In general, outsourcing is not really scary. All about outsourcing is to shift some of IT functions from in-house to external IT service providers. Your strategy to deal with outsourcing is to make yourself fit in the trend. There is another kind of outsourcing – offshore outsourcing, that could cause real threat to us. We’ll talk about offshore outsourcing in the next chapter.

1. The Outsourcing Trends

According to IT labor market research, 35% to 45% of full-time IT jobs in the U.S. and Canada will be shifted to contractors, consultants, offshore technicians or part-time workers by 2005. Some analysts and IT labor experts predict these figures even higher.

Shifting IT job functions from in-house to outside service providers is so called outsourcing. As this trend gets increasingly popular, more and more executives want to give it a try and throw something to the outsourced den.

Outsourcing benefits to business

Like it or not, outsourcing is an inevitable trend because:

• Outsourcing is cost-effective for many IT functions from application development to systems support.
• Outsource provides specificalized expertise in the latest technologies that could be hard to achieve through training in-house staff because of the fast pace on new technology advancement.
• Outsourcing could eliminate certain HR problems and labor conflicts and reduce HR management and payroll functions within the company, thus improve overall operating efficiency.
• By reducing the in-hours workforce, Outsourcing out some pressure on existing staff and push them to improve performance. It also helps in-house staff learn new technologies and skills from outsourced contractors and consultants.
• As software products become standardized in component based modules, it makes more sense to outsource software development projects.
• Internet technologies make remote and distributed IT service outsourcing cheap, easy, practical, and effective. Using the Internet, outsourced technical services such as remote DBA and online support become possible.

Negative side of outsourcing

Outsourcing is often touted as an easy way to achieve more functionality for less money, with less aggravation. However, not all management people agree with outsourcing. Concerning issues of outsourcing include:

• For some business and companies, outsourcing hasn’t proved to be a lower-cost alternative to keeping IT inside corporate walls.
• Outsourcing can make company locked into long-term contracts that may not be relevant to the business anymore due to changes of economy. In this case, in-house function is a better choice if you want to be in control of your own destiny.
• Security is often a concern in outsourcing, especially offshore outsourcing. In order to safeguard critical business secrets and technologies, companies often keep IT inside the corporate boundary.

After all, outsourcing is not magic to solve business problems. In fact, very few corporations outsource the entire IT body. More or less they keep some of IT functions inside the corporate wall. A lot of companies still do everything in-house.

2. How to Fit in

The strategy to dealing with outsourcing is to fit in with the trend. The outsourcing trend moves IT jobs from corporations to IT consulting firms that provide software development, network support, system integration, and so forth. Thus, instead of having a corporate career, you may find your position as an outsourcing provider – you can work as a consultant, contractor, or temp worker; you may need to work on multiple projects concurrently; you may be on your own as an independent consultant.

If you lost your corporate job due to outsourcing; if you feel it’s harder to find a permanent job with a corporation, you should turn to IT service opportunities with a consulting career. As more and more IT jobs go outsourcing, there is an increasing demand for IT consultants. Although you don’t have the same good benefits and stability as on a corporate job, you get better paid and have more flexibility when working as a consultant. Also, you have better chance to learn new technologies and build experience quickly as you may be assigned to various challenging projects.

US-based companies are sending more and more tech jobs to overseas. Hiring overseas technical talent to do the job is so called offshoring. In recent years, rush to offshore outsourcing has become a significantly growing trend in IT industry – significant enough to draw us to pay serious attentions.

1. The Offshore Trend

All IT industry leaders -IBM, Microsoft, HP, Oracle, just name a few, are going offshore to reduce costs. When smaller firms see this from the leadership, they must follow. Competitors to these leading firms also have little choice- they must drive down labor costs or be priced out of markets.

In a typical offshore project, 50 to 80 percent of the work shifts to offshore countries, most likely India. India is currently the undisputed offshoring leader, but other countries cited by executives as prospects for offshoring include China, Ireland, the Philippines, Russia and even Vietnam.

Offshore tasks range in a wide board of functions from programming to maintenance, as well as technical support and other “grunt work,” Jobs that can stay in North America are likely among high-design, high-touch, and high-creativity works.

Why offshore

Cheaper labor overseas is the main advantage to shifting technical work to offshore operations. The cost of some types of IT work is 20% to 50% less in places such as India, Eastern Europe and parts of South America.

