The Increasing Trend of Offshore Outsourcing: Part 1

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In the past few years, there has been a great deal of discussion about the challenges facing certification and the IT professional. Most of the focus has been on the eroding value proposition of certification in employers’ minds, the ongoing decrease in the demand for qualified IT professionals and the changing nature of the use of technology. In today’s reality, these challenges pale in comparison to a growing trend that should be far more distressing to all of us involved in the business of developing and maintaining the American IT workforce. This alarming trend is offshore outsourcing.

Nearly 400,000 white-collar jobs have already left America within the past year. Even more alarming is the prediction from Forrester Research that 3.3 million high-tech, financial and other white-collar jobs will be shifted out of the nation by the end of 2015. Many of these jobs are entry-level positions that typically help IT professionals launch their careers. Without these jobs it will become more difficult for people to find entry points into our industry and to get the start they need to be able to acquire the experience required to build a strong and valuable career in the IT industry. We are at great risk of forfeiting our current position as a leader in almost every area of information technology through the loss of our most sacred resource—the innovators and professionals who have to get their start somewhere.

The main reason cited to explain why companies are looking to export IT jobs to foreign countries is a decrease in labor costs. In many ways, it is the natural extension of capitalism. An increase in IT skills in other countries with lower salary levels leads corporations to the natural conclusion that to retain their competitive edge they must outsource, particularly in tough economic times. Organizations believe that in order to manage their costs and be more efficient, the best solution is simply to take those entry-level positions and move them to other parts of the world where labor costs are significantly lower and skilled workers may be more readily available. But is it really that simple? According to Gartner Inc., a research and advisory firm, “Organizations must not trivialize the impact of offshore outsourcing on their business strategies, their organization or their employees. Three areas of concern are loss of talent, loss of intellectual assets and loss of organizational performance.”

The momentum of this trend has been sustained by the rapid evolution of computer technology, banking infrastructures and widespread broadband connectivity. These advances allow for transactions to be conducted seamlessly anywhere in the world without any indication that the worker handling the transaction is in another country. These facts, along with economic forces, have come together to accelerate the offshore outsourcing of American IT positions.

I believe that all of us need to become concerned about this rapidly developing trend and formulate an appropriate stance at local, state and federal levels. This is not simply a case of labor versus management. The implications reach beyond corporate America to impact the U.S. economy and our competitiveness in the global economy. To solve this problem, it is absolutely necessary that we do a better job of educating people in foundational IT skills at every level. This involves not only K-12 and post-secondary education, but also the education of incumbent workers who need to have their skills continually developed. We simply do not have enough skilled workers to be able to satisfy the growing appetite of American businesses for highly skilled professionals. Scarcity drives up salaries, forcing corporations to look to other markets where there is a more abundant supply of skills at a lower cost.

There are some initiatives currently underway to increase awareness of the challenges brought on by offshore outsourcing by such groups as the Technology Workforce Coalition, the Washington Alliance of Technology Workers and the Communications Workers of America. These groups, along with others, are working to gain public recognition of this issue and promote action by the U.S. government.

I will be back in the next issue of Certification Magazine to give you a few thoughts about what you can do to draw attention to the potential harm that could result from this movement. I will also discuss the things you should be considering to ensure that your own career remains intact, even as the rate at which jobs are leaving the United States continues to accelerate.

Martin Bean is the chief operating officer for New Horizons Computer Learning Centers Inc., the world’s largest computer training company.

 

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