As the world enters the new year, the outlook for IT staffing continues to shine brightly. There are various factors for IT staffing’s rosy outlook, but an intensifying war for talent and increased investments in new technologies will most likely play a large role in driving IT staffing growth.

After the pandemic increased businesses’ reliance on technology in 2020, IT spending growth accelerated in 2021. With continued growth in IT spend, IT employment has grown significantly as well. While total nonfarm employment in the US grew 8% from 2000 through 2020, IT employment grew a far more brisk 56% over the same period. This demand for IT workers is likely to continue, with LinkedIn data predicting that 149 million digital jobs will be demanded worldwide from 2020 to 2025, resulting in a 29% compound annual growth rate.

Growth in IT employment vs. total nonfarm employment in the US, 2000-2020 (click image to enlarge)

Source: US Bureau of Labor Statistics and SIA

Among the demand drivers is greater adoption of new technologies across a wide range of industry verticals. Cyber/information security serves as just one example following several large-scale data breaches in 2020. Gartner’s 2022 CIO and Technology Executive Survey found cyber/information security to be the category most widely expected to see increased investment and the BLS expects information security analysts to be the fastest growing computer occupation in the US from 2020 to 2030 and the 19th fastest growing occupation among all 800 occupations tracked by the US Bureau of Labor Statistics.

However, while demand for IT skills surges, the supply of IT workers will be unable to keep pace. A study from Korn Ferry projects that the talent shortage in the technology sector will translate into $162 billion in unrealized output in the US by 2030. Another sign of the current IT talent shortage is the historically low unemployment rate for US Computer and Mathematical occupations. After reaching 4.2% in the third quarter of 2020, the sector’s unemployment rate dropped to 1.7% a year later, matching a pre-pandemic low for the sector. The persistent talent shortage introduces tremendous opportunities and challenges to IT staffing firms. This is evident in SIA’s September 2021 Pulse Survey, where IT staffing firms reported record-low sales difficulty and record-high recruiting difficulty.

IT staffing firms can look forward to a robust market in the new year, but growth drivers alone do not necessarily lead to growth at the individual firm level as the right strategies will also be crucial to capitalizing on new opportunities. SIA recently performed an in-depth analysis of global IT staffing outlooks in our latest IT staffing report, IT Staffing: Growth Opportunities in the New World. This comprehensive report examines demand-side growth opportunities across numerous lenses, including technology areas, industry verticals, occupations, geographies, programming languages and specialization around software vendors. It also explores supply side challenges, opportunities and more.