Outsourcing dims job prospects for many tech grads

Found this on www.cnn.com

http://www.cnn.com/2004/EDUCATION/01/27/college.seniors.jobs.ap/index.html

NEW BRUNSWICK, New Jersey (AP) -- Eager to ride the high-tech tide, Andrew Zhou double-majored in computer science and finance when he arrived at Rutgers University in 2000.

 

You know, there appears to be considerable confusion re: Computer Science vs. Information Technology. The IT jobs are NOT moving offshore - the programming jobs are.

NETWORKING SALARIES RISE, RESIST INDUSTRY TREND |

According to new research, the average pay for certified networking professionals increased slightly last year, while pay for certified IT workers declined overall. Workers with CCIE, VoIP and security certs fared especially well.

http://www.searchNetworking.com/originalContent/0,289142,sid7_gci946094,00.html?track=NL-79&offer=j.27

 

Re: Re: Outsourcing dims job prospects for many tech grads

I know several people who used to work for a large local company and are no longer working there. Some are developers, some are infrastruture specialists, and many are DBAs. All the work sent off shore. To say that only programmers are at risk at losing there jobs is not an accurate statement. I no longer work there either....guess who was the first IT pro at that company to lose his job to off shore developers?

IT and CompSci are not the same thing, but they are definitely related. What else is some one with a BS in CompSci going to do besides program? He'd be too low level to teach or research....

Daniel

 

I believe that somewhere in the future these jobs will come back but will not warrant the high salaries of the recent past. This off-shoring move may be one method used by management to roll back wages in this country and will always be there as a threat to any uncontrolled wage increases as those of the 1990's. Employers would much rather have their own people on site, speaking the same language handling all of their computer needs. Its much easier for a user to explain face-to-face to an IT person what they need in a application not via e-mail with a person half way around the world. Time will tell.

 

Re: Re: Re: Outsourcing dims job prospects for many tech grads

My point exactly. IT - systems administration, NOT development - isn't going anywhere. Code and designs do not care where they are compiled - but you can't maintain a network or analyis and replace faulty components from accross an ocean.

 

Re: Re: Re: Re: Outsourcing dims job prospects for many tech grads

No you can't - but some Indian can.

 

Re: Re: Re: Re: Re: Outsourcing dims job prospects for many tech grads

I know some of the large networks are remotely managed by some indian companies. For example..

www.microland.net

http://www.microland.net/newsroom/mediacenter_newsdetails.asp?newsid=41


Microland NOC manages data centers (with hundreds of servers and network devices)—two in the US, one in Japan, two in the Asia Pacific region, and many in-house data centers located within a customer's premises across the world.

It manages enterprise networks and its client sites are located in the US, UK, Belgium, France, Germany, Hong Kong, Taiwan, Singapore, Japan, Australia, Hungary, India, Korea, Malaysia, Thailand and China.

The NOC manages enterprise security for its customers. This includes managing firewalls, VPNs, IDSs, content filtering software, encryption technology, and anti-virus. Enterprise storage architectures like NAS and SAN are managed at the NOC.

 

Re: Re: Re: Re: Re: Re: Outsourcing dims job prospects for many tech grads

Exactly. It doesn't matter where the hardware resides. As long as there a good,stable communication lines. Welcome to globalization. Our standard of living drops precipitously while developing nations see a sharp upswing in theirs. Multi-national corporatons benefit by chasing and exploiting cheap labor and are putting smaller companies out of business because they cannot compete. This helps the larger companies grab more market share where thay can control the price of their goods.

 

Re: Re: Re: Re: Re: Re: Re: Outsourcing dims job prospects for many tech grads

Most companies are not comfortable with that or they would have done it already. There are things that have to be done locally.
Even employees from companies that have their own local staff that normally try to remotely control servers from distant parts of a campus or even over VPN from their homes somtimes end up having to physically go to and touch the equipment in person.

 

One minor flaw

The minor flaw in your plan regarding a dropping standard of living here is your assuming their is one 'pile of goods' that the world can produce and that is what we are producing now. The fact of the matter is some jobs are going over seas (and yes the VAST majority is 'only' programming jobs), but who really cares. Yes, the programmer cares and the city they are currently employed in care when large number of people lose their jobs, but the important thing is to look at the big picture and the long term economic vitality of the U.S. (and the world for that matter). Pointing out individual cases were people are worse off is pointless except if you want to point out that individuals do get hurt by becoming unemployed.

