IT employment reached an all-time high with an increase of 13,300 jobs in January. January’s record surpasses the previous all-time high set in September 2008 when IT employment reached 4,088,600.
The number of IT jobs grew 0.3 percent sequentially last month to 4,107,700, according to TechServe Alliance, a collaboration of IT services firms, clients, consultants and suppliers. On an annual basis, IT employment grew by 3.4 percent in 2011 and 1.5 percent in 2010. These latest numbers are based on the rebenchmarked data released by the Bureau of Labor Statistics (BLS) this month.
New Study: Nearly 500,000 "App Economy" Jobs in United States
TechNet, the bipartisan policy and political network of technology CEOs, treleased a new study showing that there are now roughly 466,000 jobs in the “App Economy” in the United States, up from zero in 2007.
The study, sponsored by TechNet and conducted by Dr. Michael Mandel of South Mountain Economics LLC, also found that App Economy jobs are spread throughout the nation. The top metro area for App Economy jobs is New York City and its surrounding suburban counties, although together San Francisco and San Jose together substantially exceed New York. And while California tops the list of App Economy states with nearly one in four jobs, states such as Georgia, Florida, and Illinois get their share as well. In fact, more than two-thirds of App Economy employment is outside of California and New York. The results also suggest that the App Economy is growing quickly and that the location and number of app-related jobs are likely to shift greatly in the years ahead.
The research shows that when it comes to employment impacts, each app represents jobs -- for programmers, for user interface designers, for marketers, for managers, for support staff. Conventional employment numbers from the Bureau of Labor Statistics are not able to track such a new phenomenon because this economic ecosystem is so new. The research analyzed detailed information from The Conference Board Help-Wanted OnLine (HWOL) database, a comprehensive and up-to-the-minute compilation of want ads, to estimate the number of jobs in the App Economy.
The total number of Apps Economy jobs includes jobs at ‘pure’ app firms such as Zynga as well as app-related jobs at large companies such as Electronic Arts, Amazon, and AT&T, as well as app ‘infrastructure’ jobs at core firms such as Google, Apple, and Facebook. In addition, the App Economy total includes employment spillovers to the rest of the economy.
Tech Spending Remains Strong, Despite Economic Risks and Volatility
According to the new International Data Corporation (IDC) Worldwide Black Book just released, IT spending increased by 5% at constant currency in 2011, despite the worsening economic situation in Western Europe and volatility in other regions. Emerging markets continued to lead the way, with tech spending in the BRIC countries (Brazil, Russia, India and China) enjoying another year of double-digit growth. Strong demand for mobile devices and software across most regions ensured a positive finish to the year, despite the impact of the hard disk drive (HDD) shortage on PC markets.
In U.S. dollar terms, the IT industry grew by almost 9% in 2011, but year-to-year comparisons could be difficult for U.S.-based IT vendors this year if currency conditions are less favorable. In constant currency, IDC projects another year of 5% growth for worldwide IT spending in 2012. Hardware and software spending are each forecast to increase by 6% (in constant currency), with 4% growth in IT services.
Strongest growth in 2011 came from smartphones (+46%), software (+6%) and disk storage systems (+6%). Businesses continued to invest in infrastructure upgrades, along with new software applications and mobile devices (including tablets). These positive trends are expected to continue in 2012, when enterprise spending on network equipment will also accelerate as many organizations invest in network upgrades to cope with the continuing increase in digital information, which will meanwhile ensure another positive year for the storage market. By the end of 2012, the PC industry will also return to positive growth.
The macroeconomic crisis in Europe has already had a severe impact on IT spending in that region. Overall IT investment was flat in 2011, with declines in spending on PCs, servers, storage, peripherals and enterprise network equipment. The recovery in Europe will be a long haul, with less than 1% growth this year and 3% in 2013.
In other regions, however, the momentum of 2011 is still evident in recent polls, which show continuing enthusiasm for tech investment amongst businesses and consumers. In the U.S., where IT spending increased by 7% last year, 2012 is likely to bring another year of solid growth (5%) driven by mobile devices, software and network equipment. Japan will see a return to positive growth, after the declines triggered by last year’s tsunami and earthquake disaster. IT spending in Brazil, Russia, India and China will be up by 9%, 11%, 16% and 15%, respectively.
Nearly half (48%) of the 1,258 CEOs polled worldwide believe the global economy will decline even further in the next 12 months, according to PwC’s 15th Annual Global CEO Survey. Just 15% said the global economy will improve during 2012.
However, nearly three times as many CEOs are confident in their own companies’ growth prospects for the next 12 months than in the outlook for the global economy, suggesting CEOs believe they have learned how to manage through difficult and volatile economic times.
Forty percent of CEOs said they are ‘very confident’ of revenue growth for their companies in the next 12 months, down from the 48% last year - though still up from the 31% who were ‘very confident’ in 2010.
In addition, more than half of CEOs worldwide expect to increase headcount in the next 12 months, although the picture changes from sector to sector with hiring much more likely in entertainment and media than elsewhere.
Unsurprisingly, the biggest decline in confidence was in Western Europe. Beset by the sovereign debt crisis, just a quarter of European CEOs said they were very confident of revenue growth, down sharply from nearly 40% last year. Short term confidence also fell among CEOs in Asia Pacific to 42% from 54% last year. China saw the biggest decline in confidence in the Asia Pacific region with 51% of CEOs feeling ‘very confident’, down from 72% last year.
