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Report: Offshoring can be good for local ICT job market

Report: Offshoring can be good for local ICT job market

While the offshore outsourcing model is a threat to some Australian jobs, it also has opportunities, provided the ICT industry positions itself appropriately.

This is one of the key findings from a report released last week by the Australian Information Industry Association (AIIA).

The report canvassed opinions of senior executives, software and application developers and key ICT policy influencers with the aim of producing material that will help local companies and multinationals understand and take advantage of the global sourcing phenomenon.

Executive director of RSP Group, Gary Hinksman, endorses the findings from the report.

"The negative implications of offshore outsourcing are often highly exaggerated," he said.

"I believe unemployment figures remain under five per cent, and prospects remain buoyant for the technology sectors next year. Those working within the technical industry should see a five to 10 percent pay rise next year and contractor rates are set to rise 15 to 20 percent," he said.

Hinksman agrees with the findings of the AIIA report that while some local jobs will be lost to offshoring, others will be created.

The work that is being outsouced is the lower end repetitive and transactional work such as telesales, entry level customer service and help desk roles, according to Hinksman.

RSP CEO Matt Lodge said in a media statement that these types of jobs were vulnerable anyway due to advances in speech recognition and automated hosting services.

Both Lodge and Hinksman are optimistic about Australia's ability to attract jobs through the global market by offering higher value services at a still competitive price.

"With sound infrastructure, a highly educated workforce, and competitive labour costs, Australia will continue to be an attractive place to do business," Lodge said.

The AIIA report found that it is at least 25 percent cheaper to run a commercial undertaking in Australia than in the United States or Western Europe.

Respondents to the report believed the domestic industry boasted world-class skills and experience to be able to provide a higher level of consultancy than the process-oriented programming that has become the specialty of India, Malaysia and a number of other countries in Central and South America, South-East Asia and Eastern Europe.

"The ability of software developers to solve problems, design and implement complex systems should attract business from North America and Western Europe. Vertical industry or domain expertise in areas such as financial services, government and health are strong suits for the local software services industry," stated the report.

Whether or not Australia will be able to respond to the challenge of creating local employment opportunities through offshoring is still a hotly debated topic.

Some respondents felt that the industry lacked sufficient scale and others criticised the government and its policy towards the ICT sector. Many were particularly critical of the public sector's propensity to buy overseas goods and services.

The report makes several recommendations as to how the Australian ICT industry needs to position itself to benefit from offshoring.

These include the need to undertake an effective marketing campaign to promote the strengths and skills of Australia's software development sector and promote Australia as a sophisticated offshore destination for North American and Eastern European organisations.

The report stresses that it is essential for the industry and government to work together on such marketing campaigns and also to assist professionals who have been displaced and wish to re-enter the workplace with updated and relevant technology skills.

The report to the AIIA was conducted by IT Research, an affiliate of IDG, publishers of Computerworld

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