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US tech industry staff decimated in offshore stampede
10% of jobs moved abroad in 2004
One in ten jobs in US tech vendors and IT service providers will move offshore by the end of 2004. And one in 20 tech jobs in end-user enterprises will be shipped overseas to cheaper countries during that time, Gartner estimates.
The tech analyst firm is a strong advocate of offshore relocation, and it has a heap of advice for CIOs on how to organise the move properly. Companies who get the transition wrong could face organisational paralysis and loss of intellectual talent in critical areas that should have stayed at home. And let's not forget a lot of mightily pissed-off staff, while we're at it.
The accelerating move offshore will surely encourage more US workers in tech industries to seek union representation. Only today, Techweb reports that employees at IBM are starting to organise in response to plans from their employer to move thousands of jobs abroad.
Gartner's concern lies with the tech employers, its clients, rather than the pink slips to be. As such it wants to ensure that firms do nothing to stain their reputation when they ship jobs overseas.
Says the firm: "CIOs need to communicate clearly, honestly and respectfully about the transition plan, and about the options available to affected employees. The way in which enterprises deal with employees during the offshore transition will be lasting testament to the perception of leadership and the reputation of the company as an employer."
Quite. So why do so many firms get it wrong?
Now for some Gartner advice for the CIO
Identify competencies, roles, people and knowledge that will be retained -- To prevent organizational paralysis, CIOs must define the future role and shape of their IS organizations as certain day-to-day activities move overseas. Many enterprises retain critical functions such as application design, application integration, client-facing process management, enterprise architecture, information management and high-investment competency centers. In addition, they develop new competencies in service management, vendor relationship management, process management and business integration.
Create a meaningful transition plan -- Provide clear timelines and milestones to help people prepare for the change that offshore outsourcing brings. At each milestone, certain segments of work or applications will complete their offshore transfer, and the affected people will be terminated or redeployed. Companies that have a lasting commitment to their people will generally spend time arranging redeployment of their affected employees.
Outline employees' options -- Define the options available for affected employees: reskilling, redeployment, termination or outplacement. Executives must hold themselves accountable for communicating clearly, quickly and meaningfully.
Gartner has published a research note U.S. Offshore Outsourcing: Structural Changes, Big Impact, for sale on its Web site. We assume that this will be a big-seller. ®