Offshoring Eats Away at IT Pay, Study Shows

As IT jobs such as application development and maintenance get shipped offshore, pay for remaining, domestic IT jobs continues to slide. A recent report shows the vulnerable and secure positions.

The offshoring of IT jobs caused IT salaries to slip for the third quarter in a row, according to new research from Foote Partners LLC, a management consultancy and IT workforce research company.

Some of the findings on premium pay for certifications and skills were:

  • Stand-alone applications development skills fell 8.5 percent in 2003.
  • Application development certifications lost almost 18 percent of their value of the past two years.
  • Webmaster/Internet certifications were down 22.7 percent in 2003.
  • Beginner certifications such as the MCP (Microsoft Certified Professional), CCP (Certified Computing Professional) and CompTIA A+ were down 13.6 percent.
  • Database certifications fell 9.4 percent.

Foote Partners research detected the trend a year ago but refrained from reporting on it until the company could ascertain whether it was being caused by the sour economy or by offshore outsourcing, according to David Foote, president and chief research officer for the New Canaan, Conn., research firm.

Foote Partners pegged offshoring as the salary-eroding culprit after interviewing executives who are offshoring, executives at the middlemen companies that are contracting with offshore companies, and those IT workers whove dealt with jobs being offshored at their companies.

/zimages/4/28571.gifStorage Center Editor David Morgenstern recently wondered if offshore outsourcing was a "natural law." Click here to read more.

Foote Partners has been tracking IT salaries since 1997 and, as such, can put the current IT salary and bonus-pay slide into historical perspective.

"We first started noticing offshoring pressures on stateside compensation early in 2003," Foote said in a statement. "Premium bonus pay for segments of IT skills and certifications that had been performing steadily in our quarterly research began to slide noticeably. These segments coincided with many of the same employment categories that have been most susceptible to offshore outsourcing."

Next page: Whats not getting offshored?