Chicago, IL – March 1, 2011 – According to a survey by BDO USA, LLP, a leading accounting and consulting organization, nearly half (46%) of top U.S. technology companies surveyed plan to increase employee headcount in 2011. Just 7 percent expect headcount to decrease, marking a significant sign of confidence in the sector. The survey examined the opinions of chief financial officers (CFOs) at 100 leading U.S. technology companies.
In addition to growth, scalability is also a high priority for CFOs in 2011. In fact, the vast majority (72%) of CFOs note that they are currently using cloud computing for improved business agility (33%), increased scalability (33%) and cost flexibility (28%). The number of tech companies using cloud computing represents a 29 percent increase from 2010. Among cloud adopters, 55 percent expect to increase use in 2011 – a 53 percent growth over 2010.
"Technology companies have switched gears from survival to growth mode," said Hank Galligan, leader in the Technology and Life Sciences Practice at BDO USA, LLP. "The flexibility and scalability of cloud computing created cost-effective infrastructures that allowed adopters to weather the recession and emerge ahead of the curve. These forward-thinking companies are now giving the green light to new initiatives, and plan to devote resources to attracting and retaining top talent."
These findings are from the fourth-annual BDO Technology Outlook Survey, conducted in January 2011.
Other major findings from the 2011 Technology Outlook Survey include:
Security Concerns Linger for Cloud Critics. Although cloud use is on the rise for the majority of companies, 28 percent of CFOs note that they have steered clear of the technology altogether. When asked the primary reasons for their decision to not use cloud computing, CFOs equally point to three major concerns: security issues (29%, down from 39% in 2010), the hassle and expense of shifting to the cloud (29%) and limited application features (29%). "Despite major strides taken to increase cloud computing security in the past few years, it’s clear that some companies are wary of the change," said Galligan.
Despite Dodd-Frank, CFO Comp to Rise. Nearly half (48%) of CFOs say they anticipate their own compensation to increase in 2011, a sign of increased stability in the industry. Although Dodd-Frank empowered shareholders to vote on executive compensation, 94 percent of CFOs say that the legislation will not substantially impact compensation levels or structure.
Increased Push Toward Pay-for-Performance. Although CFOs expect an uptick in pay, they will likely have to earn it. Fifty-five percent say their companies plan to tie compensation more closely to performance in the coming year. As a result of increased scrutiny on executive pay, 20 percent will reduce or eliminate change-in-control provisions in employment agreements and stock award, and 14 percent of CFOs expect to reduce or eliminate "golden parachute" plans.
Tech Companies Bolster Sales Departments. With growth a key strategy for 2011, nearly half (48%) of tech CFOs say they expect to hire the most new employees in their sales and marketing divisions. Other areas expected to see additional hires include research & development (22%), manufacturing (17%) and administration (7%).
Innovation Needed in Untapped Sectors. With the clean tech sector emerging into the mainstream, 35 percent of CFOs say it will require the most innovative technologies in 2011. Healthcare and biotech follow closely (33%) amid industry changes and opportunities for greater efficiencies. Other sectors requiring more innovation include financial services (9%), oil & gas (8%), retail (7%) and construction/manufacturing (7%).
The 2011 BDO Technology Outlook Survey is a national telephone survey conducted by Market Measurement, Inc., an independent market research consulting firm, whose executive interviewers spoke directly to chief financial officers. Market Measurement used a telephone survey performed within a scientifically-developed, pure random sample of U.S. technology companies in the software, hardware, telecommunications, internet and information technology services sub-sectors.
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