Monday, November 17, 2008

Offshoring up slightly in 2009 but a new IT labor shortage will be real, even in recession

Phil Fersht has an article in CIO “Will the U.S. Recession Mean the End of Offshore Outsourcing?: The economic recession in the U.S., and President-elect Barack Obama's tax incentive plan, will change the economics of some business process outsourcing areas. Could offshoring go the way of the dinosaur?” The link is here. The article stresses the need for improving technology and basic science education, but admits that many of the individual contributor, coding and unit testing jobs have been effectively offshored and that pull back is not that likely. But companies are likely to find the need to keep a huge number of areas of specialized talent, ranging from security to capacity planning, onshore. Recession might actually discourage offshoring in some cases, and president elect Obama has pledged to help companies keep their jobs onshore.

Jason Hiner refers to this article in his Tech Republic “Sanity Check: The IT Labor Shortage Is Real and Offshoring Is Overblown” (except for COBOL programmers, maybe). The link is here. The article has plenty of “Jake Gyllenhaal’s pie charts” (Rendition) that show that offshoring is still a small part of IT budgets, although it will increase somewhat in 2009. The link is here.

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