Fearful report for IT services workers?
The report, from United Kingdom-based Bullhound, focuses attention on IT services companies and is bullish overall about the offshore trend. "IT offshore outsourcing is here to stay, and we believe that a vast majority of companies will eventually have to adopt some kind of dual-shore delivery model," it says.
That model is heavily stacked with workers on the lower-wage shore, according to Bullhound. "A 70/30 offshore/on-site staffing mix is increasingly being considered 'optimal' by the industry from a profitability and execution perspective," the report says.
One argument in favor of an unbridled global market in tech software and services is that lower prices will promote wider use of IT in the U.S. economy and therefore lead to greater demand for IT skills in the United States. If this theory turns out to be true, thousands of U.S. techies at companies like IBM and Electronic Data Systems presumably would be able to find work, even if much IT work is done in places like Bangalore.
If the theory is bunk, and the U.S. doesn't take steps to curb offshoring, U.S. technology workers may face a bleak future. On the other hand, there are signs that tech operations in the United States can thrive amid offshoring, which isn't always ideal.
What's more, big tech services companies may be slow in moving work abroad, according to Bullhound. "Due to the size of companies like IBM (319,000 employees), it will take years before these companies can significantly shift their delivery mix," the report says.
