The CIO Dive Outlook on 2022

CIOs are entering 2022 with lofty digital aspirations, but a tight hiring market looms ahead. Employees are fully aware of how crucial they are to operations — and how much companies are willing to pay them.

This tension depicts the dynamics playing out in the tech labor market in 2022. Tech occupations are in high demand, with no sign of slowing down. This gives tech workers the upper hand, and leaves organizations to adjust policies and strategies.

Tech firms added 11,000 workers to their ranks in December, the 13th consecutive month of employment growth for the industry, according to a CompTIA review of data from the U.S. Bureau of Labor Statistics. 

Employers across industries hired 180,000 technologists in December, and tech unemployment hit 2% — nearly half the national unemployment rate, which sat at nearly 4%. 

Companies are expected to rely more heavily on digital infrastructure in 2022, as automation and software become critical to operations. This fuels the need to hire and results in higher mobility for workers in high-demand areas, another trait of the tech labor market ahead.

Here are 5 workforce trends to watch in 2022:

1. The 'job' concept is becoming dynamic

Companies have struggled for years to attract enough tech talent to their ranks. One strategy employers have turned to is reskilling their existing workers, leading job descriptions and titles to become more flexible than in the past.

"Jobs have become more dynamic," said Phillip Alexander, CEO of Pragmatic Institute. As organizations adjust what skills they need to operate, employees are aware they can reinvent themselves with skills training.

More than half of tech leaders plan to cross-train workers from other parts of their company to meet talent needs, according to the 2021 Harvey Nash Group Digital Leadership Report.

Employees learned during the pandemic they had more to offer, often outside their specific job description. "It's our job as employers to make sure they reinvent themselves to stay in the organization and not leave," Alexander said.

2. Employees want work that challenges them

In a hot labor market, employees are motivated to shift roles mainly due to financial reasons, but career opportunities are closely behind as a key driver.

Six in 10 technologists considering a move say salaries are their primary driver, according to a CompTIA survey. But more than half say their top motivators are better career options and long-term opportunities.

Top tech employees need to constantly feel like they're "engaging their mind, constantly staying sharp, or they actually feel like they're degrading a bit," Phillippe Lanier, CEO at EastBanc Technologies. A challenging role with opportunity ahead can contribute to retaining and attracting scarce technical workers.

"While a lot of the job offers that come along may be financially more attractive to them, they're not as attractive in terms of a direct challenge," said Lanier. 

3. More worker mobility ahead

Labor dynamics among technologists was marked by high staff turnover last year. With employers actively seeking to fill their vacancies, workers scouted the field and took better opportunities. In 2022, mobility will continue to drive the talent market.

"All signs point to a continuation of a frenzied tech labor market with many employers in hiring mode and many tech professionals in 'opportunity consideration' mode," said Tim Herbert, EVP of research and market intelligence at CompTIA, in an email. 

Nearly half of tech professionals were looking at new employment opportunities, according to CompTIA data, which covers workers actively job hunting and those open to considering new opportunities.

CIOs searching for talent will need to contend with the pressure of a tight labor market, Herbert said.

4. Expect hybrid work to keep shaping strategy

The experience of 2020 taught most companies that hybrid work was possible — even if just partially, since some roles don't lend themselves to operating remotely.

Remote hiring, too, became a possibility once the geographic limits of employment vanished. A more virtualized hybrid work environment will continue to allow companies broader access to talent, according to Ken Englund, Americas technology sector leader at EY.

"If you can look well past the Bay Area in terms of talent, you've really expanded your opportunity," said Englund.

The flip side of broad talent access is that any company in the world with a remote hiring policy is now a threat, potentially luring top talent away. 

Within the range of work experiences, companies can use the operating model of choice as a differentiator. Ultimately, employees will determine what kind of business they want to be in, whether that's a remote-first or an in-office organization.

"That will become more of a decision-making criteria for people," said Englund.

5. The rise of non-traditional career paths 

Employers struggling to fill their vacancies should try looking at candidates that don't necessarily match the stereotypical tech profile.

Most technical recruiters already consider skipping resume and academic requirements while assessing candidates, and four in 10 say they regularly find potential hires with nontraditional backgrounds.

"Every study shows more diverse companies perform better," said Al Smith, CTO at iCIMS. To become a more diverse and inclusive organization, leaders must hire people from non-traditional paths into technology. 

"That's something that we're seeing in the data as well: Employers are now looking at hiring people in non-traditional paths," Smith said.

