IT wages hit by Indian offshoring

The offshoring of IT jobs is cutting demand for home-based IT skills, resulting in lower pay for many IT workers, according to new research.

The quarterly Hot Technical Skills and Certification Pay Index report, by US-based Foote Partners, claims bonus pay for certain IT skills has dropped noticeably over the last nine months as the move to offshoring has increased.

Skill areas that have been particularly hard hit by offshoring include stand-alone applications development, which has seen an 8.5 per cent drop in pay last year; and applications development certifications, with an 18 per cent decline in their value over the past two years.

The report claims IT certifications pay began collapsing in 2003 as the need for premium bonus pay became unnecessary as more programming work is transferred offshore.

Overall certification premium pay in 2003 for 56 certifications surveyed among 38,000 IT professionals in 1,820 North American and European employers declined 5.6 per cent - after showing 0.5 per cent growth through 2001 and 2002 - according to the research.

"Europe is also going through a wave of offshoring," David Foote, president and chief research officer at Foote Partners, told silicon.com. "Those jobs have left and those skills bonuses have left."

Despite the overall downward trend on pay there are some skills areas showing increased pay rates for those with the right technical qualifications. Roles with project management certifications had 6.7 per cent growth last year, while security also showed a 1.1 per cent growth.

The worst performing areas included webmaster and internet skills (down 22.7 per cent), beginner certifications such as MCP, CCP and A+ (down 13.6 per cent) and databases (down 9.4 per cent).

In terms of stand-alone IT skills, Linux is the big winner in 2003, with open-source skills gaining the most value of any skill - a massive 25 per cent rise. Voice over IP, Gigabit Ethernet and XML skills also showed strong growth and are expected to be in demand in 2004.

Foote said: "If you look at the server operating systems and compare growth rates, Unix and Windows NT are in the single digits whereas Linux is in triple digits and as long as that continues the demand will continue."

Red Hat certifications are currently the most in-demand Linux skills, he said.