IT Workforce snapshot

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1 2013 IT Workforce snapshot The energy sector is being impacted by changes that will continue to challenge this sector into the foreseeable future. Technology is an essential player driving and supporting industry needs to increase efficiency, upgrade IT infrastructure and ensure compliance with government regulations. TEKsystems Energy IT Workforce Snapshot is designed to provide a high-level view of trends impacting IT spending and IT employment within the energy sector. This report can help organizations create a benchmark for comparing IT goals with industry peers and provide a reality check for potential challenges related to securing the right IT professionals.

2 2013 IT Workforce snapshot Table of Contents Energy IT Spending Projections...1 Challenges for Energy and Utilities IT Leaders...3 Energy IT Hiring Trends...5 Supply and Demand for Energy IT Professionals..7 Hot Energy and Utility IT Skills...9 Compensation...11 Footnotes...13

3 IT Spending Projections Worldwide IT spending in the energy and utilities industries is expected to reach $155 billion in 2013, a 4.41 percent increase from Spending will be spread across telecom ($52.6 billion), IT services ($40.5 billion), software ($16.6 billion) and hardware ($13.6 billion). Increases in IT spending are expected to continue with worldwide spending projections passing $160 billion in 2014 and passing $170 billion in IT spending in the energy and utilities industries in North America is expected to reach $66 billion in 2013, a 4.78 percent increase from Growth is expected to continue through 2016 with spending expected to reach over $71 billion. 1 Fifty-three percent of energy and utilities IT leaders anticipate spending on IT infrastructure and 50 percent expect IT applications services will increase in Investments in IT outsourcing services and IT education and training should also see increases, according to 38 percent and 34 percent of IT leaders, respectively IT Spend Projections 2012 IT Spend Projections IT infrastructure services spending 28% 22% 3% 9% 0% IT applications services spending 25% 25% 3% 6% 3% IT outsourcing services spending 9% 16% 25% 6% 6% IT education/training services spending 9% 34% 3% 3% 6% 19% Increase by more than 10% Increase by 5-10% Increase by up to 5% Stay the same Decrease by up to 5% Decrease by 5-10% Decrease by more than 10% Don't know TEKsystems.com 1

4 IT Spending Projections, cont d. Organizations are facing core issues like security threats, legacy modernization and standardization, and embracing IT/OT convergence. Driving the industry forward in terms of adopting new technologies is a critical component, and enterprise resource applications providers like SAP and Oracle are helping advance the industry in real time, says Troy Peaden, TEKsystems Executive Director of Energy Services. Effectively implementing these technologies must be a top priority to ensure organizations not only have effective IT systems to support the business but also a secure infrastructure that protects against cybersecurity threats. Bringing in the right service providers and the right IT talent to ensure these projects are given the best chance to succeed is essential. TEKsystems.com 2

5 Challenges for Energy and Utilities IT Leaders Energy and utilities IT leaders report risk management/legal and compliance, operations and finance/ accounting will have the biggest increase in IT needs in Organizations are faced with a number of compliance projects in For example, the Dodd-Frank Wall Street Reform and Consumer Protection Act could force energy organizations to enable their systems to interface with new trading exchanges. This would require organizations to test, evaluate and potentially upgrade their IT infrastructure, software and reporting processes to ensure they are compliant and able to effectively report on their trading and other financial activities. 3 Business Increase in IT Needs Risk Management/Legal and Compliance Operations Finance/Accounting Marketing/Sales Research and Development Purchasing Human Resources TEKsystems.com 3

6 Challenges for Energy and Utilities IT Leaders, cont d. Energy and utilities IT leaders say that acquiring necessary budgets, attracting, retaining and developing top talent and improving IT performance/efficiency rank as the biggest challenges to their organization meeting its goals and objectives in Selecting the right vendors/partners and regulatory compliance round out the top five challenges. 2 Biggest Challenges Acquiring necessary budgets Attracting, retaining and developing top talent Improving IT performance/efficiency Selecting the right vendors/partners Regulatory compliance Managing legacy systems Properly aligning IT strategy to the business Managing security concerns Obtaining executive buy-in for IT projects Customer loyalty Managing newly deployed systems Mergers and acquisition These challenges are magnified by the fact that only 10 percent of energy and utility IT leaders are extremely confident that their 2013 IT budget will enable them to strategically support the business needs. 2 Confidence in IT Budgets Confidence in IT Budgets 10% 44% 25% 14% 2% 5% Extremely confident Confident Neutral Unconfident Extremely unconfident Don't know TEKsystems.com 4

