Some people argue that the golden age of software offshoring ended in 2005. Between 1995 and 2005, when the dollar was strong and the post-communist countries were felled by low wages, there was often a 5-to-1 cost advantage borne by outsourcing IT development projects.
In 2007, reports of rising wages, high turnover and the fact that foreign software talent need not turn only to the United States for work have led some to declare that offshoring is sputtering to an end.
This was the topic of an Oct. 9 blog entry by Andy Singleton, president of Assembla, a global staffing consultancy that also provides online work spaces for development teams.
“There was a time not very long ago when, really, you didnt have to be very smart to realize that to reduce cost, you could just ship the work to a different place, and that it was virtually impossible for a U.S.-based programmer to compete in this market,” said Singleton.
However, he said, it was a simplistic model. Now that the price advantage is disappearing, managers dont have the easy option of just moving work and hoping that cost advantages cover any inefficiencies. They have been forced to work smarter or not offshore to gain cost advantages alone.
Does this mean that the IT professionals long international nightmare is over? Absolutely, Singleton told eWEEK.
“IT workers in the [United States] can breathe a sigh of relief. They are becoming price-competitive with their most numerous competitors in India, which is one reason that demand for U.S.-based staff now exceeds supply. IT workers in other locations are also doing well,” he said.
But others disagree, arguing that IT professionals need to be as worried as they ever were about losing their jobs to someone who works for a lot less.