Offshoring is creating a divide in the UK technology industry by reducing the proportion of mid-level software-development jobs available in favour of higher-level management roles, research has claimed.
A report by IT staffing company ReThink Recruitment has found that the proportion of jobs created in software development in the UK has fallen by six percent in the past year, from 34.3 percent of new IT jobs to 28.5 percent.
During the same period, the proportion of IT support jobs — which are often seen as at risk from offshoring — has fallen from 24 percent to 21.9 percent.
But the highest-paid IT work, such as consultancy and management, is taking up a larger proportion of IT jobs in the UK.
The research sampled around 30,000 new IT roles from ReThink's own job postings and a range of other online job boards and recruitment websites.
ReThink said this shows a global division in labour in IT, with the UK specialising in project management and consultancy, and developing countries involved in the more technical areas.
The demand for consultancy work is being fuelled by post-merger integration activity and a rise in public outsourcing, the research said.
ReThink Recruitment managing director Jon Butterfield said the fear that higher-value jobs could be offshored — rather than just help-desk roles — is having a major impact on the UK technology jobs market.
But Butterfield added that, when wages for software specialists in India hit 40 percent of those in the UK — potentially in five years — offshoring these jobs will stop making financial sense.
Talkback
The cost of off shoring to India is very often seen as a purely financial decision based on cost per head of replacing employees within the UK. This is not however the true cost of off shoring with many bean counters in the UK and elsewhere failing to see the bigger picture. Software development for instance can be off shored with a perceived reduction in development costs but the resulting code is rarely of good quality and there is much greater expense in reworking and support over the life of software developed in this way. As a consultant who has to deal with off shoring on daily basis I very often see no savings at all over the lifetime of a software product, and in some cases actually see projects costing a fortune to rework. While it is also true that help desk activities can be off shored this tends to never provide as good a service than in house provision. The costs of poorer service and lost time tend to be hard to calculate so again the perception is that money is saved. I think it will be far less than five years before the economic realities of the true cost of off shoring are seen by businesses in the UK. Many businesses who rely on off shoring are already staring to see even perceived benefits dwindle. In the long term we are also storing up problems for the future by off shoring so much of our IT work as tomorrows IT managers are not currently being employed in lower level jobs within the industry because these jobs no longer exist here. Inflation in India is a ticking time bomb for the IT industry in the UK and companies are going to be in real trouble when it goes off.
The idea that software development conducted in off-shore destinations is not as thorough - is an interesing perspective - but not sure how you quantify if it's really a widespread problem or the situations you have experienced are limited and isolated.
Can anyone else shed any light on this issue?
I'm one of those lucky people that is going be out of work shortly thanks to offshoring.
We had review 'period' to see how well it could work, although to be honest it felt as if the decision was already made.
Then after the results showed that sending work offshore resulted in a degrade in the quality, the company still 'decided' it was a good idea.
Currently we are in the process of training them up on our systems.
After the telephony offshoring bubble burst and this current one does the same, I wonder what will be next. Postal services maybe?
I have worked in the industry for many years and in that time have become friends with people across a broad spectrum of the industry. The consensus amongst most of the people I know is that off shoring does adversely effect quality to some degree and in too many cases to a great extent. Off shore companies are simply jobbing shops when all is told and want to get software out of the door as quickly as possible to maximize revenue. In house development comes from a different perspective and that is where quality issues arise. I have trained off shore workers who have told me that my techniques and methodologies, to produce clean maintainable code, just would not be tolerated back home because of the treadmill culture that exists there. This is a scenario that has been relayed to me time and time again. As projects either fail or are delivered barely working by off shore companies. It's not the skills of the off shore workers that are at fault either as many of them are better than me or at least my equal but due to the situation they find themselves in being thousands of miles from the client and relying on everything to be discussed over phone at odd hours of the day. This is only compounded by the attitudes of the companies they work for.