Quarter of a million jobs to move offshore, says report

Jeff G’s IT support job with a major public sector organisation is entering its final stages. In recent weeks, the 30-year-old systems specialist has had the unhappy task of training his replacement: an Indian IT graduate who will do the same job, at a fraction of his salary, somewhere on the sub-continent.

Such a chastening real-life experience is increasingly common for IT workers. New research has found that about 270,000 jobs in the UK will move offshore by 2010. This figure, based on independent forecasts and government statistics, includes around 80,000 IT services jobs and about 130,000 business process outsourcing jobs.

The survey was commissioned by Nasscom, an Indian IT industry association, presumably to balance the increasingly hostile anti-offshoring campaign in the US and Western Europe. Still, its headline findings have been seized upon by union leaders as fresh evidence of the damaging employment implications of businesses that outsource IT and other functions to low-cost centres in Asia and Eastern Europe.

Nasscom says its critics are missing the point of the report. Offshoring certain business functions will help the UK economy stay competitive, it says, by establishing new export markets and offsetting shortfalls in the domestic job market that would have happened anyway. Expected economic growth in the UK will lead to a shortage of more than 700,000 jobs by 2010, according to some estimates. The expected influx of greater numbers of immigrants will help to reduce much of that shortfall, but the rest, says Nasscom, will have to be offset by UK businesses sending more tasks overseas.

Nasscom’s arguments may be persuasive. And many IT directors are finding significant benefits from sending various non-core processes offshore. But the idea that the UK economy will benefit from globalisation in the long run will be scant consolation to people like Jeff, lower down the IT pecking order, who face redundancy today.

  • A training company has hit upon an unusual solution to the offshoring versus in-sourcing debate. Perry Johnson Inc, based in Michigan, was thinking about moving its telemarketing call centre offshore when it heard about a campaign by the US prisons service to provide low-cost workers to US businesses. Rather than move the function to Bangalore, say, the company instead chose the Snake River Correctional Institution in Oregon. Prisoners work 40-hour weeks cold-selling Perry Johnson’s services to US businesses, for which they earn about $30 – making them competitive with their Indian counter-parts. “I’ve been here three months,” convicted robber Chris Harry told the Associated Press, “and nobody’s ever suspected they are talking to a convict.”

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    Ben Rossi

    Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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