Experimentation is giving way to specialization as more companies grow their comfort with cloud-based workloads. Yet there is room for growth and expansion. 

Analysts estimate only 15% of IT spend is in the cloud, but 90% of businesses have implemented cloud systems. The mismatch highlights how much room there is for growth, especially around core app modernization. 

Many trends of 2022 echo those of years past, but this year will lead to more specialized adoption as companies evolve and formalize their strategies.

Here are three trends that will shape cloud use in 2022: 

Natural growth plateau

IaaS providers have comfortably relied on double-digit market growth, driven by initial service adoption. Though a land-and-expand strategy can fuel customer tool adoption and vendor buy-in, consolidation of infrastructure- and platform-based services is reshaping the market.

The lack of service separation could slow revenue down if vendors don't think about the innovation upside to consolidation and what they need to provide to customers to maintain growth, according to Milind Govekar, distinguished VP analyst at Gartner. 

Industry has seen an example of stalled growth before — the enterprise resource planning market enjoyed popularity and widespread adoption, but then innovation died, Govekar said. 

Monolithic ERP systems are cumbersome, making modernization difficult. While the technology became more composable, timing upgrades and modernization is an art.

IT is archaeological, with civilizations of applications buried under layers, which contribute to technical debt, Govekar said. 

With smart adoption, companies can reduce technical debt by going cloud-native and using services, which will make way for innovation, he said. Any cloud provider who can support that will continue with their growth trajectories, at least for the next five years.

Maturity makes room for cloud cost optimization

Pandemic uncertainty led to more investment in technology, a trend set to continue this year. IT budgets are expected to jump 3.6%, the largest increase in a decade. 

Concerns about how to manage technology spend coincide with investment and, as cloud bills grow, businesses are scrutinizing spend. 

As cloud adoption evolves from a trial to concerted investment, businesses are looking at how to optimize their cloud spend, said Brian Adler, senior director of cloud market strategy at Flexera. More businesses are looking at savings plans, reserved instances and committed user discounts. 

Hesitation surrounding long-term contractual commitment with the cloud is subsiding. In turn, business leaders are looking toward programmatic discounts, he said. 

Multicloud strategies take the lead

Private, public or hybrid cloud has dominated industry at one time or another, with preferences shifting because of technology needs or security concerns. Multicloud strategies tap into multiple providers, aligning providers with workloads. 

It's a shift away from gradual accumulation of cloud services, and into highly-controlled and strictly-planned adoption. 

In Wells Fargo's case, Microsoft Azure is its primary public cloud provider, but it will also use Google Cloud for advanced workloads, including AI and data solutions. 

In many cases, organizations are gearing toward single providers, but they're also concerned about becoming beholden to an individual market, said Dhaval Moogimane, partner, high tech and software at West Monroe. 

Businesses are navigating cloud limitations, from service geography to support for edge analytics. If performance waffles with a primary provider, businesses will branch out to other organizations to support their computing needs.

Organizations are going to consolidate conditional transactions and workloads around a mainstay of big providers, but workload considerations could drive multiple vendor adoption, according to Moogimane.

SaaS shapes how companies operate, from back-office procurement or payroll to automated manufacturing processes. 

In 2022, companies will use SaaS to enable operations, with productivity tools taking up the largest share of the overall software budgets for 2022, according to a report from Spiceworks Ziff Davis. 

Prioritizing productivity is a broader trend in IT: the top goal for the year ahead is improving day-to-day operations, no matter what technologies or strategies are used to get there.

SaaS buying will continue to decentralize in 2022, reorienting which leaders are doing the buying and how tools are acquired.

Here are five trends that will shape enterprise SaaS use in 2022:

1. The cloudification of everything

While cloud once lured executives with cost opportunity and scale, the bigger selling point in 2022 is around features. Cloud-based SaaS providers depend on features to compete, and customers are taking note. 

In 2022, executives will continue to "look inside the business to see what they do want to keep control of versus outsource to the cloud," said Brian Bronson, president of Americas and APAC at Capgemini Engineering. The process will direct executives toward purchasing SaaS and applications from vendors. 

As SaaS becomes more central to operations, organizations will hire more staff, investing in people who can help manage critical third-party platforms.

2. The middle buyer strategy expands

Vendors have to look beyond customer technology budgets to grasp what types of software will sell in 2022. More business units will opt to independently procure SaaS licenses as software grows more decentralized.

Four in 10 board of directors say they're shifting the digital business budget to line of business units, according to Gartner research. 