Some executives claimed that they cannot find qualified American IT workers so they have to go offshore. That’s not true. There are in fact plenty of technical talents in homeland. The only problem is, employers don’t want to pay the premium, or they cannot afford. Since the nature of the business has changed, corporations can’t afford to retain the whole IT operations in the U.S. anymore.

2. What Makes Offshoring Possible

The key factor to offshoring success is precise definition of tasks. As for general IT tasks such as software development and maintenance, the biggest problem in US-based companies’ offshore projects has been the fuzzy spec. Fuzzy specifications increase communications overhead, and can even make the project fail.

Recent changes in information technology have removed many obstacles to offshore solution. New technologies have been utilized to commoditize software and business application development. Today’s application systems have become component-based, and these components are perfect candidates for offshore work.

The most significant driving force that made offshore work possible is the ability to precisely specifying system design and architecture using Unified Modeling Language (UML). UML can help eliminate communications problems and increase efficiencies by reducing the need for discussion. With UML architects can layout complicated enterprise system accurately and define each system component in detail level.

New tools that implement UML provide a realistic way for software systems architects to precisely define all aspects of a prospective system. By following the UML blue print, offshore workers know exactly to do. They can build and deliver products and services efficiently, and they have very little chance to fail.

3. Offshore Impact to Homeland Techies

The incredible labor cost savings in offshore operations are becoming ever more attractive in a slow economy. Offshore migration is making IT jobs in the USA very different from what they were 10 years ago. US IT professionals who used to hop jobs and earn fat bonuses now face an uncertain future when their jobs are outsourced to companies in India and other nations.

Offshore operations pose immediate pressure on the area of software programming and application development. American programmers will have tougher time in the future. They will see less job opportunities as well as low or no pay increases. Offshore outsourcing is the contributing factor in this situation. In addition to offshore competition, US-based competition from eager immigrant programmers is also taking its toll on North America labor rates for programmers.

Currently offshore operations target on areas including:

• Data entry
• Software programming
• Custom application development
• Back-end processing
• Technical support

As time goes by, American corporations will aggressively find a much broader set of projects that can be accomplished offshore. However, no matter how offshore goes crazy, there will always be enough work for us to do onshore. With the right strategy, we can beat it and win.

4. How to Beat Offshore Trend

Don’t let your career prospects be roiled by offshoring. The strategy to beating offshore competition is to position yourself on functionally homeland based tasks that cannot be shifted to offshore. You must acquire certain skills and knowledge in order to secure such a position. The following guidelines are important for you to survive from offshore challenge.

Moving to management

IT workers facing offshore challenge should consider moving to management area. While many IT projects are outsourced to offshore, the management functionality must stay close to clients and corporate centers. Those who retrain themselves in project management will be saved.

Becoming technological leader

Every offshore project keeps technological leadership onshore. To avoid getting marginalized, onshore IT workers must focus on current technologies and become technological leader in the organization. Offshore projects require USA-based workers to take on additional leadership tasks. If you want to work onshore, you’d better position yourself for that type of role.

Offshore competition only threatens those who lost the edge. So don’t get stuck in dead-end technologies. If you are a programmer, you need to move beyond coding and maintenance. Get you hands on the latest technologies – J2EE, .NET, Web Services, IT security, wireless networking, etc.

Watch the trend closely and plan ahead. You should actively seek projects that keep you working with the latest technologies, and you must keep learning. Always Aim for the top. Get certified and take training classes to make yourself more competitive at home and abroad.

Focusing on design and architecture

The safe harbor shielded from offshoring threats is the area of design and architecture. If coding is your thing, you want to be an architect. Architect is the highest paying IT job that does not require the management of people. If management is not your choice, then go architect. Jobs in architecting function are usually titled Enterprise Architect, Data Architect, Systems Designer, or Business Systems Analyst. The core tasks are among analysis, specification, planning, design, and architecting.

In fact, a lot of programmers and senior developers are preparing themselves to move into the role of architect. They are seeing that offshoring has turned software code into a commodity and the boom in programming salaries is over. The focus on IT projects is longer in coding. It’s in analysis and design.

The big opportunity in architecting jobs will be taken by first movers who start to migrate skills away from programming and towards design functions. Because only a few design positions are needed for every dozen coders, programmers who make the move now have better chance to fill those slots. Those who wait too long to transition will find themselves completing with plentiful global labor for the actual coding and construction of these systems.

