Offshoringis eating away at the
demand for mid-value IT skills in the UK, a report by IT staffing
company ReThink Recruitment has revealed.
The survey showed the proportion of IT jobs created in software
development has shrunk 6% over the past year, from 34.3% to
28.5%.
It reflects a growing polarisation of skills, with the UK
increasingly specialising in higher paid management and consultancy
positions, while countries such as India see the number of
technical jobs grow.
The proportion of support roles created - the area generally
seen as the most at risk from offshoring - fell from 24% to 21.9%
over the same period. But small UK suppliers or teams make software
jobs more resilient to offshoring than support roles, because these
small companies are less able to benefit from economies of scale by
sending work abroad, ensuring there is still some domestic demand
for software development skills.
The survey backs up the theory that a global division of labour
is emerging in IT.
Demand for consultants in the UK is being partly fuelled by the
high level of post-merger and acquisition work, and growing public
sector outsourcing requirements. Jon Butterfield, managing director
at ReThink Recruitment, said, "Offshoring raises quality control
issues, which strengthens demand for project managers in the UK to
manage processes."
Butterfield added, "The fear that IT helpdesk jobs simply
represented the thin end of the wedge, and that higher value
technical roles would be sent offshore next, is not new. But it is
now having an impact on the IT jobs market."
But high wage inflation of 15% in India means the business case
for offshoring may not be viable for much longer, said
Butterfield.
Indian software engineers earn £6,500 a year, compared with
£32,000 in the UK, a gap that is likely to close, said
Butterfield.
"When wages for software specialists in India reach around 40%
of the UK rate and you factor in the cost of maintaining two
offices, travel expenses, time differences and so on, the financial
case for offshoring begins to unravel. We are not there yet, but in
five years we could be," he said.