Offshoring hits demand for UK software developers

Managers and consultants account for larger share of new jobs

Computerworld UK staff (Computerworld UK)
26 September, 2007 10:31
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The jobs market for software development in the U.K. is shrinking, according to research by IT staffing firm ReThink Recruitment.

It said that the proportion of new IT jobs created in software development had fallen to 28.5 percent from 34.3 percent a year ago.

And it said the proportion of new jobs being created in IT support roles had shrunk from 24 percent to 21.9 percent over the same period.

ReThink said the drop-off indicated that offshoring was affecting the IT market in the U.K., since software development and IT support are both functions that are commonly offshored.

The shift means that higher paying IT roles, which include consultants and managers, now account for a larger share than ever of the IT jobs market in the U.K.

ReThink Recruitment said the findings reinforce the view that a global division of labor is emerging in IT, with the U.K. specializing in project management and consultancy while developing countries increase their share of work in more technical areas.

Jon Butterfield, MD of ReThink, said: "Some U.K. financial services businesses are now shifting application development offshore to low cost locations. This is lessening new demand for some programming skills in the U.K.

"But as India moves up the IT value chain, so is the U.K. Offshoring raises quality control issues, which strengthens demand for project managers in the U.K. to manage processes."

Butterfield said IT contractors could help guarantee their future income by updating both their IT and business skills.

ReThink Recruitment said that the U.K. software development industry was dominated by small-scale vendors or teams, who were less able to benefit from economies of scale by sending work offshore. This could make the U.K. software development industry more resilient to offshore competition than IT support roles, it suggested.

Butterfield said: "Software developers working in-house are much more likely to be seen as creating value for the business, which means there is greater reluctance to relinquish control to an offshore supplier, whereas the IT help desk is inevitably viewed as a cost."