In the last 12 months 1876K jobs have been added to the IT job market. Trend line for number of IT jobs added is positive but declining.
CIOs and CFOs have started to slow the rate of creating new IT jobs and hiring IT Pros. Inflation and recessionary trends are driving this.
Current IT Hiring Plans
The treat of an economic downturn, inflation, high energy cost, and the continued war in Europe will dampen hiring for IT pros over the the next few quarters.
Janco is an international consulting firm that follows issues that concern CIOs and CFOs. The firm publishes a series of IT and business Infrastructure HandiGuides® and Templates including IT Infrastructure Policies and Procedures, Disaster Recovery/Business Continuity Template, Security Template, IT Job Descriptions, and its semi-annual IT Salary Survey.