"They're doing that because they want to grow the business back faster," said David Groombridge, research VP at Gartner.

This shift will change how CIOs approach the procurement and use of SaaS tools across the organization.

"Does the CIO try and stand in the way of that? Do they try and impose or reimpose the controls that they had when the budget sat with them? That's probably not going to be possible to do: The world has moved on," said Groombridge. 

Rather, as line-of-business leaders procure SaaS, the CIO has to work to build a much more influence-led organization, according to Groombridge. "We're going to have to move from mandates to enabling the business to buy in a secure way," he said.

3. Modular software buying

SaaS vendors have long thrived on selling products in bundles. While bundles have become more customizable over time, enterprise buyer swill emphasize modularity.

"We will see more desire to buy software in a composable form and less as large monolithic applications," said Groombridge. This trend will echo in the SaaS market, leading providers to sell solutions in more flexible ways.

CIOs will need to "assess risk carefully before constructing complex application environments around multiple modular SAS components," said Groombridge. 

Though this strategy may look like a good short-term strategy when seeking composability in the enterprise, it can lead to an environment that depends on too many provider integrations, according to Groombridge.

4. The power of APIs

Business leaders will keep APIs and interoperability in mind when shopping for SaaS this year. In part, the experiences of the pandemic put this technology in the spotlight.

"Even the industries that weren't reliant on digital platforms before are suddenly realizing they can't do things the way they used to," said Brian Jackson, research director, CIO practice at Info-Tech Research Group. Businesses accelerated digital adoption as they moved in-person processes, such as signatures or other paper-based tasks, to the digital realm.

But what happens if new, unforeseen problems arise? The need for interoperability through APIs will guide SaaS decisions, as IT leaders try to design systems that can scale and adapt.

"Platforms that allow for good API integration and connectivity — they're going to be very important," Jackson said.

5. SaaS: the secret talent tool

C-suite members list access to talent among their top concerns for 2022, and SaaS tools could play a role in their response strategy.

"Top talent is going to look for places to work where they can be successful," said Marc Friedman, CEO of Cadalys. Entering the market as hot commodity, technologists will judge competing offers by looking at what companies can do to improve their efficiency — including what type of software they'll have access to and how well designed the tech stack is.

"If you are a rock star employee and you have a choice of anywhere you can go to work, you're not going to go work for the company that has created their tech stack where you have to use 33 separate applications to do your job," said Friedman.

Nearly one-third of CIOs plan to spend more time driving business innovations in 2022, according to IDG's 2022 State of the CIO survey. The company included responses from almost 1,000 IT executives and 250 line-of-business leaders. 

Over half of line-of-business leaders see the CIO as a "strategic advisor who proactively identifies business opportunities," according to the survey. The perception of CIOs as strategic business advisors more than doubled since 2021.

Tech leaders will continue to bring in revenue for their organizations in 2022, with 65% of leaders adding some form of revenue generation to their objectives for the year.

The perception of the CIO as a valued partner is increasing among line-of-business managers, as CIO responsibilities encompass more business strategy. 

Collaboration is part of the strategy for advancing on business growth. Most CIOs are spending more time collaborating with lines of business, aiding in operations and product development.

"I see a huge trend towards more and more strategic dialogue with the board of directors down," said Brian Bronson, president of Americas and APAC at Capgemini Engineering, in December. The CIO will provide companies with holistic, strategic thinking about how to manage more aspects of the business than before.

IT budget numbers for 2022 suggest more ambition in the projects led by tech decision makers. With less uncertainty from the pandemic, companies are once again approving projects with three- to five-year timelines. 

Gartner expects global IT spending to grow more than 5% in 2022, an increase partly driven by the rise in long-term projects.

While cybersecurity tops the list of technology initiatives in IDG's report, closely behind in the list of priorities are efforts to increase operational efficiency. Nearly half of executives list operations improvements as a top priority, up from 34% in the 2021 survey.

The tech leaders who spent 2021 focused on business acceleration will now be tasked with guiding business transformation.

2020 cemented the role of the CIO as a savvy business advisor. CEOs see CIOs and CTOs as the most critical executives over the next few years because of the connections they can provide, an IBM survey of 3,000 CEOs found.

Companies are expecting CIOs to advise, and execute in the new year. A more efficient organization awaits through automation and hybrid work technology implementations, two tasks squarely under the purview of CIOs. By 2024, Gartner expects these developments to lead nearly one-third of corporate teams to operate without a boss.

