It was about five years ago when Forrester Research made its startling claim that 3.3 million American jobs, including 500,000 technology jobs, would be lost to offshoring by 2015. Vigorous debate over offshoring was already underway, and the report gave opponents what they believed to be the strongest evidence yet of offshoring’s adverse impact on America for the long term.
Yet, the outcry was not enough to suppress market forces that compelled companies to seek global sources of labor. Despite the greater use of outsourcing, the American economy and job market have not collapsed. In fact, in the last five years the economy has added about eight million jobs. Employment in computer systems and design services, which was expected to be one of the biggest victims of outsourcing, has grown 22 percent since 2002, with the creation of 240,000 new jobs.
Job Creation in Technology Sector
Employment in the technology sector is expected to continue this strong growth through 2010 and beyond. Projections from the Bureau of Labor Statistics indicate that by 2014 employment of computer and systems managers will expand by nearly 26 percent or about 73,000 jobs. The number of software engineers is expected to increase by 46 percent (367,000 new jobs). Jobs for system analysts and computer-support specialists will grow by 272,000. Additionally, employment among network and computer-system administrators will increase by 107,000 jobs while network systems and data-communication analysts will add 126,000 jobs.
In other words, this sampling of tech-sector job categories is expected to experience a net gain of nearly one million jobs by 2014. Even if Forrester was accurate in its 2002 estimate of 500,000 lost tech jobs to outsourcing by 2015, it appears that it will have little impact on the overall job growth in the sector.
Many middle managers in the technology industry from low-cost countries will shift to the U.S.A., while U.S. companies will move several C-level execs to offshoring destinations
Professionals with the experience of having worked in offshoring locations and with service-provider teams will be in demand.
Driving the growth of tech-sector jobs is the fact that baby boomers will be leaving the workforce en masse. Additionally, the ever-expanding use and demand for technology in the U.S.A. and around the world guarantees employment for those who can create, manage and repair that technology. According to IDC, global IT spending is projected to increase at a compound annual rate of 6.3 percent and reach nearly $1.5 trillion by 2010. Technology workers from China and India will not be able to meet that demand alone.
Further evidence of the continued demand for technology workers can be seen in the latest data on starting salaries for these individuals. The latest data from the National Association of Colleges and Employers shows that the starting salaries being offered to computer-science graduates are the highest in seven years. Entry-level workers earning computer-science degrees in 2007 were offered an average starting salary of $53,051, up by 4.5 percent from last year’s level. Graduates with management information systems degrees were offered average starting salaries of $47,407, up by 4.7 percent from 2006.
Elusive Job Security
While job creation in the technology sector is likely to remain strong over the next several years, does this necessarily translate to increased job security? Unfortunately, it does not. A number of factors, including outsourcing, will contribute to a decline in job security not only for workers in the technology sector but for workers in all sectors.
Due in large part to an increasingly competitive global economy, companies are required to be more flexible and agile than ever in all facets of their operations, especially staffing. It is not unusual to see companies adding and eliminating workers simultaneously. They could be sending some jobs offshore and bringing others to America. Some might opt to bring in workers from other countries to write computer code, while at the same time transferring an American worker overseas to manage a distribution facility.
By 2010, companies will be outsourcing, insourcing and multisourcing. Globalization, technology and the increased utilization of just-in-time operational platforms are just a few of the contributing factors in the loss of job security.
As companies become more flexible, so must workers. For those in the technology sector, this could mean a greater willingness to go wherever the jobs exist. It could mean increasingly working on a contract basis. It will definitely mean keeping up with or ahead of the latest developments in your specialty.
Who Will Succeed?
Those who can speak the language of business will stand out. Technology is no longer a back-room process that simply keeps business operating efficiently. As a result, tomorrow’s business leaders must be well versed in technology and technology leaders must be well versed in business.
The biggest winners in the job market will be the New Americans, highly educated, with roots in Asia, Africa, the Middle East and Latin America, matching the diversity of the increasingly global marketplace. They will stand out and offer leadership and exceptional skills. Chief among these skills will be the ability to speak and write a second, third or even fourth language. Understanding the culture, politics and business dynamics of other countries, especially in the new economic zones, will also be crucial to long-term job growth in this country.
Within the more business-oriented, globally driven technology job sector, the workers who will be in high demand will include information-security specialists, those who can efficiently store, manage and access the growing mountains of data that companies are amassing, and those who can leverage the Internet to maximize interaction with suppliers, customers and stakeholders.
John is CEO of global outplacement consultancy Challenger, Gray & Christmas, the firm that pioneered outplacement as an employer-paid benefit in the 1960s. John has served on the labor/human resource committee of The Federal Reserve Bank of Chicago and delivered testimony before Congress on the impact of offshore outsourcing.