Are you endangered? Offshoring now targets corporate IT jobs

Offshoring and productivity gains are expected to blow away 750,000 enterprise IT jobs by 2017

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Although offshoring has blown away many jobs, gains in productivity cost even more jobs. Between 2003 and 2010, only about a quarter to a third of the job losses were attributed to offshoring. Although the report doesn't directly address technological change, there's no doubt that trends like cloud computing have eliminated many jobs that were done in-house or moved them to cloud providers.

Because the authors of the report count jobs lost to outsourcing within the United States as a productivity gain, it's not possible to pinpoint the number of jobs lost to technological shifts and various forms of automation.

Where the jobs remain

Speaking more generally, Erik Dorr, a co-author of the report, says that within IT, the losses are in what he calls "transactional-oriented" jobs, including help desk duties, data center operations, and "even routine coding." But "knowledge-centric" jobs in IT, like architectural design, business analysis, and program management, are in demand, he says. There's actually a talent shortage in that area, and companies are waging a war to attract the best and the brightest, he adds.

That last point tracks with other research that I've seen recently. After years of declines, the value of IT certifications has finally started to grow, in particular for specialties like architectural design, according to Foote Partners, which surveys IT salaries and premium pay across more than 2,400 employers. (But don't confuse spot shortages of talent with an overall shortage of IT professionals. There isn't one.)

Dorr and his colleagues point to another trend reshaping the enterprise job market: the rise of what they call global service organizations. "Unlike most shared services operations, which focus on a single function, GBS [global business services] organizations strive to support an array of business services, including finance, IT, procurement, and human resources, in an integrated fashion," they write.

Enterprises that turn to a GBS model reap substantial gains in productivity, "with typical companies seeing an average of 20 percent cost savings in their first year of GBS operations, and 6 percent savings annually thereafter." Unfortunately, the savings will also result in job losses, particularly for holders of commodity skills.

Overall the message is apparent: The IT job market has changed radically, and professionals who can't change with it are in a tough spot.

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Copyright © 2013 IDG Communications, Inc.

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