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Is outsourcing still a threat to American workers?

Is offshore outsourcing still a trend? How much of a concern should the American IT worker have that his/her job will be outsourced?

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Oh, yes, offshore outsourcing will be around and thriving for the foreseeable future. Contract value grew 68% in the third quarter of '05 compared to the same time a year prior, to nearly $11 billion. The number of contracts signed rose 15%, so it's clear that those doing offshoring are expanding contracts, and that it is the larger companies investing larger sums more so than the small and medium-sized enterprises doing it for the first time (or a second or third time). The fact is that unless companies can reduce costs, it is hard for them to remain competitive, all other things being equal (which, of course, they never are). The fifth entry to my blog listed in-demand jobs for 2006, including jobs that will tend to be safe from offshoring. American IT workers in lower-level applications development jobs, or where technical skills pretty much define the job, are very vulnerable. As a rule, jobs that require industry and especially customer knowledge and experience are tougher to offshore. Jobs that require an understanding of the benefits and limitations of culture and organization of the employer and where they stand in their industry and competitive markets fall in this hard-to-outsource category as well. There is a story behind each job or area on my list that justifies its inclusion, and the relative safety from offshoring that it enjoys.

This was first published in January 2006

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