Offshoring IT will double in five years but what about IT graduate unemployment?

I wrote a blog post last week about the fact that Computer Science graduates are the largest group of unemployed graduates in the UK with 17% of recent graduates unemployed.


There was a great debate about whether offshoring was the main cause of this. Not everyone thought so. One thought 17% might not be very good.


Well, if offshoring is the main cause of Computer Science graduate unemployment, there could be trouble ahead. I have spoken to Gartner’s Ian Marriot today about the likely growth of the use of offshoring by UK businesses and he says it will probably double in the next five years. He says this is due to factors such as confidence in offshore services meaning businesses offshore a broader range of services. He also said the small, medium business sectors as well as the public sector are expected to offshore more work.


Also, according to Gartner, the recession has caused 38% of CIOs to offshore more work, 44% offshore the same amount and only 18% offshore less in 2009.


The figures from the Higher Education Statistics Agency (HESA) show that 17% of 2009 computer science graduates were unemployed. This is the highest and the average graduate unemployment is 10%.

As this blog post got so much reaction I though I would give the figures for the previous three years, back to when the study began, so we can monitor how the number of Computer Science graduates are unemployed has changed.  

Recent graduate unemployment rates


Computer science 17%
Communications 14%
Architecture 13%
Engineering 13%
Creative arts 13%
Business studies 11%
Maths 10%
Languages 9%
Biological science 9%
Law 6%
Education 5%
Medicine 0%


Recent computer science graduate unemployment rate 2005 to 2008.

2007/2008 – 14%

2006/2007 – 10%

2005/2006  – 11%


Computer Science was the largest unemployed group out of all subject categories in each year of the report.

Obviously the recession has had a major impact on recruitment opportunities for computer science graduates.


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Probably the proportion of unemployed graduates with degrees in IT/CS will drop in future, as surely no smart kid with any sense would embark on 3 years of study and build up tens of thousands of pounds in debt, just to find themselves on the scrapheap together with the rest of the UK IT workforce.

I was trying to find out the newly graduated unemployment figures for other countries. Like the UK, the US figure is about 10% for new graduates.

I am not sure if these figures are accurate, but India appears to have 20% new graduate unemployment and China has almost 30% new graduate unemployment. Both countries have concentrated on producung science, technology and engineering graduates.

The growing crisis of graduate unemployment in India and China seems to have predated the financial crisis.

From the responses and back pedaling we have seen in recent weeks on the ICT immigration cap I have come to the conclusion that it's all over for UK IT staff, unless maybe you desire a career in management.

My advice is to retrain to another type of work, preferably one which is not susceptible to outsourcing or on-shoring, or failing that emigrate.

When I think of the IT industry we had in the 80's, and what we could have become I feel deep sadness.

Like so many other Industries and developments within the UK, an opportunity wasted in the name of short term profit.

"My advice is to retrain to another type of work, preferably one which is not susceptible to outsourcing or on-shoring, or failing that emigrate."

This raises the question whether globalisation has rewritten the economics rulebook.

The old rulebook - certainly in use from the 1960s until 2000ish - stated that low skilled jobs were in decline and highly skilled jobs were only at risk of disappearing if the technology they were centred around became obsolete - such as the Linotype machines used for printing newspapers. Therefore, education and the development of knowledge based industries were the pathway to prosperity. During that time the UK witnessed a steep decline in heavy industrial jobs followed by menial office jobs in parallel with an uprising of skilled and knowledge based jobs such as software development.

The new rulebook seems to say that the deciding factor whether jobs remain or disappear is whether they can be offshored to low wage countries or not. This means that many skill and knowledge based jobs such as software development or video production are at risk whilst low skilled jobs that cannot be offshored like Transit van drivers or cleaners remain safe. Education no longer provides the advantage it used to provide because brains are now a cheap global commodity. Even law, medicine, and financial services are not immune to offshoring. It's just taken more time to offshore them because of peculiarities in UK legislation compared with, say, software development. A law student in India or Africa is just as capable of studying and understanding British law as a British law student is.

What are your thoughts on this?

I agree. There appears to be a world glut of graduates and a degree is no longer a guarantee of a good job (unless it is in medicine). A-level students have higher employment rates than graduates.

There will inevitably be a crash in the 'education' market.