After a rocky start to the year, the economy seems to be stabilizing. Earlier this month, Fed Chair Jerome Powell neglected to raise interest rates after 11 consecutive raises, leaving rates at 5% to 5.2%. Although inflation remains high, and Powell expects more rate hikes later this year, confidence in the economy is growing. The tech sector especially has seen a renaissance since Q4 2021 as the release of ChatGPT injected life into an industry wrecked by layoffs and declining profits.
Members of the CIO Professional Network recently shared their expectations for the rest of the year.
At this time last year, at the height of inflation and total economic uncertainty, some CIOs expected a flat or negative growth in revenue, but most remained optimistic with 55% expecting an increase. However, that optimism did not last, and in November of last year, 65% of CIOs expected flat or negative growth.
However, following growing confidence in the economy, as well as the explosion of generative AI resulting in increased productivity and revenue streams for many organizations, the trend is reversing. While the expectations of a revenue increase are not as high as last summer, 45% of CIOs expect a revenue increase, up from 35% in November. If the state of the economy is any indication, there is still a long way to go before revenue growth expectations reach 2021 levels.
The reversal trend continues as CIOs report an increase in their hiring expectations. In Q4, the state of technology talent was dim as Big Tech layoffs dominated headlines, and 70% of CIOs expected flat or negative growth in their hiring, but that has dropped in the most recent polls. In fact, many firms are prepping for a hiring surge as cybersecurity threats rise, and generative AI poses brand-new opportunities for innovation.
Despite this, many CIOs are taking a conservative approach to hiring. About 60% of CIO Professional Network members expect flat or negative growth in their hiring practices. With the economy still in a state of flux and as those with jobs want to hang on to them, it is unsurprising that CIOs are reluctant to add new hires.
The Wrap
While the economy is showing signs of healing, it has not returned to pre-2022 levels of growth. But there is optimism among CIOs that was not present this time last year. Inflation is down considerably from this point last summer, and layoffs have slowed as tech companies are shifting resources into emerging technologies like generative AI. CIOs are expecting to ride this wave of cautious optimism to the end of the year.
