Good News, Bad News for Salaries, Outsourcing, and Home Businesses

Monday, October 18th 2004

Read More About: gis jobs career

Classified Ads:

On October 12^th, TechWeb News reported that, "Offshore outsourcing is expected to grow nearly 20 percent annually through 2008, with the average enterprise sending 60 percent of its application work to low-wage countries by 2009, a market research firm said Tuesday. The offshore-outsourcing market currently exceeds $10 billion, and is expected to continue to grow steadily, despite any political backlash in the United States, the Meta Group said in a report. By next year or 2006, most information technology companies will have an offshore strategy. 'Offshore labor is proving to be a disruptive alternative in the outsourcing industry," Meta analyst Dean Davison said in a statement. "With global resources costing one-third to one-fifth that of American employees, without accounting for hidden costs, and having higher process discipline, offshore strategies now pervade North American IT organizations."

On October 15^th, InformationWeek reported that, "The lid on IT salaries is beginning to lift, and IT specialists should see gains of as much as 10 to 15 percent over the next three years, according to a new IT staff salaries study by the META Group. While that's the good news for IT personnel, the bad news is that the salary inflation will push labor costs upwards of 55 percent of IT enterprise budgets through 2007, the research firm stated in its annual Staffing and Compensation Guide. 'Some turnover is starting,' said Maria Schafer, senior program director with the META Group's Executive Directions unit, in an interview Thursday. 'Companies need to recognize that their employees don't have strong loyalty to the company [any longer].' The report is based on the belief that the U.S. economy is improving and, as it does, IT budgets will increase, causing key IT employees to seek out greener pastures at other organizations. Because of this, Schafer said CIOs must improve a wide range of programs to keep their IT people happy."

On October 20^th, Grant Thornton International, a leading accounting, tax and business advisory organization, stated in a report that, "While there is still general optimism about the U.S. economic environment overall, technology business executives are less confident today than six months ago. According to this national survey, 73 percent of technology respondents expect the U.S. economy to improve in the coming year, a slight decrease from the January 2004 survey which reported that 80 percent felt the economy would improve. Although economic recovery has been slower than expected, technology leaders still remain extremely optimistic about the growth of their own businesses, with 94 percent of respondents attesting they are optimistic – an increase from the January 2004 survey in which 88 percent reported confidence in the growth of their organization."

And also on October 20^th, the U. S. Census Bureau reported that "Nearly 4.2 million people worked at home in 2000, according to Census 2000 tabulations, up from 3.4 million in 1990, the Census Bureau reported today. This 23 percent increase in home-based workers age 16 and older was double the growth in the overall work force during the decade. The data released today include information on home-based workers by age, sex, educational attainment, race and Hispanic origin, industry, occupation, disability status and earnings at the national and state levels. More recent estimates from the American Community Survey (ACS) show 4.5 million people worked at home in 2003.