August 22, 2007 5:55 AM PDT

Survey finds increasing uncertainty over offshoring

Offshoring is viewed with increasing ambivalence in the IT industry, according to the exclusive 2007 Skills Survey from CNET News.com sister site Silicon.com.

A third of respondents to the survey agree or strongly agree with the statement "I feel that offshoring is a threat to my current job"--a very slight increase on last year's result, when 32 percent feared that their job could be sent abroad.

At the same time, the number of people who don't view offshoring as a threat dropped to 41 percent, from 44 percent last year.

The proportion who aren't sure whether offshoring is a threat stands at 23 percent--a rise of six percentage points on 2004's figure, suggesting increasing ambivalence about the impact that offshoring is having on U.K. tech jobs.

A recent report by not-for-profit research organization The Work Foundation found little direct evidence of significant job migration due to offshoring in Europe, yet public opinion often runs counter to that.

A recent Silicon.com reader comment typifies the fears generated by offshoring. "If (offshoring) keeps up, we won't have an IT industry in this country, as the only people working in IT will be non-technically literate managers," reader Karen Challinor wrote.

However, according to The Work Foundation report, Indian workers don't see things that way. "Indian business insiders see future offshore outsourcing as an advantage for Europe, enabling it to focus on the 'thinking part of the job,' providing opportunities for 'better jobs' and 'knowledge work' in Europe," the report said.

When it comes to specific job roles, rank-and-file IT workers have the biggest fears about offshoring. More than two-fifths of software and Web developers responding to the Skills Survey agree or strongly agree that offshoring is a threat to them, while two-fifths of IT pros feel the same way.

This compares with less than a third of CIOs, and just over a third of board-level executives and IT managers.

Nearly two-thirds (63 percent) of survey respondents agree or strongly agree that IT jobs that involve business skills are less likely to be outsourced offshore than jobs involving only technical skills.

Natasha Lomas of Silicon.com reported from London.

See more CNET content tagged:
offshoring, offshore outsourcing, survey, information technology worker, Europe

36 comments

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Of course they see it as an advantage
first and foremost for their own profits. First it's the "lowly", "non-thinking" (what an insult!) jobs, and once they are all gone abroad, the "thinking-part", "knowledge work" jobs are next. India has a highly educated workforce (increasingly so), and they won't stop at writing code for us.
Posted by baldeagle1996 (1 comment )
Reply Link Flag
the problem with india and many other counties
is that they are unable to create enough product demand in their
own county, thus always expecting others to buy their goods and
services. germany is a prime example of this. consumerism has a
somewhat negative conoatation there, having things that are big
(cars, houses, whatever) is frowned upon. but hey, they expect US
to buy THEIR stuff to keep their economy humming along.
Posted by palex9 (6 comments )
Link Flag
Offshoring
The process of moving your expertise to other companies so they can better compete against you in the future.

See also: Slow suicide.
Posted by Renegade Knight (13748 comments )
Reply Link Flag
i agree 100%
we are slowly but surely building up our enemies, like china, while
our brain dead and useless politicians do nothing (or are getting
their pockets lined by countless lobbyists). i guess they
(erroneously thought) that if we get them hooked on materialism
they will be our friends...now they have our jobs, our money, and
we are competing for natuaral resources. well done, boneheads in
washington!!!
Posted by palex9 (6 comments )
Link Flag
Leaked Strategic Tech Support Secrets?
No, seriously... most companies that outsource don't give away the company vault when they do it.

Tech companies delegate things like assembly, tech support phone jockeys, and etc... not things like marketing, R&D, sales, or the like. The really high-end tech companies keep their top-end latest-and-greatest product production in their home nation's borders as well.

I find offshoring to be disconcerting in some ways, but the aspect you mention isn't one of them. Sorry.

/P
Posted by Penguinisto (5042 comments )
Link Flag
How about....
... developing/advancing your skills so that the competition any part of the universe do not catch up with you... never ever!

Have a nice day folks. Very busy.

Commander_Spock
Posted by Commander_Spock (3123 comments )
Link Flag
Bankruptcy
The process of not reducing your cost by offshoring but we (Americans) still wanting cheaper goods.

See also: ignorant.
Posted by csg7 (81 comments )
Link Flag
digging our own grave
of course the indians will find a gazillion reason why offshoring
is good for us. the truth is, we are outsourcing tens of
thousands of jobs, and the results are questionable at best. do
you like to talk to somebody in india, the philipines, whereever
where there is a problem with your credit card? i dont, thats for
sure! i stopped buying dell computers when they outsourced
their c.s overseas. i took around 5 calls instead of 1, like it used
to be, to solve any somewhat more complex problem. sure, the
people were generally very polite, but thats not the main issue
when you call c.s. i hope u.s. companies will soon realize that
they are hurting themselves by hurting our middle clas..
Posted by palex9 (6 comments )
Reply Link Flag
Pfft! Offshoring ain't all it's cracked up to be.
Ever worked with an offshore project?

