Having been a technology search professional for more than thirty years, I've been trying to look for signals that the employment recession was beginning to end. For ayear now, the dominant labor market (if you want to call it that) in the New York area has been for fulltime staff level technical professionals. People who do stuff, not people who manage. There were support jobs on Wall Street; there were development jobs in other industries. In general, the market was for staff level professionals. The supply far exceeded demand.This month for the first time since 9/11/02, I'm starting to hear about project management, project office and quality assurance positions.

Why does this mean that we're entering a new phase? Simple. These are roles that organizations staff for why they are starting new projects. You hire for a program or project office if you are trying to manage resources when you take on new projects. You don't need to hire project managers if you're in maintenance mode. You start taking on new ones when you're beginning new efforts. Lastly you only hire quality assurance people when you're testing new work.

On the other hand, if you look at the trend to outsource offshore (the article below sites a study indiating that US financial services companies are planning to shift 500,000 jobs overseas in the next five years) and add that to another 500000 technology jobs lost in the US over the past two years and the US recovery looks like it will be slow and that there will be continued wage deflation.

This is different than complaints about the H1B program and its impact upon US jobs. Frankly, I believe the complaints are misdirected. Information technology jobs are becoming no different than textile jobs in the scheme of the economy. work can be done effectively in India and elsewhere at costs far lower than in the US and given the trends, it is important to do your career planning in light of the global economy and how it will be affected by this shift.

Bank Systems & Technology Magazine

Banks Move More Jobs Overseas, Study Says
Steven Marlin
May 27, 2003

U.S. financial services firms are planning to relocate more than 500,000 jobs overseas-more than 8 percent of their workforce-over the next five years, according to a survey of several hundred executives by A.T. Kearney, a management consulting firm.
Nine out of ten respondents cited cost reduction as a reason for moving jobs overseas. Other reasons cited were improved productivity, enhanced service, increased capacity and expanded skills.

While the trend toward offshore relocation has accelerated in recent years, the effectiveness of these moves is far from certain. Half of the respondents classified the results of their offshore initiatives as either "somewhat effective" or "too early to tell." "It's not a slam dunk. There are a number of obstacles to address," said Andrea Bierce, managing director at A.T. Kearney. In China, for example, concerns exist over the protection of intellectual capital.

Nine out of ten respondents listed India as their country of choice for relocating jobs. Although Canada is viewed as having the better business climate, companies are attracted by India's low wages and well-educated, English-speaking labor force. A call center agent in India earns about $2,700 annually.

LiveBridge, a Portland, Ore.-based call center management company, has opened an 800-seat call center in Delhi, India. The three-story, 75,000-square foot facility is completely integrated into the company's North American operations, including Web-based access to call statistics, skills-based call routing, integrated voice response, instant credit decisions and live operators. Employees undergo a four-week training program that includes English accent enhancement, business language, customer service and telesales.

GE Capital has moved close to 20,000 jobs to India since 1997. Citigroup has relocated 3,000 jobs to India, including back-office processing for banking products such as trade, loans, cards processing, cash management, plus customer-care activities, both inbound and outbound. The activities are managed by e-Serve, a five-year-old company that's half-owned by Citigroup. Although its call center operations have been concentrated on serving the Indian domestic market, e-Serve last year opened an international call center in Mumbai to serve Citigroup operations overseas. The company maintains dedicated leased lines to Citigroup's telecommunications centers in Asia and Europe.

Other banks that have relocated large numbers of jobs overseas include Standard Chartered, HSBC, Deutsche Bank and JP Morgan Chase. "The leaders are the companies that already had a domestic presence," said Stefan Spohr, principal in the financial institutions group at A.T. Kearney. "So it wasn't a huge leap of faith to set up offshore operations."

But the offshore relocation trend isn't limited to global banks. "We're now seeing the next wave that includes organizations like GreenPoint Mortgage," said Spohr.

GreenPoint Mortgage last year tapped Progeon, an India-based business process outsourcing company, to provide back-office mortgage services. As part of the contract, Progeon established an Extended Process Operations Center in Bangalore, India, dedicated to maximizing efficiency for GreenPoint through business redesign and technology.

Although offshore job transfers have traditionally involved back-office functions like data entry, contact centers and transaction processing, there has been a shift toward higher-end functions like financial analysis, research, accounting, HR and publishing. "We're not talking call centers anymore," said Bierce. "We're seeing the switch to more white-collar jobs."

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OFFSHORE BENEFITS
Cost reduction 93%
Productivity 64%
Enhanced service 42%
Increased capacity 39%
Expanded skills 30%


*Percentages of survey respondents

Source: A.T. Kearney

According to the May 1 edition of CIO Magazine

46 percent of IT executives laid off staff in the last half of 2002. New hiring is spotty: 30 percent are looking for workers. Others will wait until later in 2003 (32 percent) or 2004 (another 32 percent).

