Offshoring and the Future of the U.S. IT Worker

Dec 4, 2003

Kevin Hudson

Over the past year, the news coming out of the IT industry has been dominated by grim predictions of what offshore outsourcing will do to an already-iffy job picture. Indeed, recent projections predict the rate at which U.S. service jobs will be lost to offshoring accelerating by up to 40% a year over the next five years, reaching a whopping 3.3 million by 2015.

Already, 8% of IT work is shipped overseas, and IT professionals are understandably panicked about what impact this may have on their careers. Lately, though, the off-shoring story is shifting. A shift that lends support to our belief widespread panic over jobs is somewhat premature.

Domestic Backlash

First, reports indicate a domestic backlash is brewing. Two recent examples took place in late November, when Indiana's governor cancelled a $15.2 million contract with a company in India to upgrade the state's unemployment claims processing system (subsequently granting it to an Indiana-based company). And Dell announced it would bring its phone-based tech support for business customers back the U.S.

Further, newly released statistics appear to counter claims off-shoring is the leading contributor to the IT unemployment rate, which averaged 5.8 % in the first three quarters of 2003 compared to 6.1% overall U.S. unemployment rate. Although it's true much of offshoring involves programmers, which with an unemployment rate of 7.1% through the first nine months of 2003 has taken the hardest hit, it's also true not every IT job is a target for outsourcing.

In fact, it's not so much that all types IT jobs are going overseas as it is we suddenly find ourselves competing for jobs we held 100% ownership over for the past 40 years. For an IT sector still reeling from the devastating economic blows of the past three years, the work being shipped overseas could have pumped life back into a sector badly in need of a spark. But happily, the job picture is improving as companies once again begin to work on back-burner business applications and processes.

Also, the salaries for overseas software developers and programmers are on the rise. In India alone salaries are climbing as much as 25% a year. And while there is a long way to go before those salaries reach U.S. levels, any increase in costs means the case for moving jobs offshore will be that much harder to make.

Finally, we can't overlook the impact the exodus of the baby-boomers will have on the workforce. The U.S. Census shows a 5% increase in the number of workers, or 15.6 million people, will be needed in 2015 to maintain the ratio of workers to total population that existed in 2001.

Admittedly, rosy predications for 10-plus years in the future do little to help quell the fears of those facing a pink slip today. But there are things you can do to strengthen your current position. And surprisingly, it's the same career advice we've been giving for years.

It's Just a Drill

First and foremost, don't panic. It's unlikely positions utilizing leading edge technology platforms will begin heading overseas, so the primary targets will remain the lowest levels of software development, namely maintenance and data conversion. Business and systems analysts who design projects and produce specifications, as well as project managers who work directly with clients, will stay. Plus, many new development platforms and technologies simply don't lend themselves to outsourcing. In fact, the majority of our clients aren't targeting core employees for offshoring. Rather, they are looking at the workload they already outsource and preserving internal IT staff for more critical application and project work.

This doesn't mean complacency is a good idea. Rather, now is the time to take proactive steps toward establishing yourself more firmly within the organization and demonstrating the value you bring to the organization.

Here are some things you can do:

  • Avoid or move rapidly beyond entry-level positions. True, everyone must start somewhere, and that includes doing your time at the bottom of the totem pole. But seeking out opportunities to advance your technical skills and taking on more responsibilities to build your business skills can help accelerate your move past the level most in danger of being outsourced overseas.
  • Seek out employers who offer the most opportunity for advancement. Most of the offshoring activity has come from the Fortune 500 segment, which means you're much more exposed in a very large organization than you may be at a smaller organization where you can get a broader level of responsibilities.
  • Don't let your skills stagnate. Seek out projects that expose you to the most current technologies, find avenues that let you expand your technological horizons and never, ever stop learning.
  • Be business savvy. Demonstrate that you have a keen understanding of what your company does, it's specific business needs, the needs of its clients and customers, as well as the industry.
  • Sharpen your communication skills. This is particularly critical given the collaborative nature of the IT jobs offering the most security. It's not just for those interfacing with clients, either. You also need to communicate clearly and effectively with co-workers, managers and colleagues.
  • Establish yourself as a leader. Whatever your current position, take action to establish yourself as the best they have within that skill area. No one is indispensable, but it's far more difficult to eliminate top talent.
  • In short, offshoring does not mark the beginning of the end for IT as a viable career path. It does, however, signal the need for an image overhaul, including implementing the proven strategies for career advancement. By demonstrating your value, you increase the odds that you'll emerge professionally unscathed from the offshoring movement.

    Steve McMahan is group president for major markets and Kevin Hudson is vice president of product management for information technology for Kforce. Inc. ( Based in Tampa, Kforce (NASDAQ: KFRC) is a full-service professional staffing firm providing flexible and permanent staffing solutions in more than 40 North American markets as well as through online services.


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