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Tuesday, 06 May 2014 12:59

The ugly truth of offshore outsourcing surfaces at last Featured

The ugly truth of offshore outsourcing surfaces at last

We can deny it no longer. Even the recruitment industry is now saying it. Offshoring has killed the local ICT jobs market.

Surprisingly, the latest confirmation that Australia is contributing to its own skilled jobs demise comes from a source that has in the past been accused of hyping the fictitious ICT skills shortage.

Listed recruiter Clarius, which owns the Candle ICT recruitment firm, in its latest Skills Indicator report, states that in the March quarter there was an oversupply of 1800 ICT professionals.

This compared to claimed surpluses of 1,500 and 1,200 for the September and December quarters last year respectively, self-serving figures that were viewed with so much scepticism that Clarius had difficulty getting a run for those reports in the tech media.

The fact is that Australia has not had an ICT skills shortage for many years thanks mainly to offshore outsourcing and to a lesser extent skilled migration.

These days ICT courses at tertiary institutions have difficulty attracting the numbers needed to keep them open. The courses that still operate are filled mainly with full fee paying foreign students. Australian school leavers avoid ICT courses like the plague because they believe there are no jobs when they finish.

The plight facing the Australian ICT jobs market is not unique to ICT or to Australia. It stems from the twin memes that globalization of labour is desirable and that first world economies should not be based on local manufacturing. Both memes are blatant falsehoods that have been perpetuated by self-serving multinational corporate interests and their lackeys.

First world countries like the US, Australia and Canada are closing factories almost as fast as our planet’s species are dying out. We are told this is good because as first world countries we must transition into service-based economies and leave the manufacturing to lower cost markets such as China, Vietnam, India, Thailand, and…err Germany, Sweden and Japan.

So, as we have agreed to let our manufacturing go to the blazes, we are told that value-added services are to be our salvation. And what services are these? Call centres? Not really – that was one of the first casualties of the offshore BPO trend. Retail? Definitely not – small retailers are dying out thanks to a combination of large corporate retailers and Internet e-tailers, both of which have comparatively much lower staff to turnover ratios. Of course there are low paid jobs for baristas, waiters and cooks in cafes and restaurants.  Healthcare? Maybe, although it’s hard to see where the growth is going to come from unless it’s counselling services for the clinically depressed unemployed.

Perhaps dear readers, because of the demographics of this site, many of you are thinking that our salvation may be in the growth of web services – data centres, web development and so on. Well yes there is a strong argument to keep data centres onshore so there is some growth there. However, web design and development in many cases if not most is being outsourced to the lowest offshore bidder like other ICT services.

Australia, because it is a pretty nice place generally, could be considered a tourist destination. However, as immensely popular tourist destinations Greece and Spain have demonstrated with their 25% plus unemployment rates tourism alone cannot sustain a first world economy.

Thus, we are left with the inevitable conclusion. Australia will continue to ride on the back of mining, supported by agriculture. Meanwhile, as is the case in the US, displaced manufacturing workers will be forced to seek whatever lower paid jobs they can in service industries. Perhaps as some politicians have suggested these displaced workers could retrain in order to find “new economy” jobs such as gardening, domestic services and mobile dog washing.



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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.




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