Careers: Offshore Outsourcing Hits U.S. IT Workers Hard

A new study shows that offshore outsourcing drives down U.S. IT wages; firm predicts up to 45 percent of full-time IT jobs could be outsourced by 2006

A recent report from salary research firm Foote Partners LLC says the net effect of offshore outsourcing has been to drive down wages in the U.S. In a study of 400 Fortune 1000 companies, Foote found that IT workers with specific skills are earning a premium of 23 percent less today than they did in 2001, while salaries for workers with certain certifications dropped by an average of 11 percent.

Even when the recession that began in March of 2001 is taken into account, Foote researchers say, the offshore outsourcing trend further depressed overall IT compensation.

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Foote projects that by 2006, as many as 45 percent of an IT organization’s full-time IT jobs could be outsourced overseas.

Hardest hit skill areas in 2003 were networking, application development, application maintenance, groupware and messaging, programming languages, call centers, and enterprise applications. Meanwhile, the IT jobs most likely to be outsourced were application development and maintenance, help desk tasks, and some database maintenance and programming tasks.

As far as overall compensation is concerned, Foote found that programming-related skills suffered among the steepest declines in 2003: Premium pay for standalone application development skills declined by 8.5 percent, while application development certifications lost nearly 18 percent of their value from 2001 to 2003.

Certain certifications—project management, security, and systems administration—have weathered the storm. Foote researchers say that as companies grow more comfortable with offshore outsourcing, their reluctance to send these critical jobs oversees will probably abate to some extent—especially when they can realize substantial cost savings.

Security is expected to be a strong sector for compensation growth, even in the face of the offshore outsourcing trend. In an earlier study, Foote found that Unix, Windows, and Linux security certifications actually increased by 12 percent in 2003. In its most recent study, Foote found that certain security certifications showed dramatic year-over-year increases: Certified Information Systems Auditor (25 percent); Certified Information Systems Security Professional (20 percent); GIAC Certified Windows Administrator (13 percent); and GIAC Certified Unix Administrator (13 percent).

About the Author

Stephen Swoyer is a Nashville, TN-based freelance journalist who writes about technology.