- State governments are considering outsourcing: Despite public opposition, state governments -- faced with the conflicting demands of shrinking budgets and the need to revamp aging IT infrastructures -- are beginning to look at outsourcing as a solution. The once resolute "no" attitude is shifting toward a subtle "maybe," and some states are tentatively moving forward.
- Privacy and data security are at issue: Liability over data and privacy issues has emerged as a key point of contention in outsourcing negotiations. Where once outsourcing vendors expressly limited their liability for breaches, 2011 was a watershed year for companies pushing vendors for greater accountability regarding data security. In many cases, the concerns over security and liability have trumped economic considerations when it comes to closing deals.
Is just the usual election-year shell game on labor issues?
Politicians know they can score points with voters by railing against companies that take away jobs from Americans by offshoring, Ford says. But the talk mostly peaks during presidential-election years, then fades away. One big reason: Politicians, for the obvious reasons of who pays for their campaigns, listen hard to businesses that want to outsource or keep the tax breaks they receive by earning profits overseas.
Still, a recently proposed bill, the U.S. Call Center Worker and Consumer Protection Act, may indicate whether political sentiment has shifted in employees' favor. This bill would make it difficult for companies to get federal loan guarantees if they offshore call centers. If passed, the bill would also require companies with offshore call centers to register with the Labor Department -- a move that would publicize those companies' use of offshore resources. (The Morrison & Foerster doesn't expect this bill to pass, calling it essentially election-year pandering.)
And President Barack Obama attacked offshoring in his recent State of the Union address, urging businesses to bring jobs back to the United States. He also renewed his appeal for visa reforms to keep foreign students from returning home after earning advanced degrees. While neither Ford nor I believe the president is merely posturing, I doubt that Congress will do anything about these matters.
Regardless, something seems to have changed in the public discourse. As an example, the report notes that not long ago you'd read in the Wall Street Journal companies boasting of big offshoring deals. Not anymore, Ford says. Now companies know that offshoring makes people mad, so they're quiet about it.
IBM layoffs: 1,100 and rising as jobs go offshore
Coincidentally, the Morrison & Foerster report was published shortly before news surfaced of IBM's layoffs. Alliance@IBM/CWA Local 1701, an IBM employee advocacy group, reports that 1,148 IBM workers have been let go this week, with more to follow. Most of the job cuts appear to be within the United States, with a high concentration in IBM's Global Technology Services outsourcing unit.
John Paczkowski of All Things Digital was one of the first reporters to notice the layoffs, and he interviewed the labor group's national director, Lee Conrad, who said offshoring is driving the reductions. "Those jobs are moving offshore, which seems to be the trend at IBM. ... This is a further abandonment of the U.S. workforce. When IBM talks about rebalancing, what they really mean is moving jobs from the United States to overseas," Conrad told AllThingD.
Need I say more?
This article, "IT jobs on the rise -- both offshore and in U.S.," was originally published by InfoWorld.com. Read more of Bill Snyder's Tech's Bottom Line blog and follow the latest technology business developments at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.