The CIO magazine story Ready, Aim, Hire offers seven tips for getting ahead of the curve in staffing for the expected economic recovery. But if budget constraints still make some of those impossible, you should use this time to strengthen outsourcing relations and restructure your existing team.

Develop Relationships with Offshore Providers

When the labor market tightens in the United States, you?ll be in a better position to take advantage of cheaper labor offshore if you've already established good working relationships with a short list of offshore providers and are confident they can do the work to your standards. In developing long-term relationships with a finite number of consultants, CitiStreet CIO Barry Strasnick made sure that some of them are geographically dispersed. This will allow him to get the expertise he needs while benefiting from better labor markets in other parts of the world. Such a strategy can yield significant savings. According a recent Pricewaterhouse Coopers survey of offshore best practices, companies typically save between 35 percent and 60 percent by going offshore, says PWC's Suresh Gupta.

At NCR's Teradata division, CIO Steve Dippold is tightening relationships with his offshore providers. Although he first went offshore to get around the difficulties of recruiting and retaining domestic workers with legacy skills, now he says he's pulling offshore partners up the food chain. "I'm able to hand off more and more work with confidence," he says. Not only does this let him avoid maintaining fixed overhead to handle peaks and valleys of projects, it also means he won?t be forced to hire in the tight U.S. labor market if demand for IT services spikes with the rebound.

Use the Downturn to Regroup

IS organizations that haven't restructured in the last 12 months operate at an increased cost of at least 20 percent, asserts Linda Pittenger, president and CEO of People3, Gartner's HR consulting arm. Although Christian & Timbers recruiter Mark Lewis says the "doing more with less" theme of the last 18 months has in many cases meant layoffs, he notes that "ultimately most companies have found that they had significant pockets of waste they were able to eliminate without losing any productivity."

But regrouping can also mean redirecting the efforts of your current staff to better meet post-recovery business needs. At CitiStreet, Strasnick foresees a huge need to integrate disparate systems to satisfy customer demand for real-time information. Although budgets are now constrained, he's preparing for the onslaught of demand for integration by lining up the tools and clarifying the methodologies the IT group will use when the recovery hits. For example, Strasnick says his group is moving more of its front-end code to reusable J2EE objects and is prioritizing which components of the Software Engineering Institute's Capability Maturity Model are most relevant for the organization.