Pay Pressure Eases as IT Jobs Move Overseas; Some Hot Areas Remain

STAMFORD, Conn. -The job boom in information technology is over, apparently, at least in this country. Two new reports indicate that not only are jobs not as plentiful in the once red-hot IT sector here, but the upward pressure on the salaries commanded by the specialists within that sector also has reversed course. The first report is the well-publicized study by Stamford-based Gartner Inc. that says one out of every 10 jobs within the U.S.-based IT vending and service sectors will have moved overseas by the end of 2004. And one out of every 20 IT jobs, or 5%, of IT jobs within user enterprises themselves will join them, the report said. Meanwhile, bonus premium pay tied specifically to IT certifications and pay for standalone skills themselves have declined, and in some cases plummeted, according to the latest Quarterly Hot Technical Skills and Certifications Pay Index from Foote Partners LLC in New Canaan. “It’s been a disappointing couple of years for IT workers accustomed to being rewarded for their tech skills,” says David Foote, president of Foote Partners, which bases its quarterly report on surveys of 36,000 IT professionals employed by 1,820 organizations in the United States and Europe. “The average value of standalone skills plummeted 25% in 2001 and 2002, while premium pay actually increased slightly during that period. But so far this year, with a few notable exceptions, this has all changed,” Foote says. Those exceptions include workers who have earned certifications in Linux, security management, security auditing and Unix and Windows administration. Project management also continues to be strongly in demand. However, Webmaster/Internet certifications and beginner certifications such as MCP, CCP and A+ have dropped sharply in terms of premium pay. So have database certifications, although they still remain the highest-paying certifications group, Foote says. The reason for softening demand for these high-tech skills, and the premium pay needed to keep them around? Increased outsourcing, especially offshore. “These are monies that have traditionally been used to retain and motivate workers,” Foote says. “As more work is transferred offshore or at least directed away from IT full-timers, premium pay becomes unnecessary. “This is a major shift for skills and certifications pay, and is undoubtedly one of the reasons why certification is just now beginning to collapse after a pretty healthy run during this latest recession.” The reasons for the exporting of American jobs overseas involve more than simply cheap labor, according to the experts at Gartner. “To many CIOs and business executives, the decision to outsource activities offshore is fiscally sound: the cost, quality, value and process advantages are well-proven,” says Diane Morello, a vice president and research director there. “At a time when IS organizations are struggling with poor credibility and IT is being scrutinized, offshore outsourcing is becoming a tool for improving service delivery and a source of highly qualified talent in greater numbers,” she says. However, Morello warns that organizations who either are involved in this outsourcing, or who use their services – and that includes many credit unions – “must not trivialize the impact of offshore outsourcing on their business strategies, their organization or their employees. “Three areas of concern are loss of future talent, loss of intellectual assets and loss of organizational performance.” On a more positive note, Foote notes that there still is a place for advanced training and certifications in the American and European organizations his firm surveyed, and credit union IT execs might want to note his observations on why, especially when budget times roll around and expenditures get examined line by line. “Many IT and business-line managers . support the notion that certification is a more meaningful measure for comparing IT workers than untested or self-reported skills competency,” he says. “They report higher comfort levels – and success – in arguing for training expenditures when they can guarantee certifications in return.” -