IT Unemployment On the Rise
By Lisa Vaas

The unemployment rate for electrical engineers shot up to an unprecedented 7 percent in the first quarter of 2003, up from 3.9 in the fourth quarter of 2002, according to the U.S. Department of Labor's Bureau of Labor Statistics. The rate stands a full percentage point over the quarterly figure for all workers.
The BLS report, which was highlighted in a press release issued by the IEEE this week, also showed that the unemployment rate is 7.5 percent for computer software engineers and 6.5 percent for computer hardware engineers. The rate for computer programmers was 6.7 percent.

One bright spot was the employment picture for technology workers was that with the unemployment rate for computer scientists—including systems analysts—dropped from 5.1 percent to 4.9 percent.

The total number of unemployed technology workers in those job categories is now 172,000 individuals, with 62,000 unemployed computer software engineers forming the bulk of that group.


Relating to the grim figures, the professional group IEEE-USA issued a statement calling for a rollback of the H-1B visa quota to its historical level of 65,000, down from its current level of 195,000. The group also voiced concern over potential misuse of the L-1 intra-company visa transfer program, which brought 329,000 workers to the United States in 2001.

Will Ceiling Fall?
By Lisa Vaas

During the year he was out of work due to a dearth of consulting work, Boris Galinsky devoted his time not only to a job search but also to educating and haranguing legislators about the reasons so many tech workers are jobless in the first place.

"I didn't want to take [the job situation] lying down," said Galinsky, in Summit, N.J. "Something has to be done about the practice of giving away our jobs to foreign workers."

Galinsky's campaign didn't end when he got rehired. He is still one of a growing number of irate technology workers—some unemployed, some underemployed, some simply concerned—that has been meeting with U.S. and state lawmakers.


The purpose of the meetings: Galinsky and others like him are being galvanized not only by technology job loss but also by the possibility of getting legislators to push down the H-1B visa ceiling. That quota is scheduled to drop from its current level of 195,000 to 65,000 by Oct. 1, failing U.S. congressional action to maintain current numbers.

How likely is that? Early signs show that legislators such as Sen. Dianne Feinstein, D-Calif., and Rep. Cass Ballenger, R-N.C., after watching jobs vanish in their areas, may vote to lower the ceiling. In addition, Rep. F. James Sensenbrenner Jr., R-Wis., chairman of the House Judiciary Committee—the agency that determines key immigration legislation such as the ceiling number—earlier in the year addressed an Indian business group, telling members that the H-1B visa program will be "tightened," according to reports in Indian newspapers.

Participation in pro-labor groups such as the Programmers Guild is also growing, with technology workers "crawling out of the woodwork" to tackle issues involving technology jobs, said John Miano, former chairman of the guild.

So many people are showing up at Programmers Guild meetings—which are held in Morris Plains, N.J.—that the group is considering splitting in two.

Meanwhile, groups that have traditionally lobbied for a high visa ceiling—including the Information Technology Association of America and India's National Association of Software and Service Companies—are keeping a low profile.

Nasscom did not reply to requests for information. Harris Miller, president of the ITAA, based in Arlington, Va., said ITAA's member companies have not had to press for a high H-1B visa cap because demand for the visas has been declining sharply—only 79,100 were issued in fiscal year 2002, according to the U.S. Immigration and Naturalization Service.

The ITAA is "just going to see the way things go," rather than push to keep the 195,000 level, Miller said.

Indeed, with the mounting political pressure, many industry watchers expect the ceiling to fall. But some experts say it will be a matter of closing the barn door after the horse has run away, since many jobs have already been shipped overseas.

"The door may have already closed, as far as H-1B visas go," said Rep. Ballenger. "More and more of our tech jobs, all the big banks and telecommunications companies, they're hiring out jobs in India."

For Ballenger, the message from his constituents has been loud and clear—the fewer H-1B visas granted, the better. Ballenger's district is home to a number of fiber-optic cable companies' manufacturing facilities.

Companies including Alcatel, Corning Inc. and CommScope Inc. used to employ 17,000 people in North Carolina before the economy tanked; the number of jobs in that sector has since shrunk to between 4,000 and 5,000, Ballenger said, as unemployment in his district remains above 9 percent.

Offshore outsourcing has also contributed to the ITAA's disinterest when it comes to lobbying for a higher ceiling.

"Offshore is the challenge, not H-1Bs," Miller said. "It's more of a challenge to [have workers] be paid one-third or one-fourth of what U.S. workers are being paid than have [companies] saying, 'Bring workers here.'"