7 Challenges for Energy and Utilities IT Leaders, cont d. The challenge for energy and utilities organizations is to increase efficiencies while improving their distribution models. In order to achieve those efficiencies, they must leverage technology and people to ensure they are compliant and effectively reporting on various activities such as trading, states Peaden. At the same time, security may be the most important area of investment. The number and frequency of cyber attacks are increasing, making it even more critical for energy organizations to have the right systems, security and people in place to protect their own and the nation s energy infrastructure TEKsystems.com 5

8 Energy and utilities IT Hiring Trends IT leaders are prioritizing several initiatives with significant impact on the business. To implement each initiative, IT leaders slightly favor a contingent workforce model over a permanent one. Forty-six percent of IT leaders say their temporary IT headcount will increase in 2013, compared to 45 percent saying their permanent IT headcount will increase. 2 Change in 2013 Expected IT Hiring Change in 2013 Temporary IT headcount 46% 35% 19% Permanent IT headcount 45% 41% 14% Increase Stay the same Decrease Of those expecting increases in temporary headcount, the majority (27 percent) anticipate temporary headcount increases of 5 percent of more. 2 Expected Percentage Change in IT Headcount in 2013 Expected Percentage Change in IT Headcount in 2013 Temporary IT headcount 23% 4% 19% Permanent IT headcount 14% 14% 17% Increase by more than 10% Increase by 5-10% Increase by up to 5% TEKsystems.com 6

9 Energy and Utilities IT Hiring Trends, cont d. The pressure energy organizations are under to upgrade their IT infrastructure and meet regulatory demands is high. The need to alter their workforce model to a more dynamic contract model will become increasingly apparent as the baby boomer population begins to retire. Leveraging a contract model can give organizations the ability to augment their workforce by hiring specific skills required during modernization efforts and quickly ramping up or down to achieve the IT and business objectives. says Peaden. Once an initiative is complete, organizations are more likely to hire permanent skills to maintain operational efficiency and ensure the systems continue to run smoothly beyond the implementation. The contract model provides the flexibility required to get a system up and running, but it also prevents them from getting locked in with skill sets only needed during certain periods of an implementation. TEKsystems.com 7

10 Supply and Demand for Energy and Utilities IT Professionals Demand for IT professionals with energy and utilities specific experience remains high. TEKsystems research shows the number of job requisitions for IT professionals with energy and utilities experience increased 53 percent from 2011 to Further, the number of energy and utilities IT related job postings has increased more than 70 percent from December 2011 to December Percentage Change in IT Job Requisitions (Demand) Percentage Change in IT Job Requisitions (Demand) Healthcare 53% Energy and Utilities 28% Transportation 24% Financial Services 16% Retail Trade 15% Information Technology 11% Government 9% Manufacturing 7% Educational Services 5% Telecommunications 5% Wholesale Trade 3% Construction -9% TEKsystems.com 8

11 Supply and Demand for energy and utilities IT Professionals, cont. Total energy and utilities employment is approximately 715,000 people. Of that population, there are approximately 30,000 energy IT professionals in the U.S., which account for about 4 percent of the total U.S. energy and utilities workforce. Currently, the pool of IT resources with the experience and skills has not kept pace with the strong demand in the energy and utilities industry. The energy IT labor pressure is approximately 0.37 nationwide meaning there are 0.37 job seekers for every one open energy and utilities IT job. 4 The gap between demand and supply is likely to widen. The average age of workers in the energy industry is over 50 and the industry estimates that up to half of its current workforce more than 500,000 workers will retire within five to 10 years. 5 Comparatively, 31 percent of the active energy and utilities IT workforce has over 16 years of experience. 4 The importance of proactively instituting a workforce planning strategy cannot be understated. Given today s competitive forces in the industry and threats to national security, energy and utilities organizations cannot risk settling for the B team. Considering how to best attract, develop and retain A players needs to be at the forefront of all strategic initiatives, as it is a requirement to attain key business goals, comments Peaden. TEKsystems.com 9