Alongside these changes, there's the unexpected. The developing impact of the omicron variant is leading companies to once again adjust their operating models, without reverting completely to early pandemic playbooks. A response to these changes, too, will require input from the CIO.

Here are five analyst predictions on the scope of the CIO role for 2022:

1. CIO job gains revenue metric

In the coming year, one in 10 tech execs will get their performance tracked on revenue, according to Forrester projections.

"Right now, not a lot of people in the tech world get goaled on revenue," said Matt Guarini, VP, senior research director at Forrester, in October. Instead, the performance of tech execs is measured in terms of their support of revenue streams, rather than specific dollar amounts. 

"With the convergence being accelerated between tech execs and the business, we think that you're going to start to see some of these executives take on explicit revenue targets," said Guarini. Companies trying to integrate technology as closely as they can with the overall business believe this strategy will help drive that alignment forward.

2. CIO, the holistic leader

If previous years saw the CIO graduate from a backend service provider to a close advisor on business strategy or operations, 2022 will show that CIOs can advise and execute broadly across multiple areas of the business, according to Brian Bronson, president of Americas and APAC at Capgemini Engineering.

"I see a huge trend towards more and more strategic dialogue with the Board of Directors on down, more and more holistic, strategic thinking about how they are going to manage the business, how are they going to manage the data, what they are going to keep in house versus outsource or partner, and then completely remake their organizations to accommodate that," said Bronson.

The CIO moved from the internal technology provider to a more complex task in years past, Bronson said. Now, CIOs will implement technology, manage data and logistics, secure data, and deliver actionable intelligence.

"That's a huge difference from, 'my email system's not working,'" said Bronson. 

3. CIOs vs. the fluidity of hybrid work

CIOs who quickly supported remote work in 2020 enabled operations under duress for most businesses. Their profile as efficient executives grew, but the trial by fire isn't quite over. 

In 2022, CIOs will need to solve the challenges of hybrid work under a much more fluid scenario, as the rise of variants test the systems put in place during the relatively stable second half of 2021.

"You have different people in the office, different people working from home and that could change at any point," said Brian Jackson, research director, CIO practice at Info-Tech Research. "Maybe you'll all be remote again."

Responding to hybrid work demands will become a bigger portion of the CIO's workload next year.

"You don't know what to expect one month to the next," said Jackson. "So you have to be ready to support any scenario. "In terms of spending, I think people are going to be looking at their video conferencing solutions … and realizing that they're not quite up to snuff." 

4. CIO as chief of staff

With tech plugged into more parts of the organization, in the coming year the CIO will more often sit at the center of operations, rather than on the sidelines, according to Marc Tanowitz, managing partner in the advisory and transformation division of West Monroe.

"The role will expand from chief information officer to look more like a 'chief of staff' to the C-suite that is relied on to provide advice and counsel," Tanowitz said in an email.

Part of the guidance the executive can provide is around how to transform their companies into digital enterprises that can respond to expectations from changing customer, worker, and regulator expectations.

5. CIO, a public-facing role

In response to the expansion of technology in the organization, CIOs will gain more notoriety outside their organization as a byproduct of their involvement with transformative strategies in the organization, according to Suneet Dua, products and technology chief revenue and growth officer at PwC US.

"This will expand the CIO role to become a more public-facing, company-wide role, which leads strategy and execution, expanding from standing up tech solutions to addressing the organization's COVID-19 response, new ways of working, driving digital skills training for employees, and enabling/overseeing citizen-led development," Dua said.

While the CIOs and CTOs of the past usually operated within the constraints of their departments, now companies take on a deeply integrated technology approach, a change actively led by technology leaders.

The priority for enterprise IT in 2021 was acceleration and growth — and the tune isn't changing much as 2022 nears.

Technology executives are gearing up for a busy 2022, with IT spending expected to grow 3.6% next year, according to Gartner projections. The increase is the highest jump in over a decade, as once-prioritized legacy upgrades take a backseat to investments in cybersecurity or data. 

How companies decide to invest in technology could determine their long-term success. With the right technology outfit, organizations can address their "total experience," or how they interact with customers, employees, users and everything in between. 

But a large theme that emerges across executive priorities in 2022 is the need for IT talent. The ability to attract and retain technology workers, essential for execution on IT projects and priorities, sits atop C-suite priorities. The need for talent is shaping purchasing decisions, too. 

Here are the budget priorities for five technology executives next year: 

(The comments below have been lightly edited for length and clarity.)

