Offshoring Will Drain Another 450K Tech Jobs by 2014: Report

The facts on offshoring are not going to make back-office IT workers happy, but the reality is that there is opportunity to get global experience. The chief research officer of the Hackett Group talks to eWEEK about the business drivers for offshoring and how tech workers should adapt.

Programmers, data center operators and application developers: Take heed. The facts are hard to ignore.

When it comes to where business and job growth are happening in the world, it's not in the United States, according to a report from the Hackett Group-a strategic advisory company that benchmarks global business trends and tracks the offshore job market.

The title of its November 15 report says it all: "Offshoring Driving a Jobless Recovery," and the headline that reads across the opening page is like loud, clanking hammer on a signpost: "2.8 Million Business-Support Jobs Eliminated Since 2000; One Million More to Disappear by 2014."


So, the one million jobs lost to offshoring by 2014 also include finance, human resources and procurement positions, but IT is set to lose roughly 450,000 in the United States, Europe and Canada, estimates Hackett Group chief research officer Michel Janssen, who spoke with eWEEK about the report.

"This is not exactly new, but it is a continuation of a trend that has been ongoing and is now reaching beyond IT," said Janssen, who authored the report based on benchmarked data from 3,800 U.S. and European companies with an annual revenue of $1 billion or more. "Commodity programmers, maintenance positions in the data center and some higher-level application development jobs are at risk. There were 4 million back-office jobs in IT in 2000; there are now 2.4 million, and that number drops to 2 million by 2014."

Yet, the recent offshoring trends show big changes afoot for finance professionals, said Janssen. Accounts payable clerks and transactional people are losing work to overseas hiring, as are workers in more skilled analytics jobs . Offshoring is moving up the value chain and into the process group levels.

"The whole world is going global, and especially in the last three or four years, it has really taken off," said Janssen. "The revenue growth is in Asia-with some in Europe, but [revenue growth in] the United States is virtually flat. The jobless recovery here is very, very real. The war for talent in the United States [consists of] finding those who have skills to manage a global group-those who have global awareness and understand the complexities in doing global business. It's only a handful of people right now."

For technology professionals who wish to avoid being offshored, Janssen advises them to understand international business contexts, sharpen their finance skills, and learn the importance of cultural tolerance and sensitivity to the way people in other countries operate.

As someone who manages a team of 40 researchers in India, Janssen has seen firsthand how significant it is to improve your own listening and communication skills, and to adjust to managing teams of people you rarely see. He also stressed the importance of collaboration technologies and the ability to adjust to working hours that are not traditional in the United States.

Janssen also said that it is important for IT workers to build global skill sets, to learn how work is done offshore, and to educate themselves on projects and teams that work with offshore components either internally or through a service provider. Learn about business context and focus on the customer experience, Janssen advised.

What about IT workers who do not seem to understand what going global means or who are upset by the changes in the business world?

"Whether or not your company is going global, many brands are geared for global markets. ... There are airplanes for global markets, Coca-Cola and the like," said Janssen. "Political boundaries are not as important as business boundaries anymore. Money will follow resources and human capital. ... And most important, when you see these places with your own eyes-India, China, elsewhere-these countries are viable."