Offshoring bites into UK IT jobs
posted in Outsourcing News and Top Outsourcing deals |Source:www.contractoruk.com
New evidence emerged yesterday that offshore outsourcing is reducing the number of IT jobs being created in the UK.
Within the last year, the number of new roles for software designers, software developers, helpdesk technicians and systems engineers has fallen.
The database of ReThink Recruitment shows paid opportunities are down six per cent for software developers and three per cent for helpdesk staff.
Although the decline in new jobs for systems and network engineers is slim, the agency noted demand has also slumped for some programming skills.
And though its database shows 6,000 new IT jobs are available this year, its managing director, Jon Butterfield, hinted that the slump in certain IT roles was telling.
He said: “The fear that IT helpdesk jobs simply represented the thin end of the wedge, and that higher value technical roles would be sent offshore next, is not new.
“But it is now having an impact on the IT jobs market.
“Some UK financial services businesses are now shifting application development offshore to low cost locations. This is lessening new demand for some programming skills in the UK.”
However because offshore outsourcing raising “quality control issues”, the demand for UK managers and consultants to manage processes has increased, the agent said.
In fact, the number of new roles for consultants has risen to 8.1% this year from 6.8% last year, while management and administrator roles are up almost 3% over the same period.
Demand for consultants is partly being fuelled by the high level of IT work needed after mergers and acquisitions, as well as “growing public sector outsourcing requirements.”
The outlook for consultants from ReThink Recruitment, an online jobs agency, confirms a reading from the Management Consultancies Association this week that confidence remains high.
The agency also showed new jobs for analysts and architects have crept up from 11.9% last year, to 16.2% this year, says its database of 29, 614 jobs as of June 2007.
Last year in June, the database stored 23,392 live IT jobs, with software development/design leading the pack – a trend that has now eased significantly.
Trying to explain this decline, Mr Butterfield pointed out that software engineers in India can be set to work for as little as £6,500 a year, according to data from Mercer.
For business, this compares favourably with the average salary for a UK-based software engineer of £32,000, according to estimates from ATSCo/ The Skills Market.
But as offshore outsourcing experts have warned, the advantage of India, and other offshore hot-spots, is only temporal.
“When wages for software specialists in India reach around 40% of the UK rate and you factor in the cost of maintaining two offices, travel expenses, time differences and so on, the financial case for offshoring begins to unravel,” Butterfield said.
So what does this climate mean for non-permanent IT workers? ReThink advised IT contractors should update their business and tech skills if they want to “help guarantee their future income.”
And positively for contract software developers working in small-scale teams, whose clients are less able to benefit from economies of scale by offshoring work, there may be less vulnerability.
ReThink said: “Software developers working in-house are much more likely to be seen as creating value for the business, which means there is greater reluctance to relinquish control to an offshore supplier, whereas the IT helpdesk is inevitably viewed as a cost.
“This could make the UK software development industry more resilient to offshore competition.”
Yet the agency cautioned that the UK is specialising in project management and consultancy, while developing countries take a greater share of work in more technical areas, suggesting a “global division of labour is emerging in IT.”
