Outsourcing hits entry level wages

Indian wages could start ctahcing up with the UK

Entry level IT workers have left out of pocket by offshore outsourcing, according to the Association of Technology Staffing Companies (ATSCo).

Wages for first-line support staff has remained stuck at £18,000 over the past five years and second line support staff have seen their pay increase by just 0.8% year, constituting pay cuts when inflation is considered.

But the research by careers services group iProfile on behalf of ATSCo revealed that pay rises for managers have exceeded inflation, rising an average 20.5%. Salaries for project managers have jumped from £37,500 to £45,000 since 2003.

“While entry-level IT positions may be moving offshore, sophisticated project management jobs remain firmly rooted on UK soil. Senior level IT professionals need to remain in the UK so that they are close to their clients,” said iProfile CEO, Rick Bacon.

“These managerial positions are as much business focused as they are focused on technology. We’re seeing increasing competition for these positions, and it’s crucial that people looking to secure or switch jobs in this area are recording and communicating their full range of skills to potential employers.”

This is bad news for in industry already struggling with skill shortages, said ATSCo chief executive Ann Swain.

“The outsourcing of entry-level IT jobs has meant fewer graduate-level jobs are available in the UK. It’s like removing the bottom rung from the career ladder,” she said.

“The shortage now is of candidates with a few years experience looking for second and third jobs. But how do you get that experience if entry level jobs are being sent offshore?”

“Concerns over quality of service and data security in outsourced operations are constantly being voiced. However, these concerns haven’t yet prompted organisations to bring their IT support roles back onshore en masse.”

But the economic sense in outsourcing support functions to India is set to decline as a rise in Indian salaries approaches, according to ATSCo. Indian salaries are forecast to increase 14.4% in 2008, closing in onto those of UK professionals.