Mike Anderson, chief digital and information officer at Netskope

Adapting to new ways of working will be the name of the game in 2022. 

In 2022, IT budgets will prioritize investments that maximize go-to-market strategy and deliver business value realization, as well as provide security for protecting applications and data in the cloud. 

Business value realization is a critical piece of technology investment that’s too often overlooked. In other words, how is every business helping its customers understand exactly what value their investments in technology are creating, and how does every business ensure it’s realizing those benefits? 

Here’s an example: By investing in tools that build more rigor into our sales methodology, our sales team can build a strong foundation from a system standpoint. We hope this support will allow sales executives to better leverage customer data and make more informed decisions, which will increase overall customer experience and boost customer loyalty

Rolf Illenberger, managing director at VRdirect

We are a technology company building and creating our own software solutions so, for us, the priority is clearly our development team. The labor market that I'm expecting next year will be even more difficult than it is already. 

If you're a software company and you want to create a smartphone app today, you have two systems that you need to build for: iOS and Android. 

In the VR space, you're going to need to deploy an app for the Oculus / Meta ecosystem, Microsoft, Apple, HTC, Pico… so it's going to be super difficult for us to keep up with market developments. That means our number one priority in the IT budget is development capacity.

Prasad Ramakrishnan, CIO at Freshworks

We want our employees to be happy and proud of the work they are doing, so we’re evaluating more robotic process automation so they don’t have to get bogged down with tedious, repetitive workflows and allow them to up-level their work on more meaningful tasks — prioritizing a human touch on strategic, critical work.

We have been making investments in AI/ML based technologies to improve the quality of insights to our employees. I see continued investments in this area. We also recognize that remote work is here to stay, so to safeguard our remote workspace we’re looking into implementing a “tech review” process for each of our employees. 

It’s a logistical nightmare for companies to figure out where every employee is, ensure they’re utilizing secure networks to access sensitive information, and that they’re even properly equipped (with physical equipment) to do so. Conducting this review allows for these processes to flow more seamlessly and securely in the future.

Nicolas Avila, CTO for North America at Globant

One priority is around empowering our talent. In this day and age, people are not going to work for a company that's not investing in their growth, where they're not feeling connected to their purpose. You have to be a company that empowers them to give the best of themselves. 

That's why we've been investing in different initiatives around AI, for example, to make our developers more productive so they can learn faster on a new job that they can turn assignments in faster and be ready for the next endeavor, but at the same time be more productive.
 

Mick Cobb, CTO at OnBoard

Talent is a top priority for our team.  IT teams will either succeed or fail this year based on how much they’ve invested in programs, processes, and support for their talent pipeline.

We’re also continuing to invest in ensuring we can continue to ideate, develop, and execute innovative new features for our customers throughout every step of their board experience.

Lastly, another area that’s top of mind for us in the new year is security. Our team is investing heavily on improving the security of our application for users, as well as simplifying the experience so it’s intuitive and not cumbersome. It’s also important for us to equally spend money toward keeping company security and data quality. 

To improve the way their organizations operate, executives will be using more Internet of Things, hybrid cloud and AI over the next five years, according to Snow Software's 2022 IT Priorities report, published Tuesday. The firm commissioned Regina Corso Consulting to conduct a survey of 1,008 IT decision makers.

In the 2022 technology roadmap, executives say improving day-to-day operations (30%), reducing IT costs (28%) and improving customer service and satisfaction (28%) are their top priorities.  

Nine in 10 IT executives say they now have more accountability for the financial impact of IT investments than in previous years, Snow Software finds. The same number of executives say IT is often asked to innovate faster and demonstrate return on their investments. 

The past two years illustrated how technology can allow businesses to operate past disruption — bringing new revenue streams and improving operations. Technology budgets for the year ahead, and beyond, are showing that executive intent. 

Executives expect a 3.6% increase in IT spend for 2022, according to Gartner data. That number represents the largest year-over-year increase in over a decade, surpassing the 3% growth experienced in 2018.

CIOs are overseeing the higher budget allocation, a sign of the role more clearly evolving into broader business advisor than technology provider. Despite ample innovation goals, seven in 10 decision makers say they end up spending too much time reacting to problems, which reduces their ability to innovate.

Tech executives are also preparing for more human-centered roles, with customer service and satisfaction atop their list of IT priorities. 

One in 10 tech executives at top-performing companies will focus investments on human-centered tech initiatives at three times the rate of their competitors next year, according to Forrester projections.