02 Apr The Latest Insights for the Information Tech Services Industry
Kyle Griffith, CBI – The NYBB Group
Trend: Demand for Tech Talent Remains Strong
According to the Quarter 4 Industry Update from First Research by Dun & Bradstreet and M&A Source, the search for IT professionals remains strong in the U.S. The industry closed out 2018 with an estimated 83,500 new jobs and studies by Janco Associates indicated that the trend is expected to continue. While this presents the good omen of industry growth, for many company owners this could mean an increase in costs as well.
In a survey of two dozen CIOs, Janco found that 100% of respondents were actively looking for new IT professionals. In November, an estimated 7,600 jobs were added in IT services, custom software development and computer system design dropping the unemployment rate to 2.4%. This high demand for new tech talent can be tricky for employers because it creates an environment of intense competition for qualified employees.
Based on the high demand and a forecasted compounded 4% growth in revenues in the Information Technology Services industry between 2019 and 2023, companies may need to increase their wages to remain competitive in the market for dependable employees. According the report, “The expertise that IT companies sell to customers often resides in a few key individuals.” This can pose problems if these employees leave the company for any reason. In addition to staying competitive with wages, companies may need to increase their training and retention efforts in order to reduce the risks associated with a concentration of talent within a firm.
Firms are increasingly turning to foreign IT workers to bridge the gap. If American workers with similar skills can’t be found, companies can hire highly trained foreign workers with H-1B Visas. Currently, eligibility for this visa is limited to an annual cap of 65,000 unless the workers have a master degree or higher from a U.S. academic institution. While this increases the pool of skilled labor slightly for businesses in need, the increased need for employees coming from all angles continues to keep the pressure high.
While industry growth remains strong, the demand for skilled IT professionals also poses challenges. The rapid development in the industry means an ever changing need for more talent as other industries become more dependent on IT. If companies want to stay competitive in the current environment they need to be diligent about training employees well, keep wages appealing, and remain careful not to keep the talent pool within the firm too concentrated.
If you would like to discuss this article or schedule a private and complementary consultation, please contact Kyle at firstname.lastname@example.org or 631-339-0249.