Outsourcing Creates Job Transitioning

As the market for network outsourcing services increases, the need for in-house network professionals is decreasing. But with more and more companies turning to outsourcers for their networking and managed services needs, is there a declining demand in the field overall for network professionals?

According to David Woelfle, chief architect for infrastructure at EDS Canada in Toronto, unemployment is not a concern for those who can operate or build a network. EDS has approximately 6,300 employees scattered across Canada, of which more than 90 per cent are of the techie persuasion. In any given month, Woelfle said he is trying to hire between 20 and 30 network professionals.

“So if there’s unemployed network managers out there, I can’t find them,” Woelfle said. He added that most of his clients retain some or all of their network architecture layer and outsource the transport or management of the network, often both.

There’s no argument that network outsourcing is a growing business. According to Jason Bremner, senior analyst, outsourcing services at International Data Corp. (IDC) Canada in Toronto, there are a lot of new companies specializing in outsourcing and managed services, but the leaders in the market are Bell Canada, AT&T Canada, Telus Corp., IBM Canada Ltd. and EDS.

“The need for network services is increasing, whether it’s done through an outsourced service or done in-house. And as companies recognize that, the overall activity level will increase, meaning they’ll need more resources, period,” Bremner said. As the outsourcers continue to grow their own businesses, they will need to hire more and more people.

Before the fall of the dot-coms, the top IT news stories of the day discussed the IT skills shortage and the migration of skilled professionals to companies south of the border. Woelfle explained the skills shortage is still a reality, but unlike the days of pre-Y2K, technology companies aren’t fighting tooth and nail over every computer science graduate that joins the workforce.

“We’re not hiring at the rate we were a year ago or a year-and-a-half ago, but we certainly continue to have strong hiring requirements. I talk to my clients that I deal with on a regular basis and everybody’s pretty much in the same boat. Even at the entry level, there’s still strong demand,” Woelfle said. The biggest demand right now is for network engineers – people who can design and build networks, he added.

Although it is an oversimplification, one of the main reasons that companies have for outsourcing is to avoid the cost of maintaining the staff necessary to manage a simple network. In many cases, managing a network for a small company is only a part-time job. So instead of hiring a full-time employee, companies might outsource their network management. In some cases, the company has already been maintaining a network itself and wants to transition its management from in-house to a service provider.

According to Bob Hafner, vice-president of Gartner Group Canada, such a transition can easily take two or three years in total. Often with an outsourcing contract, there is a clause that says the service provider has to guarantee the company’s soon-to-be-ex-employees’ jobs for at least two years. After that, though, those professionals will have had to prove to the service provider that they can earn their keep, so to speak.

Compaq Canada Inc.’s managing practice principal, David Pearce, agreed. He added that in some cases, instead of being transitioned to the provider, some individuals stay on with their current employer in another role.

“The individual may stay with the organization and may seek to enhance or change their job career in terms of their speciality,” Pearce said. Professionals choosing to stay with their employer usually have two choices – stay in IT and switch their speciality from networking to something like applications or stay with the company and move over to the business side of things. If the individual moves over to the outsourcer, they will have the opportunity to work with many clients simultaneously and will be with a firm that specializes in IT. Also, there may be other opportunities within the provider’s organization the individual can pursue.

Perhaps network professionals should be more concerned about losing their jobs because of automation than because of outsourcing. According to Pearce, automation is happening in all industries, and IT is no different.

“I can’t unequivocally say that the number of individuals that today manage networks will not detriment over time. I mean, technology itself and everything used in automation, I think the individual’s job will change over time and will be enhanced and more robust,” Pearce said. “The responsibilities they take on will be bigger and better, but that’s true of any [industry].”

Hafner explained there is going to be more automation in the industry, “but what happens is the people who have left are much more qualified people, much more highly paid people, so you’re going to see a lot of automation occurring to help the network run more smoothly.”

Even in the most automated of environments, however, things still fail once in a while and skilled professionals are needed who understand the technology and know how to fix it.

“As for the actual quantity of people, I could imagine that over time there would be less people per network node, but the number of network nodes and the bandwidth is growing, and it’s growing dramatically,” Hafner said. “I’m not sure I could say that they wouldn’t trade each other off.”

In the present, according to Hafner, the fact is the skills shortage still exists. He estimated there are only seven or eight people for every 10 jobs in IT. And while the skills shortage isn’t as big as it used to be, there are still jobs for network professionals.