On the other hand, offshoring is driving demand for USA-based architects. Because America based companies must provide solid specs before engaging offhsore firms, the number of architecting jobs will be increasing.

To become a high demand architect, you must have programming experience, you must you know the business, and you must communicate well.

The following preparations are necessary in order to transaction from programming to architecting:

• Mastering Unified Modeling Language (UML) – learn it quickly.
• Building experience on enterprise platforms – either J2EE or .NET.
• Leaning to create and use framework – Apache Strut is a good one to start.
• Having deep understanding on design pattern.
• Knowing the business model.
• Improving communication skills.

If you have integrated skills of programming, UML design, and the business itself, you can become a successful architect.

Knowing the business

A competitive onshore IT worker must demonstrate business savvy. Becoming a technological leader with proven business know-how can strategically secure your position onshore. Therefore, you need to learn about the inner workings of your company, the business model, and the industry. Strong knowledge of the specific business can help your career in many ways.

Improving communication skills

Develop solid oral and written communications skills. You must communicate like a pro – Get your message out to users, company clients and managers as well as colleagues.

In IT industry, layoff is inevitable. Most likely, layoff has nothing to do with employee’s job performance but often caused by uncontrollable external situations. In such a highly competitive environment, companies were sometimes forced to reduce workforce due to economic conditions and business operation problems. Layoff is often a result of company reorg, merger and accusations, and so forth.

As IT pros, a lot of us had been handed the pink slip or at least see co-workers let go. Layoff is one of the most frustrated career challenges we have to face. The pressure, frustration, and emotions could impact our career negatively for long time. To avoid career damage from layoff, we offer you the practical tactics that you can apply easily in you work. By using these tactics you can often skip layoff, or recover quickly if it does happen to you.

1. How to Avoid Layoff

While no one is immune from layoffs these days, those who have built stronger career base have more power to fight back. A strategic career base includes positioning, qualification, and affinity:

• Positioning: If you can dynamically position yourself in work environment, you can somehow exclude yourself from layoff, or defer it to win time.
• Qualification: Qualification delivers value. Those who were valued high have more fighting power.
• Affinity: Never overlook the power of affinity that derives full-dimension network of strategic relationship across all levels, layers, and boundaries in your workplace.

Career base cannot be built overnight. It takes time and it is a continuing process. If you were not aware of it before, it is now the time to evaluate how strong your career base is and how to enhance it. So, let’s discuss a few applicable tactics to reinforce your career base by improving your positioning, qualification, and affinity. With these improvements, you have much better chance to beat layoffs.

Becoming a key player

You must work as a key player within a team, project, division, department, or the entire company. Key players work on systematic projects instead of isolated assignments. Key players are often involved in design, architecture, and systems. For instance, an application architect and a database administrator could be the key players in a project. If you are just one of the low key programmers in the development team, you may be laid off easily because your work can be replaced or transferred without impact the overall project. However, if you are a key person in system design and data architecture, it is not that easy to let you go unless the company is out of business.

As you can see, this tactic contributes positioning and qualification to the career base.

Showing your value

Do high quality work, complete project under budget, always meet the deadline, show your company how much they need you …that job was made for you. If necessary, put additional effort and your own time to your work. Keep learning new skills and enhance your experience.

Enhancing visibility

Visibility is about positioning. Our research shows that highly visible employees are not easily to be targeted in layoff decisions. It is understandable that people of high visibility have greater influence on the team and environment, thus the management would rather leave them alone in order minimize the impact of layoff.

It is fairly easy to increase visibility in work place. Work harder than you have ever worked especially layoffs are on the way. Be the first to come and last to leave. Let everyone see your commitment dedication to the company. Make a habit to take every opportunity to stand out from the crowd. Talk to people often and make them know you. Show your interest on what others are doing. Always offer help. Provide suggestions the management. Prepare yourself to make impressive speech in meetings.

Acquiring business knowledge

It’s not enough to be good at technical details. You must learn how the business operates and know your company inside out. Your business knowledge builds more qualification and adds more value on you. Also, with enough business knowledge you can see the whole picture of the company and can identify problems and threats at the early stage, thus you can prepare and make quick response. For instance, when you see the development division where you are working may be eliminated due to out-sourcing, you may find a way to transfer to system support division that will be kept in house.

