Long-Term Effects of Recession Expected to Hurt U.S IT Jobs

 
 
By Don E. Sears  |  Posted 2009-11-30 Email Print this article Print
 
 
 
 
 
 
 

While the outsourcing of back-office IT jobs to offshore countries is not a new trend, the effects of the global recession have some U.S.-based tech jobs in serious long-term jeopardy. Despite the large number of back-office job eliminations for the foreseeable future, there are a host of IT jobs that will stay stateside.

There are a number of technology jobs and job areas that will not be coming back to the United States anytime soon, according to a study by global consultancy The Hackett Group.

Between 2010 and 2014, nearly 2 million back-office IT jobs in infrastructure services, help desk and data centers are expected to be lost. Many of these jobs will go offshore, a trend that has been exacerbated by the economic pressures of the 2009 recession. Miami-based Hackett estimates that nearly 300,000 of these types of IT jobs have been eliminated in 2009.

"There are some companies that are exploring the use of home-based employees for this, or who are trying to take advantage of low-cost labor markets in the U.S.," said Hackett Global IT Practice Leader Honorio Padron to eWEEK. "But it's very tough to compete with the labor rates in the Philippines or elsewhere."

It's not only IT that is feeling the pressure. Roughly 330,000 finance, human resources, procurement and administrative jobs were eliminated in 2009, estimates Hackett in its study of 4,000 global companies with a minimum annual revenue of $1 billion. Looking longer term, close to 1.6 million general and administrative (G&A) jobs will be eliminated or moved offshore. 

Yet, there's no denying that U.S.-based back-office IT jobs are some of the hardest hit of the lot. Outsourcing to Asian countries in Singapore, China, India and the Philippines is expected to expand.

"Another factor is standardization, which is driving the rationalization of IT services. Companies are realizing they don't need 24 help desks and 10 data centers," said Padron to eWEEK. "And as they consolidate, they're likely to close domestic facilities and expand facilities they might have in places like Singapore." 

Software and application development has its share of U.S.-job loss risk, warns Hackett's Padron:

"As companies focus on application rationalization, people who develop and maintain software are also at risk here. There's a real acceleration in companies' move to decommission existing applications and consolidate applications with similar functions."

Despite the large number of back-office job eliminations for the foreseeable future, there are a host of IT jobs that will stay stateside. 

"Positions that focus on strategy, architecture, project management and relationship management are safer because you want someone doing that work who is plugged into the company and can act as the representative to the CIO," said Padron. "Performance management roles are also in that category to some extent."


 
 
 
 
 
 
 
 
 
 
 

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