IT Outsourcing

Don't Bring Me Down: How Worried Are You?
At first glance, the majority of you aren't particularly worried about the safety of your job or the jobs of others at your company, at least not because of outsourcing. Nearly 75 percent of respondents told us that they either aren't very concerned or aren't at all concerned about losing their jobs to outsourcing; nearly 69 percent don't think it likely that anyone at their company will lose a job for that reason. Not surprisingly, these numbers are lower for those of you whose companies are actually planning to outsource (only 56.8 percent aren't concerned for their own jobs) or already outsourcing (66 percent aren't concerned for their positions, presumably because any cuts have already occurred). In general, you feel your best approach for dealing with the outsourcing trend is to keep your skills strong and your nose to the grindstone. As one systems/network admin noted, "Obviously it stinks for those workers who lose their jobs to it. But overall, it may be a good thing because it may be pushing IT workers to grow in their skills and develop new skills to survive."

Still, we'd be lying if we didn't point out that outsourcing does have a measurable effect on your morale. Although most of you seem fairly pragmatic—several respondents mentioned that outsourcing these days is simply "a fact of life;" others see it as an economic trend that's bound to run its course—respondents whose companies outsource positions worry more about dealing with staff reductions, job security, and (of course) outsourcing issues. These folks also display more concerns with a lack of IT management direction and are more likely to believe that management is taking the company in the wrong direction. (See the graph "What, Me Worry?" for specific comparisons.) And perhaps most telling, more of them are actively seeking a new job (21 percent compared with 18.2 percent of respondents at non-outsourcing companies) or open to new opportunities (39.6 percent compared with 37.1 percent). Management, take note: If you're worried about losing your top IT people, it's safe to say that although outsourcing might not destroy morale, there will be a cost, measured in employee satisfaction, stress, and loyalty.

The amount of nail biting you've been doing also varies widely depending on your job. Only 18.4 percent of executive and IT management (i.e., president/owner/CEO/CFO/CIO/CTO or IT director/IT manager/purchasing manager) told us that they were worried about losing their jobs to outsourcing. (This isn't surprising, considering that at least half of you reported that these are the folks who make the decisions when it comes to whether to outsource.) Systems and network administrators are slightly more nervous, with nearly 27 percent reporting that they are somewhat or very concerned. Thirty-eight percent of application developers and 39 percent of Help desk personnel reported being concerned, and nearly 54 percent of Web administrators are losing sleep over outsourcing. In nearly every case, stress levels go up if the company is already outsourcing or planning to outsource.

So how on-the-mark are these concerns? Which jobs are being outsourced, and where is the work going?

Take This Job: Which Jobs Are Being Outsourced?
Over the past decade, programming jobs have been by far the most popular type of outsourced work. However, our study indicates that outsourcing now affects a broader range of industry segments. Programming is still the leader, with 59.8 percent of respondents reporting that their companies outsource programming jobs. Most people have noticed a rise in outsourced Help desk and customer service positions as well, and sure enough, 37.2 percent of you reported that your companies send these jobs to outside workers. Surprisingly, though, 40.9 percent of respondents outsource their IT infrastructure planning and design. In general, it appears that most companies that outsource don't just outsource one type of job. For example, of US companies that outsource IT infrastructure jobs, fully half of them also outsource programming work.

Where are these jobs going? From your comments, many of you have dealt with or heard horror stories about customer-service support that's been transferred outside your home country, but in reality the majority of outsourced jobs are staying close to home. This is especially true for our Canadian respondents, all of whom reported that at least some of their outsourced IT infrastructure and Help desk jobs are going to other Canadian workers; 87.1 percent of outsourced Canadian programming jobs are staying within that country.

European IT pros came in second as far as using local outsourcing. According to our survey, nearly 79 percent of European IT infrastructure jobs, 68 percent of outsourced programming jobs, and 76 percent of Help desk jobs are being outsourced within Europe. (Our figures only specify that the work remains within Europe, not necessarily within the respondent's home country.)

Though they came in third, the majority of US workers (who also expressed the most concern with the practice of offshoring) nevertheless reported that their companies' outsourced jobs are remaining within the United States. US survey participants reported that 76.6 percent of outsourced infrastructure jobs, 64 percent of programming jobs, and 62.5 percent of Help desk jobs are going to other US workers.

India, which is becoming well known as a source of offshore IT labor for many North American and European companies, seems to deserve that reputation. Canadian IT pros told us that 8.5 percent of their outsourced programming jobs are going to India; European respondents reported that 13.5 percent of infrastructure jobs, 30 percent of programming jobs, and 23.9 percent of Help desk jobs were being transferred there; for US respondents, the numbers are 22.9 percent of infrastructure jobs, 43.2 percent of programming jobs, and 53.6 percent of Help desk jobs. (Note that the percentages of US Help desk jobs that are remaining within the United States and that are going to India add up to more that 100 percent because of an overlap in the types of jobs being outsourced.) Survey participants from North America and Europe all reported Canada, Europe, and the United States as other popular offshoring locales.

What Lies Ahead: Looking Forward
Stability. It's something the IT industry hasn't seen much of in a long time. The "outsourcing issue" sometimes seems to be just another notch in a long trend of belt tightening. A practice that can be traced to the Industrial Revolution will probably never go away, but will outsourcing continue its steep ascent to the top of the budget-cutting food chain? Perhaps. But many companies have ended up bringing outsourced services back in house after outsourcing failed to produce the expected results. (See the sidebar "But Does It Work?" for more discussion about the sometimes-unexpected costs of outsourcing.)

Regardless of whether outsourcing continues to gain popularity or finally falls by the wayside, the majority of our respondents seem ready to make the best of the present—more than 73 percent of IT pros whose companies outsource or plan to outsource would still recommend IT as a career. Most of you agree that as with any other professional challenge, flexibility, determination, and skill-building are the keys to handling outsourcing—whichever part of the world you work in.

See associated figure — Does Size Matter?

See associated figure — What, Me Worry?

See associated figure — Say It Isn't So