Acquiring business knowledge is easy. What you should do is pay attention to how the company’s business works. You should also build a wider scope of contacts within the organization. Try to know people in different departments and divisions, and learn what they are doing.

Building personal relations with decision power

When you get into a work place, you need to quickly identify who are among the decision power. Most likely they could be your boss, your manager, or supervisor. For sure you must build good working relationship with them, but that’s not enough. Going one step further, you should try to build personal relations and make friends with them. Once you become friends, personal relations will be intuitively factored in for decision making and you will be protected by your friends. That’s the power of affinity.

This approach is not easy to everyone. Fortunately, there are many books available to teach you how to create successful relationship with all kinks of people.

Offering compromise

When layoff seems unavoidable, don’t just wait for fate. It is the time to communicate with the management and do whatever you can to influence their decision in your favor. In this case, the most effective way to defer layoff is to offer compromise solutions.

What you need to do is to talk to your management team and discuss the layoffs openly. First you should express your understanding of the company’s situation and show your support to the management’s decision for saving the business. Then you could offer comprise solutions such as voluntary pay cut or unpaid time off as an effort to help company through the difficult time. During the discussion you may review your past achievement with the company and demonstrate your commitment to help the company and the management term by personal sacrifice.

This is an effective strategy of positioning. In most of the time, this could truly impress your boss thus eliminate or defer your layoff. Smaller paycheck is better than no job. More importantly, you win the time to prepare for the next move. In general, an offer of 15% pay cut or one week unpaid leave per month would be sufficient enough.

2. Preparing for the Worst

Layoff can happen to every employee, however most of us do not think about that possibility until we are actually laid off. Don’t let layoff turn you down, prepare it ahead and keep you career move. To make yourself prepared, you must be able to sense early signs before layoff happens; you must have a financial plan to cover the worst situation; and you must make yourself ready to jump onto the job hunting boat.

Watching for early signs

Stay alert in the workplace so you can sense early signs before mass layoff announcement. That can give you precious lead time to maneuver your career. Specially, pay attention to the following events in your company:

• HR policy and rules change: An announcement of hiring freezes in either your department or companywide is definitely a bad sign that indicates a problem in operation and profitability. The next logical would be the cut of head count if the problem cannot be solved soon. Other policies, i.e., new rules in regard to vacation or internal processes such as expense reports could also indicate potential problems within the company.
• Stock performance: If you work for a public trade company, then your company’s stock is a good indicator to signal problems. Layoff is near if you see sings such as (1) Stock price declines consequently for more than 6 months, (2) Stock has been on the “strong sell” list for the last quarter, or (3) corporate earnings have been flat or declining. You can check out your company’s filling report to find out more about its financial situation.
• Company re-org: Over 90% of re-org results in down sizing, elimination of divisions, and outsourcing, and of course, layoffs follow. As early as possible, you should assess how re-org could affect your job, project, and division. If your position would be affected, you should start to look for transfer within the company or outside opportunities.
• Merger and acquisition: If your company is planning to merge with other company, acquire other company, or be acquired, then watch out your job. Merger and acquisition create redundant functionalities that often results in multiple people for one position. Since a team effort to complete one person’s job is not necessary, layoffs will happen.
• External changes: Changes in external environment could lead to your company’s layoff. These changes include national economic conditions, up and down in industry sectors, business development in certain geographic area, and world wide competitions. So stay alert and keep on top of trends.

Financial Preparation

The significant impact of layoff is financial disturbance. It gets worse if you have a family and are the primary wage earner. So it makes sense to plan ahead. The following tips are helpful in financial preparation:

• Reserve emergency cash – As suggested by most financial advisors, you should save the equivalent to six months’ salary to tide you over if you lose your job.
• Cut spending – If the noise of layoff is in the air, you need to come up with a plan for cutting expenses. A home budget analysis is necessary in order to eliminate most unnecessary expenses.
• Defer major Purchases – As layoffs come close, it is not a good time make major purchases – new car, electronics, PC, etc. Even if you have already save money for them, hold it and defer the purchases.
• Manage debt – Uncontrolled debt can cause financial disaster in jobless situation. If you are already in debt, particularly credit card debt, you may want to consolidate your loans into a single monthly payment with a lower interest rate. If you own a home, consider a low-interest home equity loan.

