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Growth in IT department workloads outstrips budget rises for third year running

Growth in IT department workloads outstrips budget rises for third year running

89% of IT Directors expect workloads to increase in 2012 (highest proportion for three years)

Only 39% of IT Directors expect budget increases this year

91% of Directors concerned about delivering projects within budget

Growth in IT department workloads are set to outstrip budget increases for the third year running, leaving IT Directors struggling to deliver business-critical projects, reveals research by ReThink Recruitment, the business and technology staffing company.

According to the research, 89% of IT Directors expect their workloads to rise in 2012, but only slightly more than a third (39%) expect budget increases to match.

A record 91% of IT Directors said they were concerned about delivering IT projects and support within budget. This suggests that IT departments are increasingly struggling with the repercussions of several years of budgetary austerity.

Michael Bennett, Director, ReThink Recruitment, says: “For the third year running a growing proportion of IT Directors are seeing budgets fail to keep pace with the increase in workload demands. Organisations are looking to IT departments to deliver wider productivity gains on ever tighter budgets.”

“IT is vital to how most organisations function, but the overwhelming majority of IT Directors are concerned about delivering projects and support with the resources they have. If IT Directors struggle to deliver quality, competitiveness could be undermined and the ability of organisations to function as they should will be seriously impaired.”

The fourth annual research from ReThink Recruitment quizzed IT Directors from a broad cross-section of organisations which included several global companies with IT departments in excess of 250 staff.

Worryingly, the proportion of IT Directors expecting their budgets to be slashed has increased from 29% to 36% over the past year. ReThink says that the trend for businesses to cut investment in areas such as IT and to be primarily run for cash instead has the potential to cause serious damage to the long term competitiveness of the UK economy.

Michael Bennett comments: “While the importance attached to IT has grown enormously in recent years, in the current economic environment, with businesses focused on strengthening balance sheets, there is a temptation to underspend on IT. The concern now is that businesses are not investing enough, potentially jeopardising their long term competitiveness.”

Over the last 12 months a greater proportion of IT departments have seen their IT budgets both rise and fall – underlining the two-speed nature of the recovery in which some sectors of the economy are performing significantly better than others.

43% of IT departments saw their budgets increased in 2011, up from 39% in 2010. At the same time, 32% endured budget cuts in 2011, up from 29% in 2010.

Michael Bennett says: “While some sectors are investing in IT, others are still very much in a defensive posture. Retailers are boosting investment in online platforms, for example, but many banks are still nowhere near pre-recession levels of spending.”

ReThink points out that the relentless rise of workloads over the last few years, combined with pay austerity within IT departments, is making retaining key skills a major headache for IT Directors. 89% of IT Directors are concerned about retaining key skills.

Michael Bennett says: “The problem IT Directors face is that the weapons they would normally have in their arsenal to fend off raids by competitors to poach key staff have been significantly blunted. Department heads will need to find innovative ways to engage with, motivate and retain key personnel.”

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