Fast-paced growth in the Information Technology (IT) industry and low unemployment rates for technology workers are making it difficult for corporate executives to find qualified hires.
Add to that a bullish frenzy of investor support and corporate acquisitions as key factors driving the continued growth of the technology industry.
The global IT market totaled more than US$3.7 trillion in 2014 — and the U.S. market accounts for approximately 28 percent of that total, according to research firm IDC. The U.S. portion of $1 trillion includes hardware, software, IT services and telecommunications.
Nearly 70 percent of IT executives expect to face a very challenging hiring environment this year, according to CompTIA’s Industry Outlook 2015 report. That study also found that 43 percent of IT companies are currently understaffed.
More so, 36 percent of the companies in the study are fully staffed, but are looking to hire to support business expansion and growth. Another one in five companies has postponed or canceled projects due to understaffing.
Meanwhile, technology mergers and acquisition spending in 2015 are likely to continue at the record pace set last year, according to a new report from 451 Research.
“For a while now the IT industry has outperformed other industries and the general economy. I think the trends we are seeing are also starting to happen in other industries as well. But IT and Technology are still leading those,” Seth Robinson, Vice President of technology Analysis at CompTIA, told TechNewsWorld.
IT Employment Outlook
The national unemployment rate stood at 5.5 percent in December 2014. That rate dropped 14 percent from 6.6 percent during the same period in 2013. The unemployment rate for the IT industry continues to remain far lower than the national rate, according to the CompTIA report.
A strong demand for certain skill sets coupled with the low unemployment rate for IT workers can create a challenging hiring environment. The study found that 68 percent of IT company executives say they expect to face a challenging or very challenging hiring environment for technical positions this year.
Labor reports cite U.S. businesses posted job notices for some 580,000 core IT jobs during the last quarter of 2014. This showed a slight increase over the third quarter.
Some of the hiring increase reflects companies that may be expanding or moving into new areas and need to employ more workers. Other factors include workforce turnover caused by retirement as well as employees leaving to pursue other work opportunities, according to CompTIA.
Worldwide IT industry growth will reach 5 percent with upside potential of 7.3 percent, predicted CompTIA. This is an increase over last year’s forecast of 3.4 percent.
The growth in Canada and the UK is projected to lag slightly. Business executives interviewed for this study expect the U.S. growth rate to otherwise mirror the global rate, according to the report.
“It has been a rosy picture for a while. It is warming up this year after a slight dip. So this is good news,” Robinson said.
Technology mergers and acquisitions reflect the hiring impact for IT workers, agreed Brenon Daly, Research Director for Financials at 451 Research. His M&A Outlook Report cites bullish sentiment from bankers and acquirers among the factors that could propel M&A to meet or exceed records.
Security, mobility and cloud computing are among the sectors likely to see intense interest from growth-hungry strategic and financial acquirers.
“This M&A outlook is far more employee driven than it has ever been before,” Daly told TechNewsWorld.
“Keep in mind the change that happened among large-cap technology buyers. You see large transactions and the aqui-hires,” said Daly.
“That is a new development. You cannot hire en mass. You run your HR departments through M&A. That is new. This is something we have not seen among large-cap buyers like Google, Facebook, Twitter, Dropbox and Box,” he added.
Those companies are well capitalized and have the resources through record levels of cash flow. In many cases they also have equity prices and traffic currency to recruit.
“They also have unfilled positions. You put that together, and you have the resources and the need,” Daly said about the technology industry and the M&A outlook.