Onshore coders' salaries rise along with Offshore fears

More pay for better work

By Gavin Clarke in San Francisco, 20th July 2005

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So much for US legislators' concerns about the damaging impact of outsourcing on domestic tech-workers' employment and pay prospects.

IT workers are experiencing a minor uptick in their salaries as employers slowly realize that sending jobs to low-wage economies creates more difficulties than it solves. That's according to two separate surveys, which appear to back the thinking among certain analysts that companies should adopt a "selective" approach to outsourcing.

That approach means retaining onshore those positions that require specialized knowledge of new technologies or processes that are unique to your company and sending overseas less specialized skills, like code crunching.

A new Foote Partners survey has found that, overall, salaries grew between 3.8 percent and 1.3 per cent respectively for certified and non-certified individuals in the fields of application development, databases, enterprise software, networking and systems administration during the first six months of 2005.

Salaries increased 4.9 per cent and 3 per cent, respectively, for the 12 months to July 1.

For non-certified staff, operating systems led the field, growing 8.2 per cent during the first six months, while knowledge of web technologies was top in the certified staff category, with salaries growing 3.8 per cent.

The increases follow a decline in pay of between 7 and 10 per cent 18 months ago, in networking, databases and application development, according to Foote.

"The pendulum has swung to the other side as companies have become more aware of the difficulties in doing off-shoring successfully and achieving anticipated cost savings," Foote co-founder David Foote said in a statement. Foote surveyed 50,000 IT professionals.

The Foote survey follows the US Bureau of Labor Statistics report last week of a 7.5 per cent year-on-year increase in "computer and mathematical" occupations - a category that includes programmers - to 3.2m. The Bureau pointed to increased demand for high-end programmers in new technology areas like web services and wireless.

Foote continued that, after an initial rush to send work overseas, employers have become more selective and risk averse when deciding which work they can afford to offshore and which must remain under their control.

"[Employers] are demanding more industry-specific experience to go with tech skills mastery. They're also searching for workers with... specific experience within a particular industry now that money is once again flowing to innovation and new products and services that will ensure their competitiveness," according to Foote.

Shame the phenomenon isn’t being experienced in telephone support.®