Major increase in offshore outsourcing and contracting means lost jobs and lower salaries to come; getting behind the numbers
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June 1, 2006
There has been a 25 percent year-over-year increase in outsourcing plus an 18 percent year-over-year increase in the use of contracting in the IT industry, according to recent figures from Evans Data. Thirty-seven percent of North American companies are sending development offshore, as compared to only 17 percent in last year's survey.
Sending development offshore means losing development jobs in the U.S. Meanwhile, the use of onshore contractors could mean lower wages overall in IT. However, U.S. IT professionals seem unable or unwilling to connect the dots. In another survey, this one conducted by Harris Interactive on behalf of staffing company Spherion, 70 percent of IT workers expressed certitude that their jobs wouldn't be cut in the next 12 months. The poll also found that IT worker confidence was at a five-year high. Click here to find out more!
It's a strangely rosy sentiment, given ongoing job cuts (such as Sun's layoff of 5,000 workers) based on tightening business conditions in the U.S. as well as the juggernaut momentum of offshore.
Some IT workers may be overly optimistic because of numbers released by the U.S. Bureau of Labor Statistics (BLS) showing IT employment in this country at an all-time high. However, based on a closer analysis of those numbers, Line56 has shown that the percentage of Americans employed in IT is lower today than in 2001.
What's odd about the Spherion poll is that, while U.S. college students are getting the message that their country's employers are more interested in electronic sweatshops abroad than employing citizens at home, many U.S. IT workers believe their jobs are secure despite the evidence of job cuts and flight.
On top of all that, we've just seen numbers to indicate that offshore's current economics are sustainable for a quarter century, enough time to leave U.S. IT employment in the same state as U.S. manufacturing.
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