By now it’s apparent that we live in highly disruptive times. Yet, no sector seems to have a bigger bulls-eye painted on it then tech.
Outplacement firm Challenger, Gray & Christmas reports that while the number of overall job cuts declined in 2014 to the lowest level since 1997, planned workforce reductions in the technology sector trended in the opposite direction, rising to the largest year-end total since 2009.
Remarkably, employers in the technology sector announced a total of 100,757 job cuts in 2014. That was up 77 percent from 56,918 cuts in 2013. The heaviest downsizing took place in the computer industry, which witnessed a 69 percent decrease in layoffs—59,523 in all. The electronics industry and telecoms also experienced extremely high levels of layoffs.
Clearly, IT is entering a new phase. “Oddly, the technology sector was among the stronger segments of the economy in 2014 and is likely to be a source for continued growth and job creation in 2015,” noted John A. Challenger, chief executive officer of Challenger, Gray & Christmas. “Technology is a sector where trends shift quickly and companies have to be able to pivot in response. …It is common to see simultaneous job destruction and creation, as employers shed workers in one area, while building up another.”
It’s wise to pay very close attention to the last sentence of Challenger’s remarks. IT professionals today need to constantly upgrade skills and knowledge, and adapt to a roller coaster business environment. Yet, for better or worse—I’m inclined to think it’s more the latter—American companies typically place too much emphasis on short-term profits and stock market valuations and lose sight of the big picture. They view hiring and firing as discreet and disconnected activities linked to different business issues and events.
With critical IT skills in short supply—some studies indicate that nearly 90 percent of companies have trouble filling key IT positions—business and IT leaders may need to reboot their thinking about how best to attract and retain staff. They also need to rethink what a company’s role is in retraining employees and upgrading skills to address new and evolving IT tasks and challenges.
I’m guessing that very few companies engage in any type of long-term human resource planning. As a result, the current system of hiring and firing isn’t working particularly well for anyone.
