Why IT Jobs Are Never Coming Back
U.S. IT job loss may level off in coming years, but the likelihood that corporate IT will ever contribute to job creation again is minimal, according to a recent study by the Hackett Group. CIO.com talked to Hackett's lead researchers about what's driving IT jobs offshore, what roles will remain stateside, and why some American IT professionals may have to send their resumes to China.
Thu, December 09, 2010
CIO — The combination of more automation, increased offshoring, and better global IT infrastructure has taken its toll on the U.S. IT profession, resulting in a net loss of 1.5 million corporate IT jobs over the last decade, according to recent research from IT consultancy and benchmarking provider The Hackett Group.
The barely bright side for the American IT worker is that the total number of annual job losses will diminish slightly in the coming years, down from a high of 311,000 last year to around 115,000 a year through 2014, according to Hackett which based its research on internal IT benchmarking data and publicly available labor numbers. The really bad news? It's unlikely that IT will contribute to new job creation in the foreseeable future. "To succeed over the next five years, companies need to understand how to reposition existing talent; jettison or rationalize current jobs that have no place in the leveraged organization; and source, develop and retain still others to fill the need for new skills, both offshore and in retained onshore staff," reads the Hackett report, which itself was written in part by offshore researchers according to co-author and Hackett Chief Research Officer Michel Janssen.
CIO.com talked to Janssen and Hackett Global Business Services Practice Leader Honorio Padron about their predictions.
CIO.com: Your study looks at the decline in IT job growth based on private and public data from corporate IT departments at billion-dollar-plus companies, but ignores the jobs eliminated by IT service providers. How much greater would the figures be if the likes of IBM (IBM) or HP were included?
Janssen: It would be huge. If you look at HP or IBM, India is their either second or third largest geography [in terms of hiring]. They have mammoth offshore organizations.
CIO.com: If IT is unlikely to contribute to U.S. job creation in the foreseeable future, what does that mean for America's standing in the IT universe?
Padron: Everyone wants to be like IBM, which started the strategy of having the right resource in the right place at the right time. Companies are becoming truly global. At the same time, IT is becoming more utilitarian and more standardized. And broadband is making all of this easier to do. When you put all of those things together, there's inertia in terms of creating jobs in the U.S. The jobs that you used to think of hiring in large numbers—help desk, network management, data center operations, disaster recover, programming—all of those are going to migrate or have already migrated to places other than the U.S. There's no need to be local today. You can work on anyone's problems from anywhere.
Janssen: The whole bottom layer [of IT] has largely been removed from North America and Europe. A lot of the entry level roles are in India or China.
CIO.com: How will companies fill the mid- and upper-level IT roles at the top of the pyramid if that supporting base of feeder roles is vanishing?
Janssen: Companies are still struggling with that, and it's going to become a bigger and bigger problem. It requires a change in thinking about how they build talent and where they will find the future leaders. Some will develop special training programs for the handful of folks they need. Others will take the easier route and hire ready-made leaders from the big consulting firms.