With all of the football games on display over the holidays, we were provided some clear examples of how leadership, strategy and execution combine to determine who achieves their goal and who falls short. Similarly, IT staffing is a collaborative endeavor, and in order to be successful all members of the team need to be on the same page — working from a common playbook, if you will. We aim to provide such a resource in the form of our recently published IT Staffing Growth Assessment 2016.
The report’s opening section covers the primary factors driving supply and demand in the IT staffing market, delving into recent developments in areas such as cloud computing, data analytics, mobile connectivity, digital marketing and cybersecurity. Talent supply is receiving a long-term boost from rising numbers of college students pursing degrees in computer science, as well as rapid growth in graduates of coding bootcamp programs. The fixed annual allocation of H-1B visas remains a constraint, with the number of petitions filed continuing to represent a multiple of those visas available, though we note that the growth in flings slowed drastically from its recent pace this year. In another break from the prevailing trend, the median unemployment rate for IT occupations over the past four quarters showed a slight rise, though it remains quite low relative to historical levels.
The primary target markets for IT staffing are explored in Section 2 of the report, with market size estimates ranging in scale from our global estimate down to our estimates for local metro areas in the US and UK. Occupational-level wage data, estimated temporary agency penetration rates and long-term employment growth projections are featured here as well. An industry profile makes up the report’s third chapter, including the competitive landscape, largest and fastest-growing firms in the US and Europe, and a recap of the year’s merger and acquisition activity in the sector.
Section 4 presents growth indicators and benchmarking data. Along with our industry forecast, we include an analysis and commentary on revenue trends among publicly held firms, which have exhibited generally decelerating growth over recent quarters. You will also find financial and operational benchmarking data encompassing gross margins, changes in bill and pay rates, fill rates and early terminations, among other metrics. Excerpts from our inaugural IT Staffing US Benchmarking Survey are also provided, including data on revenue broken out by IT occupation and industry vertical, recruiting difficulty for various skill sets, and prominence of VMS.
We discuss in the report’s final section the increasingly common practice of IT staffing firms providing projects and managed services under a statement of work (SOW), including the motivating factors that are driving this shift both from the staffing firms’ and the buyers’ perspectives. Engagement models, types of services commonly provided, team structures, pricing and billing models are all covered here, along with a checklist that can be used to conduct a skills gap analysis to determine whether your firm is well positioned to achieve success in the SOW arena.
We wish you all luck in the IT staffing season ahead, but keep in mind that fortune favors the prepared. So invest some time studying our playbook for guidance in assembling your roster of talent, developing offensive and defensive strategies, gaining a better feel for your competitors and understanding how the rules of the game are changing.
Corporate members can access the IT Staffing Growth Assessment 2016 here.
