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i.focus corp In The News |  |
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IN DEPTH: EMPLOYMENT & EMPLOYEE BENEFITS From the March 12, 2004 print edition © 2004 American City Business Journals Inc. Companies facing challenges of IT offshore outsourcing trend Lisa Shelton Special to Houston Business Journal BACK TO NEWS PAGE |
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is work for people in the information technology sector here in
Houston. The issues shaping the job market are influenced by a
great number of factors: economic recovery, baby boomer retirement,
available skill sets and, yes, offshoring. To focus only on the
offshoring issue is to miss a great piece of the picture, but
it is important, given the current political discussions, that
companies understand how it impacts the local IT employment market. Fact: An estimated 3.3 million jobs will be headed overseas over the next 10 years, 1 million of them in information technology. Fact: A significant number of those jobs will go to India, Asia and the Philippines where it is believed the quality of work will mature while costs are reduced. Fact: Numerous U.S. states are considering legislation to ban the hiring of immigrants in order to keep U.S. citizens employed. So, what should those in the industry do now -- panic or prepare? The companies leading the offshoring outsourcing efforts -- Siemens, MicroSoft, IBM, GE, and Dell -- all seem to agree that core development work will remain in the United States. In the case of the Fortune 500 and 1000 companies, the costs savings are significant when initial coding and help desk or call center work is outsourced. With their budgets and global reach, it can make sound business sense to set up an entity in a land far away with cheap, skilled labor. It keeps their doors open, the majority of their employees employed and their stockholders happy. In India, where the unemployment rate is nearly 20 percent, they are heroes and fueling an economy that in turn, fuels the U.S. economy. As does the work sent to the Philippines and Asia. Before panicking Legislation regarding how the offshore tech jobs issue will be handled is in its infancy. Only one state (Indiana) has made much progress, and legislation has made it through only one house. In the interim, there are numerous factors that many believe will keep the exodus of jobs in check that don't rely on the government passing laws (which has a downside as the U.S. works trade agreements with these same countries): * Intellectual property issues. * Political tensions in the areas involved. * The desire since 9/11 to rebuild the U.S. economy in a way that benefits the masses. In addition, the offshore development centers will readily admit that companies that are young in their development efforts have unique challenges that they can't address well, such as: * Founders of small to mid-size U.S. companies lack the depth of personnel, assets and experience to manage offshore work * Scope changes are slowed dramatically with time difference. * Business requirements change continuously, requiring developer accessibility. * As development proceeds, end user accessibility and communication becomes critical. Unless a company has a clearly defined, long-term project scope with minimal expectation of change or modification, the cost benefits of utilizing local, responsive resources outweigh the cost of outsourcing abroad. Getting prepared Even companies that benefit from outsourcing their basic development labor will continue to have a need for developer and support staff on site to create and increase product functionality and desirability for intellectual property reasons. In addition, in cases where basic coding moves offshore, there will be an even greater need for functional skills in the U.S. The success of any product comes down to functionality -- understanding what that is and then how to sell it. All applications require knowledge transfer from techie to user and back again. The way a developer grows his skills is by understanding the business need and benefits for the application and then incorporating those requirements with functional needs for the desired end result. With offshore job movement, the demand for developers with functional skills and business analysts with some coding skills in the U.S. will continue to grow. Most employers are looking for someone who can see the big picture as he works on just a piece of it -- an individual who can keep sight of the goal even if he can write the code that solves a Rubik's cube. For recruiters for local Houston and national corporations, the concern regarding job losses in the U.S. is valid. Since the last quarter of 2003, recruiting firms have struggled to find qualified people for position openings. As the government considers limiting H1 and similar visas, many companies will be challenged to fill some of the needs they have without access to those people. And technology recruiters often find someone with the perfect skill set only to find that that person does not have proof of the right to work in the U.S. Bottom line: In any employment market, the employee who diversifies his skill set the most broadly will be the most employable. i-Focus Corp., a search and recruitment
services firm for companies engaged in creating, delivering,
or utilizing technology. |
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