Job hunting readiness

Make yourself ready all the time so whenever necessary, you can get into the job market as quickly as possible. This way you make precious lead time and have a better chance to maneuver your career ahead smoothly. The following preparations are needed:

• Keep resume updated – Review your resume every two months and update it with new skills and experience, tune the focus according to new technology trends. Prepare multiple versions with different focuses and areas. Update corresponding cover letters too.
• Manage career network – Make regular contact to your career network – your previous and current co-workers, friends and families. Organize and update contact information.
• Follow job market – Know what’s going on in the current job market in your career area. See what’s hot what’s not. Check out employment section in the local newspaper and online job sites.
• Have references ready – Keep in mind that who you are going to use as you job reference. Make contact and refresh relationship with your reference people.

3. How to Survive from Layoff

Whether you’re a young techie or a seasonal IT pro, the chances are, sooner or later you may find yourself, often through no fault of your own, out of work by layoff. Although painful, this is not the end of world. You can survive, and it is possible that it can turn out to be a better world. Here’re some tips to help you beat layoff:

• Negotiate a Severance Package – Most companies offer some severance when you’re let go. You should negotiate a better package at the time you are laid off. Talk to the management, review your contributions to the company, and ask more.
• Apply for unemployment insurance – Take the pink slip and apply for unemployment insurance benefit at the Social Security Administration Office. Do this as soon as possible because it takes time to process before the benefit check arrives. The check is certainly much less than your salary but it helps.
• Take advantage of government programs – In the event of a layoff, you are most likely eligible for federal or state sponsored unemployment assistance programs. These programs can help you in training, education, and even loans to help you set up your own business. Programs vary from state to state. Check them out and take advantage of them.
• Look for part time or temp job – While you are searching for permanent employment, also consider part-time or temporary jobs. Part-time and temporary jobs are more flexible and need less commitment from employers, thus are easier to land.
• Go with out-sourcing – If your job was eliminated as result of out sourcing, then contact the out-sourcing company and present your skills and experience with emphasis on specific industry and business knowledge, you have a chance to be hired to provide out-sourcing service to the same company.
• Keep in touch with employer – Even after layoff, you still need to keep in touch with the company and communicate with key people there. In a lot of time you can find opportunities to do some project-based contract work. But don’t put too effort to try to go back. You major goal should be find new job.
• Use your network – You can never overlook the power of network. Contact your career network and let everyone know you are look for job. Ask for help, nothing to shame here.
• Search for job online – The most online job site are monster.com, dice.com, and careerbuilder.com. Make sure you post your resume to these sites at least. Update your resume every week so yours goes to the top of the list. Local newspaper’s website may also provide job search in local area.

No wonder during dot-com booming years the state had hard time recruiting qualified people. With big bonus and hype future prospects, nobody wanted to work for the state. During that time the state often provided job fair in hotels and offered jobs on site. It was so easy to server the public.

But now things changed completely. Still in Sacramento, California, an opening of Associate Programmer Analyst position (the lowest level) attracted over 1000 applicants. People have to take exams to get their names on the list, and then hope to see their names move up to be reachable. Only those whose names on top 3 ranks may be selected for interview.

Why state jobs become so hot? Job security, that’s the answer. After all of the lay-offs, outsourcing, offshores, people get scared and start to look for the safe heaven.

Are state jobs really secure? That’s true. It’s no doubt that any government job, federal, state, local, is more secure than public sectors. As for the state, like California, state workers job security is ensured by two major factors, –

First, union protection. State workers have strong unions. That really make a difference.

Second, state jobs cannot be outsourced to offshore countries like India and China, at least not now. So state IT workers don’t have to worry about jobs been taken by foreign workers.

However, not all state jobs are equally secured. The secret is, it depends how the agency, department, and position are funded. Agencies funded by special funds and federal funds offer more secured jobs than those by general funds.

For example in California, agencies like Franchise Tax Board (FTB) is funded by special funds, Department of Community Service gets a lot of federal funds, therefore their IT positions are very secure. Department of Motor Vehicles (DMV) is funded by both special fund and special funds, thus the jobs there are OK, although not as high as top level secured. On the other hand, departments like Parks and Recreations is funded mainly by general fund, therefore jobs there are less secured. But still, if it is a state job, you get job security at certain level.

Thus, when you are in an interview for a state position, ask how this agency and this position are funded. By knowing this, I get an idea how strong your job security could be.