In a recent Financial Post interview, economist Marc Desormeaux of Desjardins Group said Canada is going into a recession. Deloitte Canada and RBC are two other entities among many that have drawn the same conclusion about Canada’s economic outlook.
The question for IT leaders is not so much whether there will be a downturn – it is all but settled science that it will come to Canadians sooner or later; what’s truly important right now is what IT leaders are thinking and doing to prepare for this economic inevitable. What effect would a slowdown have on companies’ budgets, priorities, and planning?
Reading the Room
Given the apparent inevitability of some kind of economic slowdown, whether mild or severe, one might be tempted to assume Canadian IT leaders are decidedly pessimistic. However, according to a recent (February and March 2023) survey by ITWC, in partnership with AWS, the outlook of many of Canada’s top IT leaders remains brighter than many would expect.
Download full report: The changing views of Canadian IT leaders
While a not insignificant group said they were “somewhat concerned” about the economy or “just keeping their head above water,” 64 per cent fall into the “optimistic” category – either somewhat or very optimistic.
Dollars and Cents
As one might expect at a time when there are more questions about the economy and its future than answers, many IT companies are now in a kind of loop or holding pattern when it comes to spending.
According to the survey, 38.5 per cent of respondents said their budgets will remain the same, while 17.5 will see decreases this year.
“It’s a note of caution,” said ITWC CIO Jim Love. “However, the fact that 43 per cent of companies are increasing their budgets doesn’t tell me there’s this huge wave of pessimism washing over everything. I think some organizations are taking the view that there’s opportunity even now, in the midst of uncertainty. Having said that, 43 per cent is quite a drop from the 71.5 per cent who said in last year’s CIO Census that they would increase their spending. That some kind of downturn is coming is hard to dispute.”
People Plans
The “maintain” theme was also in evidence when survey respondents were asked about talent and hiring. Sixty-four per cent said their organization’s plan for the next 12 months is very much status quo – to retain as much of their talent as possible. But according to one respondent, the plan is not to retain anybody and everybody but “the right people.”
Download full report: The changing views of Canadian IT leaders
An interesting distinction that came out of the survey was downsizing to save money versus keeping staff and trying to make roles more profitable. One survey respondent came out against downsizing as, in their opinion, it is a no-win situation where “the company loses skills and a resource [while] the employee loses an income.”
The better way, said the respondent, was for IT leaders to find ways to make roles more profitable. “Find a way to make a returnable investment, like learning a new skill to help develop a new application. It all comes back to IT and skills.”
People Plans
While the overall sentiment among survey participants is “maintain efforts” when it comes to the deployment and use of cloud, 26 per cent said they plan to step up their cloud efforts – compared to only 13 per cent who said they plan to scale things back.
“It’s interesting that even as the economic walls close in – in some circles at least – many IT leaders remain upbeat about the future,” said Love. “This is not to say they’re spending unseemly amounts of money on toys, but there’s definitely a strength there as well as a confidence in their ability to bounce back from whatever occurs.”
Download full report: The changing views of Canadian IT leaders