Seriously - between language barriers, cultural barriers, an often HUGE time zone shift, and the constant time and budget overruns? You'd be better off in most cases hiring your developers and such locally.

Even if the avg. offshore worker's wage is only 1/10th that of a local one's, delays and frustrations don't make it worth the savings.

Also, over time that cost savings isn't so large. Already, the average programmer's wage in, say, India and China, is rocketing skywards. Soon, it'll cost a company just as much in wage overhead there as it does in the EU or US.

From a democracy standpoint, I like the appeal of seeing rising living standards elsewhere creating healthy, peaceful rivalry. I also like the fact that nations whose economies rely on each other heavily in such a way are less likely to be firing ordinance at each other.

OTOH, unless you have every last detail of a project delineated and you come across no surprises, it's not all peaches and cream in outsourcing.

/P
Posted by Penguinisto (5042 comments )
Reply Link Flag
Correct
Also reduce the H1B visa cap to make the outsourcers job harder to keep their "cheap" labor. No engineer from china or india wants to work for less money than a US engineer.

In the end only thing that allows this big salary discrepancy is the fact that you are not allowed to work in any country, however your company is allowed to sell their services to almout any country.

this might result in lower overall wages in the us, or maybe it will allow the US to get the best people from overseas and as a result continue to be the economic leader in the world ... No company will hire idiots only because they are cheap ...

...
Posted by zolyfarkas (20 comments )
Link Flag
The Reality
What happens when everyone is better than average? ;-)

Sorry guys, but it really does not have much to do with "skills" - it has everything to do with the "bottom line" of the company. If your company decides that it can save money by shipping your job to India, your "skill level" no longer matters. Once your company has exported your job to a 3rd world craphole, its competitors must also do the same in order to maintain their viability, so a "side step" to a similar company no longer is an option.

Do you think that the "skills" of the Chinese factory workers are better than the skills of those in the UK or in the US? The skills are not any better nor worse, the "skill" of the Chinese factory worker is working for 65 US cents per hour, under intolerable conditions by Western standards.

I leave in an area in the US that was formerly populated by tech companies which have since sent thousands of jobs offshore. Driving through the mega campuses at night, it is painfully obvious that the overwhelming majority of the buildings are vacant - no furniture, no employees, no nothing. Every vacant seat, every vacant parking space belonged to a mother, father, husband, wife, etc. whose job and livelihood have been shipped off to some 3rd world craphole where the workers will joyously work for 1/10th the wage.
Posted by DecliningUSDollar (56 comments )
Reply Link Flag
Gooldman Sachs Runs The Country
Basically Goldman Sachs and the the other investment bankers run this country. Capital flows out of the U.S. to overseas investments that yield a higher rate of return. The U.S. is a stagnant, flat economy. If you factor in the true rate of inflation (10%), and factor out government deficit spending and the speculative bubble of the housing industry, you see that we are an economy in decline. Politicians can lie all they want about the true state of our econonomy but eventually reality will catch up with fantasy.

I heard that delusional Prez candidate John McCain on Charlie Rose. He was talking about retraining unemployed factory workers. Like this is a new idea? Seems I heard this crap 30 years ago when we first started losing manufacturing jobs. Oh, and then in the same breath John Boy said that the U.S. is as competitive as any country in the world. Competitive in which industries John Boy? Investment banking, yeah that is it. Goldman Sachs rules the world.
Posted by Stating (869 comments )
Reply Link Flag
Agreed!
See also: trilateral commission (google or wikipedia)
Posted by CompEng (201 comments )
Link Flag
Offshoring opens up opportunities
Over the past 3 years I've worked in 3 jobs, the previous two were both offshored (first one to India, next to Costa Rica). I'm currently earning twice as much as I was 3 years ago and enjoy the job better.

Offshoring certain positions frees companies of costs and allowed them to better compete in world markets by investing more capital. It has also forced them to be more innovative and improve productivity and even to take the occasional risk. It also frees up some costs to pay for employees "further up the food chain", so to speak, which is how I've managed to move up. If you're worried about your job being offshored, the best way to prevent that is to work hard and get yourself promoted.

AS always, the solution to this is to encourage companies to be more competitive in a global market. Protectionism, under any guise, always ends up being a bad thing in the long term.
Posted by Hoser McMoose (182 comments )
Reply Link Flag
Not so sure
"Protectionism, under any guise, always ends up being a bad thing in the long term."

