Offshore outsourcing shrinks UK tech workforce

The success of offshore outsourcing is causing the number of UK-based tech staff to decline.

Research by analysts Ovum predicts a six per cent fall in the number of UK-based software and IT services staff by the end of 2008 - the equivalent of losing 5,000 onshore positions each year.

The bulk of the job reductions will be in programming, lower-level technical roles, call centres, helpdesks and back-office administration.

In contrast, within three years there will be 130,000 offshore workers delivering software and IT services for UK organisations - double the number currently, according to the research.

Ovum predicts the number of UK-based staff hired by offshore companies will continue to increase over the period - but not sufficiently to offset the overall decline in UK software and IT services (S/ITS) jobs.

But rather than fight this trend the analysts urge companies to focus on business-centric IT skills which will be critical to the success of both the IT sector and the wider UK economy.

Ovum senior analyst Phil Codling said in a statement: "We will see the UK-based S/ITS workforce shrink in size under the effect of offshoring."

He said there is "no point" trying to fight the decline in jobs that can be readily offshored or automated and added that companies should instead focus on developing more business-focused skills.

But he warned industry may not be well-prepared for this challenge as workforce development has slipped down the agenda for many IT organisations.

He said: "We face the prospect of a skills time-bomb in IT. It is not clear where the next generation of highly-skilled, experienced programme and project managers will come from."