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Manage IT Staff in a Shrinking Economy

Discover what it takes to lead your IT team amid cutbacks.

It's official! Late last week, the economists at the National Bureau of Economic Research convened to examine financial trends over the last 12 months. Their conclusion? The decline in economic activity since 2007 "was large enough to qualify as a ." In fact, the Bureau said, the decline was not just large, but consistent. One of the best measures of the health of the is the number of people employed in paying work, and that figure has decreased in every month since last December.

Naturally, IT jobs are no exception. Recent studies show declines in the number of available jobs across the board of IT categories. Hiring freezes, layoffs, and salary cuts are becoming commonplace -- and for many IT departments it couldn't come at a worse time. So what can small and midsized businesses do to weather a shrinking economy while still making the most of technology?

For starters, if you're in the job market, don't get too spooked. Executives at such job-search companies as and ExecuNet say this slump isn't likely to be as bad as the last downturn, which happened during the aftermath of the dot-com bubble of the 1990s.

Unfortunately, however, are typically one of the biggest line-items on a 's budget. If you're already facing the prospect of cutbacks, here are some tips for maintaining an effective IT staff and keeping your company technically proficient in lean times:

Don't be too quick to reach for the pink slips. Trading dedicated IT staff for part-time consultants is a popular option for many small and midsized businesses, but consultants can have hidden costs. Make sure you can get the IT support you need on a timely basis, because each hour that a critical server is down can mean significant business losses.

If your budget demands a hiring freeze in the IT department, look for tech skills when hiring for non-IT positions. Why shouldn't your marketing reps know HTML, or your accountants know their way around a database? Employees who can wear several hats are sure to be in high demand in lean times.
Reward productivity, but beware of overworking IT employees, especially if you don't understand the true nature of everything they do. Even the most eager go-getter can burn out when faced with an impossible workload. Talk to your team, find out who does what, and make sure your expectations are realistic. Your staff might already be too small.

If you can't hire new staff, the best thing you can do is to make your existing team more valuable. Provide opportunities for current employees to train in new skill areas, and encourage them to take them. Your company will reap the benefits, and your employees will appreciate the challenge and the chance to broaden their skills.

Finally, make sure your organizational structure rewards initiative and encourages entrepreneurship. Ensure that those employees who want to pitch in can do so, and don't handcuff them with or misguided organizational policy. An employee who is frustrated in a down economy is much less likely to remain loyal when the pendulum swings back the other direction.
How does the tech job market look from where you sit? As a manager, have you already had to make unpleasant choices? Or does a tight budget make it that much harder to find the right hires for your open positions? Sound off in the PC World community forums.

Neil McAllister is a freelance technology writer based in .

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