Here's the situation. Lets draw the picture in the meanest terms possible. Picture 'Mr. Evil' running his large programming shop at a profit and who moves his programming positions overseas. Do you believe Mr. Evil was purposefully over paying individuals before he moved the jobs over seas? If you don't then you are saying that Mr. Evil is paying as little as possible for his labor 'input' (yeah, yeah, MA in Econ) AND (this is the important part) the reason why he has to pay that amount for his labor input is THAT SOMEONE ELSE WAS WILLING TO PAY JUST AS MUCH (OR in theory just less i.e. 1 cent). When we make the realization then the theory holds that their are other employeers that are willing to hire those individuals for a salary similar to what they were making before. Why do we as a nation see a problem with jobs going overseas then? Then problem is two fold. The labor market does not correct itself instantenously AND individuals choose to not move to where the jobs are. Although their is some problems with using unemployment statistics they are generally considered minor problems and therefore the fact that we have an unemployment rate of approximately 6% in the U.S. speaks volumes for the fact that people are indeed becoming unemployed. Additionally, one of the areas where the unemployment rate is especially weak is the failure to count those who are self employeed which just happens to be a very common thing in the field we are speaking about.

Additionally, the main concern is U.S. firms moving jobs over seas. Here is a shocker for you. How would a U.S. firm pay for employees overseas? Short answer is U.S. dollars (long answer: yes, India or wherever doesn't opperate on U.S. dollars, but the corporation will purchase foreign currency using U.S. dollars). The next question is this...what is the individuals who purchase U.S. dollars going to do with U.S. dollars? They are going to buy U.S. goods.

In the end we have the whole Regan theory of the growing pie...Yes, the rest of the world will have raising standards of living, BUT we can continue to experience a growing standard of living ourselves. Honestly, the main concern over the status of the U.S. economy shouldn't be regarding moving some jobs overseas (until we see a rise in unemployment beyond historical norms that can be contributed to the move), but instead worry about when the U.S. is going to become the #3 economy of the world when China and India claims #1 and #2. Our standard of living will still be higher (both countries have over a billion people), but by losing our seat as the largest consumers of the world other countries will develop more powerful barganing positions then ours.

Just as the plight of the farmers (or wagon wheel shops) hasn't lead to a falling standard of living neither will the loss of any particular job field to the rest of the world (although short term is may be painful).

John

p.s. sorry for the babble, but 2am is just a little to early for me

 

Don't worry fellas . . . one day we'll
have the last laugh:


http://www.ebaumsworld.com/fartingcat.html

 

Thought I'd post this blog of some hooror stories of people affected by H1-B.. http://www.zazona.com/ShameH1B/Horror2-17-01_8-9-01.htm


John

 

Pardon the typo -- horror not hoorer. Didn't get back to the edit button in time.

John

 

Re: Re: Re: Re: Re: Re: Re: Outsourcing dims job prospects for many tech grads

I disagree. The economic "pie" grows. Your arguements are similar to the arguements of the Lubbites.

 

Re: Re: Re: Re: Re: Re: Re: Re: Outsourcing dims job prospects for many tech grads

I don't know what you are disagreeing with. And its LUDDITES not LUBBITES.

 

Re: Re: Re: Re: Re: Re: Re: Outsourcing dims job prospects for many tech grads

I know this thread is long dead... but I thought I'd add this.

Although remote systems administration(from overseas) may not be too common yet, it will probably be happening a lot more as bandwith and network stability improves.

Right now my old department at AT&T are administering unix servers all over the country from their NJ offices. They are responsible for machines as far as 2000 miles away. True, sometimes a local body is needed to press a button or to insert a cd, but they use local computer technicians for this. The NJ systems admin will work a problem via remote tools(compulert) and if they need actual physical interaction with the hardware, they call in to the same computer hardware dispatch line they'd call if a hard drive crashed and the tech will go out to the building(local to him/her) and sit on the phone with the admin (in NJ) and be that admins hands so to speak. Sounds stupid, but apparently it's saving lots of money because the technicians are already on payroll, so aside from any overtime they get for when they have to go out to the building to act as the admins hands, there's no extra money being used for this.

If it can be done from 2000 miles away, it can certainly be done from 10,000 miles away...

 

I was just reading a newspaper in the airport (USA Today) yesterday and an article was run where Colin Powell addresses the outsourcing issue while he is in India. He states that this has affected only 200,000 jobs and the Indian response is that for every $1 spent on outsurcing Indians return $1.40 to the American economy through their purchase of US goods.

Here is the link: http://www.usatoday.com/news/world/2004-03-16-powell-india_x.htm

John

 

There's two points I want to add to this discussion -

1. We're victims of our own success.

2. We're victims of our own greed.

When I started in the CS/IT world back in the 70's, computers were mostly large cabinets in environmentally controlled secured rooms where the only interface from the business world perspective was a deck of cards for input and a continuous fan-folded bundle of paper for output. We were able to command a premium salary, because we were the keepers of the arcane magic that made the machinery and programs work.

Over time, the engineers made the hardware smaller and cheaper. The developers created languages that were easier to use. Networking became easy and efficient. Al Gore invented the internet . We still commanded the better than average salaries because the hardware and programming languages were still arcane enough to be mysterious and barely understood by the general business client.

