What Does the Future of IT Hiring Look Like?

After 18 dismal, dark months, there are glimmers of encouragement in the IT hiring environment. These aren’t big, wholesale changes in what has been a year and a half of turmoil and bad news. Rather, they are small indicators that employers may believe the worst is over and are looking for a return to business as usual this year, according to the views captured in the latest hiring survey from tech job search site Dice.

The survey, which saw responses from 850 HR professionals and recruiters who focus primarily on technology professionals, shows a clear, though not overwhelming, change in hiring attitudes and trends, especially in comparison with surveys conducted six months and a year ago.

Examining predictions about layoffs is one gauge of optimism. Only 30 percent of respondents think that layoffs at their companies are likely in the next six months. While that’s still too many, it’s a sizable drop from a year ago. Back then, nearly half of the respondents were expecting layoffs — and, indeed, half the companies have reported layoffs in the past 12 months.

Another way to look at expectations about layoffs is to consider how many people don’t think job cuts are coming. Some 55 percent of respondents said layoffs are unlikely in the next six months. That percentage has improved as well, from 37 percent a year ago.

So if companies aren’t laying off, are they hiring? In the survey, 45 percent of companies expect hiring in the first six months of 2010 to either remain flat or increase. That may not be a majority of respondents or a ringing vote of confidence in the economy, but it is still the highest percentage since Dice began conducting these surveys. A year ago, 7 in 10 hiring managers and recruiters said they were curtailing hiring plans for the next six months.

Nearly half of the respondents — 47 percent — said that hiring would return to more normal levels this year. Even though it isn’t a majority, it’s a substantial number and an indication that nearly half of companies harbor some degree of optimism. To give that number some additional perspective, consider that just 16 percent believe that a return to normal is still another year away. Interestingly, roughly the same percentage said they are already back to normal.

In fact, more than 8 in 10 hiring managers indicated that they would be filling at least one new technology position in the next three months. But even with the silver linings, the hiring picture still has a few clouds. Nearly half of respondents (47 percent) said that starting salaries this year will be lower than they were in 2009. About the same percentage of companies will offer new hires this year what they did last year, so at least a sizable number of companies are holding steady. In only a small percentage of companies, new hire salaries in 2010 are likely to be higher.

Nearly 8 in 10 companies report that they’re seeing more candidates applying for jobs than even six months ago. Certainly, this means increased competition among job hunters, which isn’t welcome news for those seeking work. But there might be some benefit to companies, as they can pick candidates from a larger talent pool.

Still, even with this deluge of talent making itself available, most companies are not rushing into making new hires, even when there’s a defined need and budget. At 50 percent of companies, the time it takes to bring a new hire on board is actually longer than a year ago. The chief reason is concerns about the economy, according to most of the respondents. Fewer than 2 in 10 companies say they’ve actually sped up the hiring process.

Finally, recruiters’ and HR professionals’ activity on Dice is increasing. For one thing, job counts have risen year-over-year in two of Dice’s largest markets: New York and Silicon Valley. Another good sign is that customers were searching the Dice resume database for high-quality technology talent more frequently in the fourth quarter of 2009 than in any previous quarter. Along with more positive customer conversations, these are solid signs that the technology employment squeeze appears to be loosening its iron grip.

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