Offshoring Factors into Slow IT Hiring

Susan Hall

The Labor Department's report that came out Friday showed U.S. employers added just 39,000 jobs in November and only 600 of them were in IT, reports TechServe Alliance, an IT industry group based in Alexandria, Va.


It says IT employment has increased by 2.5 percent so far this year, according to a Computerworld story that points to offshore outsourcing as a major factor. In an interview last week, Bob Miano, president and CEO of U.S. Operations for recruitment consultancy Harvey Nash, told me that permanent IT hiring is picking up, though many companies remain tentative about hiring and are using outsourcing to keep costs down.


Interestingly enough, research by Foote Partners puts the number of November IT jobs at 4,400, a big difference, but says they're mostly for consultants, contractors and managed services. It quotes CEO David Foote saying:

... it's clear that the demand for full-time workers outside the services sector in particular has not gained the kind of momentum that many analysts and pundits had been predicting this year.

I've written previously about research from The Hackett Group that says 2.8 million business-support jobs have been lost since 2000 and another 1 million will disappear by 2014. Of those, about 450,000 are expected to be IT jobs lost from the United States, Europe and Canada. Computerworld Michel Janssen, Hackett Group's chief research officer, is calling IT staff cuts:

the new reality. It's not good if you are an employee looking for a job, but [offshoring] is what is required for survival by many companies.

The story adds:

Offshoring is so pronounced that companies 'have taken that whole bottom level off the rung,' said Janssen, referring to the lower-level IT positions. He added that by doing so, though, companies are creating a new problem by losing much of their pool of future senior IT managers.

My colleague Ann All has written about that problem with outsourcing and also about the loss of institutional knowledge that can occur.


The Computerworld story also quotes Jerry Luftman, a professor at Stevens Institute of Technology's Howe School of Technology Management, who conducts an annual IT budget survey for the Society for Information Management in Chicago. He maintains that IT's still a great career, even for students coming out of college. But he says it takes more than just technical skills:

If you're just going to offer me technical skills, I might as well just go offshore and get it a lot cheaper.

He says employers are also looking for general business knowledge, industry knowledge if possible, negotiation and communications skills, as well as a sense of ethics.

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Add Comment      Leave a comment on this blog post
Nov 16, 2012 3:09 PM steve mathew steve mathew  says:
off-shoring may cut-off IT jobs in America but it will fight with the recession as the companies are helpful by huge profits gained by the outsourcing of the function to the developing countries Reply

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