There was also a marked decline in confidence in India with only 55% of Indian CEOs very confident of revenue growth, down from 88% last year. In the US, 41% of CEOs said they were very confident of short term growth, down from 45% last year. Confidence increased, however, among CEOs in Africa, where 57% said they were expecting growth, up from 50% last year.
According to the CEOs, the best strategic growth opportunities in the next 12 months will come from increasing share in existing markets and from developing new products and services, both cited by nearly one third of respondents. New market penetration, 18% and joint ventures and alliances, 10%, trailed as growth strategies. The number of CEOs planning M&A activity remains relatively low with prospects for a recovery in the deals market still looking some way off.
The emerging markets remain a vital growth opportunity for CEOs. Overall, 59% agreed that growing markets were more important to their company's future than more developed economies. Almost half of CEOs from developed nations said that emerging markets were most important to their future. Top growth targets were the BRIC countries (Brazil, Russia, India and China), joined by the U.S. and Germany. In all, when asked to select the top three targets for growth, more than 60 different countries were named by CEOs.
Seventy percent of CEOs plan to make changes to their strategy in the next 12 months, driven primarily by customer demand and economic conditions. Cost reduction remains a key, though declining, focus for CEOs; 76% reported they cut costs in the last 12 months, down from 84% the previous year. And 66% of CEOs said they would cut costs in the next 12 months.
The Talent Challenge
Finding and keeping the right talent remains a top concern for CEOs. Only 30% said they are ‘very confident’ they will have access to the talent needed to execute their company's strategy, and 43% believe that it has become more difficult to hire workers in their industry. Recruiting and retaining high potential middle managers is the biggest talent challenge, CEOs said, followed by hiring skilled production employees and younger workers.
Despite the sluggish economy, businesses are gearing up to hire. More than half of CEOs said they had increased headcount in their organization in the past 12 months and about the same percentage expect hiring momentum to continue. More CEOs in Middle East/Africa followed by North America reported hiring increases in the past 12 months, while CEOs in Asia said they are most likely to add jobs in the coming year. Just 18% of CEOs said they expected to cut their workforce in the coming year, down from 23% who said they made cuts in the past 12 months.
A potential shortfall of talent was also cited by 53% of CEOs as a threat to growth. The availability of skills was seen as a top concern across all geographic regions outside of Europe. Other frequently cited threats to growth included potential tax increases, cited by 55%, changing consumer spending patterns and behaviors, 50%; energy costs, 46%; inability to finance growth, 40%; new market entrants, 38%; supply chain security, 34%; and inadequacy of basic infrastructure, 30%.
Two Out of Three Consumers Switched Companies in 2011 Even Though they Gave Higher Marks for Service
Two out of three (66 percent) consumers switched companies – including wireless phone, cable and utilities – as a result of poor customer service in 2011 even as their satisfaction with the services provided by those companies rose, according to new research released by Accenture. The research findings pose new challenges for marketers as they focus on building customer loyalty and improving market share in a very competitive business environment.
Among the 10,000 consumers who responded, the proportion of those who switched companies for any reason between 2010 and 2011 rose in eight of the 10 industries included in the survey. Wireless phone, cable and gas/electric utilities providers each experienced the greatest increase in consumer switching – five percentage points. This includes consumers who switched entirely to another provider as well as those who continued to do business with their current provider but added services from another provider – a new, but growing trend.
The survey also found that fewer than one-quarter (23 percent) of consumers surveyed feel “very loyal” to his or her providers, while 24 percent indicated that they had no loyalty at all. And, only half (49 percent) indicated that they are strongly influenced by at least one loyalty program offered by their service providers.
At the same time, however, consumer satisfaction with their providers’ customer service actually increased in 2011 in 10 attributes measured by the survey. These attributes include the wait time for service (33 percent satisfied compared to 27 percent in 2010), the ability to resolve issues without speaking with an agent (38 percent satisfied compared to 33 percent in 2010) and speaking with just one customer service agent to resolve an issue (39 percent satisfied compared to 32 percent in 2010).
Blind Spots Emerge
The Accenture study identified a number of blind spots in the customer relationship that many companies appear to be overlooking. Addressing these issues may enable organizations to improve customer retention and stem the tide of switching. Most noteworthy among the blind spots identified:
Organizations are failing to offer consumers opportunities to engage with them, including through digital channels
Consumers expect a multi-channel experience, and in fact, 57 percent reported frustration when they were not able to access company information or purchase a product through the channels of their choice. And, according to the survey, social media sites have improved overall engagement of consumers with providers and their brands, up from 14 percent in 2010 to 21 percent in 2011. More than a quarter (27 percent)of consumers want companies to interact with them in social media environments even before they are customers, and 24 percent reported greater likelihood of doing business with providers that are actively engaged with social media.
Companies are overlooking signs that customers are itching to switch
Although complete switching from one service provider to another did not increase significantly, the rate of partial switching, in which consumers stay with their current provider but add another provider, is up in each of the 10 industries surveyed. Retail banking experienced a one percent drop (from 16 percent to 15 percent) in complete switching from 2010 to 2011, yet partial switching was up three percent (from 24 percent to 27 percent). Wireless phone companies experienced a two percent increase in complete switching year over year (from 19 percent to 21 percent), but when adding in those who made a partial switch, the combined switching rate increased by five percent (from 38 percent to 43 percent).
Companies are failing to keep promises they make on the service experience
The study found that consumers rate “having the service experience match the promise a company makes to me up front” as one of the most important areas of customer service. Yet the greatest service frustration cited is a provider’s failure to deliver on the service experience promised up front.