Then along came the Dot-Com boom. Money was being thrown in all directions and we in the CS/IT industry commanded even larger salaries because we were in short supply. Business reacted with the request for cheaper labor under the guise of unfilled vacancies via the H1-B visa. Tech schools opened overnight with a mass-media message of "be an CS/IT worker in 10 weeks and make BIG BUCKS". These corportate training companies instilled the expectation that IT/CS was a lucrative career that anyone and everyone could be in. Software companies kept churning out solutions that were easier to work with from a non-IT perspective. Web pages connected to databases were easy to make by a non-IT person simply by drag-n-drop technology. Look at Access 2000's ability to generate ASP pages using nothing more than a save-as command.

Then the Dot-Com bust occured. The jobs dried up and many new IT/CS professionals found themselves with no work and little or no experience. The problem then and now is that we in the IT/CS industry still expect and demand huge salaries, even in the midst of limited or no employment opportunities. And the software and hardware maturity process still continued that required less and less IT/CS experience to do more.

Software companies created tools that easily enable development by plug-in modules. Hardware has been reduced to plug-in modules that report when they break and fail over to another module until the broken one is replaced. Workers are now becoming plug-in modules that serve only to respond like Pavlov's dog to alarm bells from the hardware & software events. And yet, we in IT/CS still demand high salaries.

Businesses, feeling the impact of an economy in recession and balking at the continued high compensation expectations of IT/CS workers, found that the internet allows cheap labor in countries where the cost of living is significantly less than in the US. The maturity of the software tools, hardware and development methodolgies also contributed majorly to the ability to outsource.

So what is this post/rant leading up to?

The internet has turned IT/CS from the local perspective of the '70's to a global issue 30+ years later. Hardware support is as simple as plug & chug and can easily be remotely managed. Software is so advanced and simple, my 11 year old is writing useful programs. We are victims of our own success.

Just as manufacturing jobs disappeared from the US in favor of foreign markets decades ago, IT/CS outputs and jobs are following now. You can't stop it and you can't legislate it from happening. All conspiracy theories aside, the corporations sway the polititians, not the unemployed IT/CS professionals. And all corporations care about is the profit, not the people beneath the executive level.

We are victims of our own greed. If you want to stay in IT/CS, decrease your compensation expectation and go with small and mid-sized companys that serve local or vertical markets. Otherwise, find a new service-oriented career that's not a Walmart greeter. I have dibs on that job myself.

Rick

P.S. If you listen quietly over the next decade, you will hear the Indians and Pakistani repeat the angst we in the US are expressing as they watch their jobs go over to the Indonesians.

 

I just wanted to add something to this conversation. Some have suggested that networking/systems administration jobs aren't being outsourced or aren't in decline whereas programming jobs are.

I happen to work in a company where we do audits of IT infrastructures of companies and we evaluate the effectiveness of the IT staff versus the cost-effectiveness of outsourcing the IT department.

In most cases it is much cheaper to simply outsource the entire IT department without any significant losses of support or anything. This means IT people are losing jobs to some company that provides IT services to a lot of companies.

I can also say that the companies that have gone through this process have reduced IT costs significantly and more importantly they are happy with the service. Just think about the average IT person in a company, is that person utilizing his or her time 100%? I really don't think so, the average IT person could do a lot more than he or she really does.

We aren't losing jobs to overseas countries however because the ASP's here are local. We are however seeing a lot of IT people losing their jobs as a result. I could imagine something like this happening in the U.S. in the near future where the ASP was some overseas company...

I guess the point is that you cannot be to secure even though you are doing an excellent job and managers are happy with you simply because all IT people are expendable.

 

Macroeconomically it (offshoring) certainly should be a good thing. a foreign country can produce a good/service of equal or better quality and for much less $$ than we can, so we import from them which then frees us up to do the things that we have a comparative advantage at doing.

If/when job creation in the USA is strong again, the offshoring of tech jobs won't be as much of a worry as it is now... but right now, there aren't a whole lot of jobs being created, so every little job lost is gonna seem like a huge loss. In 1998 if a programming job was offshored to India or Israel, who cared, there was a thousand other programming jobs available at the various dotcoms opening up everywhere.

One big concern is this... back during the early 1990's recession laid off workers(and non-laid off workers) were advised to get IT training so that they could get jobs... many did, but now IT is a pretty dead job market. What do people study now, and how long until "it" is in danger of being offshored? Anything that can be done well in third or near-third world country is in danger of being outsourced to those countries, and for a very good reason... profit maximization. Why would a company pay $10 for something(labor) that it could get (without any loss of quality) for $2 somewhere else? As employees we hate this, but as stockholders(IRA/401k's anyone) we may not see it, but we feel it when our financial statements come in the mail... and if the companies that we own shares in can cut their costs by outsourcing/offshoring, and those stock prices rise... are we not happy?

Another thing... our own productivity is much more of a cause of the weak domestic job growth than offshoring is. Why would a company hire 5 new people when they can spread the duties of their jobs over 7 existing employees????