Economic Downturn Not Necessarily Bad for Developers

Economic Downturn Not Necessarily Bad for Developers

I’ve read a lot recently about the economy, including a number of prognostications about how the downturn will affect IT. But most predictions ignore some basic IT facts. A downturn in the general economy may foreshadow a downturn in hardware and commercial software sales, but it probably heralds a relative increase in IT expenditure. That’s because one of the primary ways companies can save money these days is by automating tasks that have traditionally been performed by humans.

The tasks themselves still have to get done, even during an economic downturn. Salaries are the largest single expense for most businesses. Therefore, companies turn first to downsizing their workforce to save money during lean times. But that leaves more work to be shared among the remaining employees, which results in two perhaps non-intuitive IT-related outcomes:

  1. Remaining employees now spend more time on any given task than they had previously (when the task was divided among more employees), so automating those tasks increases in value, because automation frees up employees for other, less-easily automated tasks.
  2. Because automated tasks require less human time and attention, automation increases productivity and improves opportunities for further downsizing.

Both these outcomes increase in importance as employees’ workload increases and as the economy gets worse, putting pressure on companies to reduce their workforce even further. Putting it plainly, the value of automation increases as the number of available employees diminishes.

Not all businesses realize this; many still consider expenditures on new development as an expense rather than an investment. The reasoning goes that “Salaries are a fixed expense: we have to pay all our employees anyhow, so automating their tasks doesn’t save us any money.” But the cold hard accounting fact is that automating even one hour of each of your employees’ time per week frees employees for other work (improving productivity), reduces the total number of employees you need to perform the remaining work, and can result in substantial savings over a very short period.

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That’s not necessarily good for the humans whose tasks get automated—either those laid off, or those still employed—after all, “productivity improvement” generally means either extra work for employees or job losses—but automation is, for better or worse, the future of most tasks that humans are capable of doing. Even though the ongoing need for automation will not prevent all IT layoffs (many IT tasks are themselves automatable), developers should fare better than most.


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