This bit of sophistry is too simple to be right. In some cases, protectionism can be viewed as an investment. For example, consider a subsidy to Airbus: cheap guaranteed loans from French government.
The government will be repaid at a greater rate than the money loaned to Airbus, Airbus can take on bolder projects, and this increases their competitiveness. And if the load is at a greater risk than other market actors will provide, this is still ok from the French perspective since the economic benefit of increased jobs and technical innovation are also paid to France.
This subsidy was a net positive investment (for France), and if you squint enough, you can show equivalent cases for other forms of protectionism.

Now, many investments fail, and so protectionism is by no means a guaranteed strategy, but it can work quite well. In fact, the more hostile the trade climate, the more likely it is to work and the less the use of public funds for investment is to be abhorred.
When foreign protectionism and a large trade deficit are damaging your long-term competitiveness, measured protectionism is a logical response.
We are rightfully wary of applying protectionism for the reasons Milton Friedman pointed out, and so we should not trust governments with power except when the alternative is worse. But I fear that it is.
Posted by CompEng (201 comments )
Link Flag
Sure it does
Yup - opportunities to join the unemployed, chronically underemployed and Walmart always has openings for their everday low price of minimum wage.

I currently sit home and let you pay my income and insurance because it pays better than the real world... now that 1 out of 4 with IT degrees are sitting home or flipping burgers.

Your 35% taxes at work... Yay for outsourcing!
Posted by ThePoke (16 comments )
Link Flag
Management Should Be Outsourced
It's the bean counters and business majors (aka administration) that generally love outsourcing IT so much. If outsourcing is so great, then their own roles could be outsourced as well. But of course that will never happen.

I don't think outsourcing is about cost avoidance. It's really about who has the power in the work place. It's IT professionals vs administration.

For example, a typical software project could be handled by two well payed and talented IT employees. They can gather user requirements, define a functional spec, facilitate consensus, then write/test/deploy the software.

Or the same software project could be handled by two well payed administrators. They can gather user requirements, define a functional spec, facilitate consensus, then author a very detailed functional spec that (hopefully) has no ambiguity. Then they work with low-cost offshore IT staff to write/test/deploy the software.

In my experience, scenario number two usually results in higher cost, lower quality, and a final software product that nobody knows how to support. And the usual answer to that issue is yet more administration.

Administration also loves to create tons of useless red-tape and rules for IT to follow. That way they can make in-sourced IT less efficient. Yet more justification for outsourcing, as well as a clever tool for monitoring/controlling the activities of IT.

But it's not just IT...

I have relatives who are medical professionals. This same power struggle is happening in the field of medicine. But in their realm, it's medical professionals vs administration.
Posted by open-mind (1027 comments )
Reply Link Flag
companies who offshore
If the majority of your staff is offshored then you should leave USA and usa citizens should stop buying your products.

Companies bite the hand that made them great.

Every company wants to save a penny at any length but a what cost? Polo shirts are no longer the quality they once were. They used to make them with long tails in the back so people don't see crack but now polo shirts are like all the rest and ride up my back.... this has been going on now for well over 17 years and IT HAS TO STOP!

Polo used to sell preshrunk cotton polo shirts but they dont anymore.... cutting corners....
At what cost? Quality.. Polo is not the brand of quaility anymore.
Posted by inachu (963 comments )
Reply Link Flag
So you're saying...
...just say no to crack!

Sorry, couldn't resist. :)
Posted by J_Satch (571 comments )
Link Flag
when american companies go overseas....
When coca cola & pepsi were allowed entry to India in late 80's as part of opening up the economy, the leading soft drink brand in India, was decimated because it could not compete with the marketing and distribution muscle of Coke & Pepsi. Thousands lost their jobs and this story was repeated in different business sectors in different parts of the world. They squeezed out the players and then after establishing themselves squeezed everybody in the supply chain to increase their profitability and stock prices. Americans were the ones who benefited most because of the boost to economic clout of these international companies. Now they cannot sustain the same growth and they are squeezing further up on the supply chain...the american worker. No one listened to the plight of those workers, companies and small business owners in the developing world. Now that the shoe is in the other foot....
Posted by akve (2 comments )
Reply Link Flag
Wake Up
Globalization is here to stay. The only way to survive is to improve ourselves, to prepare to compete. You cannot expect to do the same thing for years and maintain your job. Everybody has to improve with time, what does it mean? Work! Think! Prepare! Educate!

Don't take anything for granted, if you do, you will encounter unpleasant surprises.

China and India are preparing their youth to compete in a global environment, Let us ask ourselves, Is America doing the same?
Posted by pdelagar (6 comments )
Reply Link Flag
Surveys are good for business
There is a market research for online shopping store. Please do visit and complete the survey. This would take 3-5 mins but may provide the course for an e-commerce store. Get Online Shopping Survey at

<a class="jive-link-external" href="http://www.materialwords.com/survey" target="_newWindow">http://www.materialwords.com/survey</a>

Cheers
Posted by Rehan M (1 comment )
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