12 Hot Energy and Utilities IT Skills The most in-demand IT skills specific to the energy and utilities industries include IT specialists, software engineers, business analysts, project managers and application developers. 4 These skills reflect the areas energy IT leaders say will have the biggest impact on their organizations in 2013 which include big data, business intelligence, security and cloud computing. Additionally, master data management, business intelligence and security are also high priorities on the list. Energy IT leaders report finding IT talent possessing analytics (BI, Big Data, etc.), mobile, business analyst skills as the three most difficult types of roles to fill. The remaining top difficult to fill positions are security and project management jobs. 2 IT Leaders Analytics (BI, Big Data, etc.) Mobile Business analysts Security Project managers Cloud Engineers Developers Architects.NET Social media Help/Desktop support TEKsystems.com 10

13 Hot Energy and Utilities IT Skills, cont. There is a war for talent and a limited number of IT professionals to go around. The most difficult to fill positions are skills where the supply of resources is limited but demand is high, which makes thinking about workforce planning for the future even more essential, says Peaden. Conducting a gap analysis and understanding the local and national IT labor market will help identify your skill gaps and see how competitors are sourcing similar skills so you can differentiate your company from the competition. TEKsystems.com 11

14 Compensation The skills identified as experiencing the greatest year-after-year growth are also among the top paying jobs in the energy IT field to date. The best IT professionals in these fields can make $100,000 per year or more. The annual median salary for these skills is more than $70,000 per year with the exception of computer support specialists, who can still earn around $60,000 per year if among the top 10 percent of computer support specialists. 5 IT Leaders Annual Median Salary Computer and Information systems managers $114,795 Software developers, systems software $95,505 Software developers, Applications $90,460 Computer systems analysts $90,360 Computer occupations (all other) $86,610 Information security analysts, Web developers and computer network architects $83,550 Computer and mathematical occupations $80,425 Computer programmers $78,400 Database administrators $75,760 Network and computer systems administrators $75,495 Computer support specialists $58,335 Further, 38 percent of energy and utilities IT leaders say the salaries of some of the most difficult to fill positions, like business analysts, are expected to increase by up to 5 percent over the next year. Twenty-three percent of energy and utilities IT leaders say that salaries for workers with security and analytics skills will increase by 5 percent or more over the next year. 2 TEKsystems.com 12

15 Conclusion Energy and utilities organizations are facing challenges from a technology, legislative and workforce perspective. Navigating each will be necessary to ensure IT and business success. By proactively addressing workforce needs and selecting the right service providers, energy organizations can position themselves for success over the long term. Footnotes 1 Gartner Forecast: Enterprise IT Spending by Vertical Industry Market, Worldwide, , November TEKsystems IT Annual Forecast Survey, November Grant Thornton, Financial reform: How the Dodd-Frank Act affects the energy industry. Retrieved from Financial%20services/FSandFI%20files/Financial%20 reform/financial%20reform-energy%20industry-grant%20 Thornton%20LLP-September% pdf 4 CareerBuilder, Supply & Demand Portal, December TEKsystems IT Professional Perspectives Survey, December Dice Salary Survey, January U.S. Bureau of Labor Statistics, Occupational Outlook Handbook, December 2012 About TEKsystems People are at the heart of every successful business initiative. At TEKsystems, we understand people. Every year we deploy over 80,000 IT professionals at 6,000 client sites across North America, Europe and Asia. Our deep insights into IT human capital management enable us to help our clients achieve their business goals while optimizing their IT workforce strategies. We provide IT staffing solutions, IT talent management expertise and IT services to help our clients plan, build and run their critical business initiatives. Through our range of quality-focused delivery models, we meet our clients where they are, and take them where they want to go, the way they want to get there. Visit us online at TEKsystems.com 13

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