A roundup of news and notes about outsourcing’s impact on IT jobs.
— If IBM Corp. plans to add 5,000 jobs in the U.S. this year but move 3,000 U.S. jobs offshore, that still means 2,000 new domestic jobs. Right? Not exactly, according to The Wall Street Journal, which points out that IBM’s U.S. outsourcing activities, which typically include hiring computer professionals from client companies such as J.P. Morgan Chase & Co. and Fluor Corp., work to blur the math. “Often, IBM ends up laying off some of the workers it hires from (U.S.-based) outsourcing clients as it makes the acquired operations more efficient,” the Journal notes. Also, the transferred jobs aren’t new IT jobs but instead represent a shift in employers. IBM says domestic outsourcing currently brings in about US$15 billion a year, representing 17 per cent of its revenue and much of its growth prospects.
— Outsourcing may be at an all-time high, but IT professionals working for U.S. outsourcing companies may also be facing a higher-than-average risk of job loss, according to Ravi Kalakota and Marcia Robinson, authors of Offshore Outsourcing: Business Models, ROI and Best Practices (Mivar Press Inc., 2004). The reason: “Outsourcing firms like Accenture, Convergys, IBM and HP are the most aggressive in migrating offshore. Expect to see more outsourcing companies execute offshore outsourcing under the label of global or blended outsourcing. If you work for any of these firms, you need to evaluate your job to see whether it’s a potential candidate for offshore substitution,” the authors say.
CEOs and CIOs are out of sync on the confidence metre.
A February poll of 182 CEOs by Chief Executive magazine shows CEO confidence down by five per cent from January, the steepest decline since early 2003.
CIOs, meanwhile, are more optimistic. Of 112 CIOs polled by Forrester Research Inc. in March, 66 per cent expect their companies and industries to improve in the next three quarters.
But don’t expect an uptick in IT hiring. Despite overall optimism, 56 per cent of CIOs are sticking to their budgets and 19 per cent plan to spend below their annual IT budgets.
Live! From online! IT training!
Barry Kaufman, chief technology officer and founder of Intense School Inc. in Ft. Lauderdale, Fla., says the future of technology training is online because it’s low-cost and “a step above classroom training.” Not surprisingly, then, his company has revamped and renamed its training and certification program to take advantage of online, asynchronous education opportunities.
The school offers training and certification programs for a variety of Microsoft products, Cisco technology, security systems and voice over IP. Classes are broken up into 3.5-hour modules. Kaufman says each class runs at least twice a week because “flexibility is key for training these days. You’ve got to be able to offer courses during the day, at night and on weekends.”
Live, online training makes sense for those on tight budgets, Kaufman says. “You’re not paying United and Marriott out of your training budget,” he says.
The training includes a lab with multiple network segments that simulate various production environments. Students can quickly apply what they learn through online materials to walk through systems operations on live systems.
Training budgets may be crimped, Kaufman says, “but you can’t sustain IT systems over time without training. You always need it.”
— Mark Hall
57 per cent — Percentage of Cisco Certified Internetworking Experts (CCIE) who reported receiving a raise in the past 12 months
US$4,875 — Average raise received by CCIEs reporting a pay increase
16 per cent — Percentage increase in IT postings since Jan. 1 on Internet job board Dice.com
46 per cent — Percentage increase in postings for .Net skills since Jan. 1
Sources: TCPmag.com and The Dice Report, March 2004
Keys to success
What are the most critical factors for success over the next 12 months?
1. Retention of key workers
2. Flexible business strategies
3. Partnering with others
4. Getting more from IT
5. Increased available funding
Base: 387 CEOs of privately held, fast-growth U.S. companies
Source: PricewaterhouseCoopers, New York, March 2004