CIOs look to increase IT headcount in 2023 – Gartner

Some 81% of large enterprise CIOs plan to increase IT headcount in 2023, a new report from Gartner has revealed. 

Meanwhile, 14% expect a decrease in their IT headcount, and 5% expect it to remain the same. 

In addition, only 4% reported AI-augmented workers as a resource producing technology work. S

According to Sydney-based Neha Kumar, senior advisory director at Gartner, the focus of organisations in ANZ around attracting talent has slowed down compared to last year, as well as hiring, influenced by budget pressures and overall economic uncertainty, rather than demand.

"The IT talent problem in ANZ hasn't gone away and retention issues remain, but leaders are shifting attentions towards augmenting hiring with a renewed focus on doing more with their current employees and upskilling them," says Kumar. 

"While many may have more budget, they also have inflation pressures and the need to justify the value of investments, making hiring more difficult."

Gartner's recent labour market data revealed that more employees in ANZ are looking for development opportunities and career growth. Kumar says ANZ CIOs are looking at how to navigate career development to retain employees and upskill them in new areas where expertise is needed. This isn't only restricted to IT teams, but also how digital capabilities are uplifted across the business workforce.

"There's growing interest in ANZ on the talent implications on new emerging technologies like generative AI. CIOs are investigating what it means for their talent strategy, with considerations on whether some things can be automated and if the capabilities of AI can fill some of the skills needed, while upskilling employees to produce technology outcomes more quickly."

Kumar adds that most are currently in the watch and wait mode, while figuring out how they can make money using it and increase the productivity of their workforce.

The Gartner survey was conducted from October through November of 2022 among 501 respondents,  182 of which were LE CIOs in North America, EMEA and APAC region. The LE segment consists of enterprises with a total annual revenue of $1B USD or more.

"Attracting and retaining technology talent remain critical areas of concern for CIOs," says Jose Ramirez, Sr Principal Analyst at Gartner. 

"Even with advances in AI, Gartner predicts that the global job impact will be neutral in the next several years due to enterprise adoption lags, implementation times and learning curves."

Why CIOs Plan to Increase IT Headcount in 2023

"Enterprises have undertaken various digital initiatives over the past two years, with operational excellence and customer or citizen experience being the most popular," says Ramirez. 

"Still, these initiatives often do not meet enterprise needs quickly enough." Sixty-seven percent of LE CIOs plan to grow their IT headcount in 2023 by at least 10% to support their enterprise's digital initiatives.

While CIOs are looking to expand their IT teams, many have faced roadblocks in hiring due to economic conditions. Due to prevailing economic volatility, 41% of LE CIOs report slow hiring for IT roles, 35% report decreasing overall IT budget and 29% report an IT hiring freeze.
 
"CIOs are taking proactive steps to combat economic volatility by relaxing geographic and role requirements to expand their IT talent pipeline," says Ramirez. 

"Some organisations have found success by hiring early-career technologists and providing upskilling opportunities to fill critical technology needs."

The survey also found that full-time equivalents (FTEs) do the majority of tech work in the enterprise. Full-time IT employees perform 56% of the work, while technology advancements such as automation and AI-augmented work account for just over 9% of work today.

"This reliance on FTEs to meet the demands of digital transformation explain why LE CIOs plan to increase IT headcount in 2023," says Ramirez.

How CIOs Plan to Upskill IT Talent  

With the growing demand for IT talent, the most important candidate qualities LE CIOs look for during the hiring process are having the requisite technical skills, soft skills (e.g., communication, relationship management) and cultural fit. LE CIOs cite cybersecurity, cloud platforms and customer/user experience as the three most critical technical skills in 2023.

Nearly half of LE CIOs plan to invest in training programs to upskill and reskill IT staff to ensure teams have the relevant roles, skills and capacity to meet enterprise objectives. Forty-six percent of CIOs also plan to establish fusion teams, and the same percentage plan to automate workflow to free up IT time.

"Recruiting the right IT expertise takes time and planning, especially for skills in architecture, cybersecurity, cloud computing and agile software development," says Ramirez. 

"Ensure that IT has relevant roles, skills and capacity to meet enterprise objectives. This may require embracing a blended workforce model of IT and business domain roles."