Strategic CIO // IT Strategy
Commentary
8/22/2006
10:46 AM
Paul McDougall
Paul McDougall
Commentary
Connect Directly
RSS
E-Mail
50%
50%

U.S. A Middling Fourth In Top 10 Countries For Tech Worker Value

Here's the scenario: You're in charge of technology for a U.S. multinational, and you need to roll up 1,000 computer programmers fast to support a new business initiative. Do you choose homegrown talent, or do you outsource to some far-flung continent? Based on industry data and conversations I've had with senior tech executives, I've compiled a subjective list of the top 10 countries, from first to worst, that are the best options for fulfilling your company's IT labor requirements.

Here's the scenario: You're in charge of technology for a U.S. multinational, and you need to roll up 1,000 computer programmers fast to support a new business initiative. Do you choose homegrown talent, or do you outsource to some far-flung continent? Based on industry data and conversations I've had with senior tech executives, I've compiled a subjective list of the top 10 countries, from first to worst, that are the best options for fulfilling your company's IT labor requirements.India: Still the best value for your technology dollar. The average annual salary for IT workers is a highly competitive $9,898, and the emergence of world-class outsourcers like Wipro, Infosys, and TCS means the work provided is top-notch. The one drawback is that Indian salaries are rising at about 15% per year, so CIOs need to factor that into their plans. U.S. organizations tapping Indian IT talent include virtually every major Fortune 500 company, from GE to IBM. The federal government and many U.S. states also farm some tech work to India.

China: No. 2 with a bullet. Average salaries are a smidge higher than in India at $10,095, but the country offers a vast pool of highly trained workers. And companies expanding into China to tap its lucrative consumer market will have the added advantage of local tech support if they outsource IT ops to the country. The biggest downside is the language barrier. Chinese tech workers with solid English skills command premium salaries. U.S. companies outsourcing to China include Target and Citigroup.

Romania: Another up and comer. Under the former Soviet Union, Romania and other Eastern Bloc countries were a major source of technological innovation for the Red Army's military machine. Much of that know-how has since been transferred to the private sector. The average tech salary is $15,743, a good deal cheaper than other Eastern European outsourcing players, including the Czech Republic and Hungary. Romania already provides IT labor to a number of U.S. tech giants, including Oracle and Microsoft.

United States: Ranking fourth, the United States doesn't make the medal round in this contest. U.S. tech workers are among the best on the planet, hands down. The problem: There aren't enough of them to meet corporate America's insatiable demand for IT labor. American high schools churn out far too many grads incapable of taking college-level computer science, math, and engineering courses, and retiring boomers will add to the shortage. All that translates into high salaries for qualified workers. A good Java programmer in a major U.S. city can still command close to a six-figure income.

Canada: A couple of years ago, the United States' Northern neighbor would have ranked third on this list. Its proximity and cultural similarities to America help make up for its relatively pricey workforce. But the rise of the Canadian dollar to near parity with the U.S. dollar has eliminated almost all of Canada's already thin cost advantage. Average salary is now $43,841 (USD). American companies outsourcing software development to Canada include Tufts Health Plan and Allmerica Financial.

Ireland: Another once popular offshoring destination that's losing ground to other countries due to rising costs. Dublin is fast becoming one of the world's most expensive cities. Adding to the problem is the fact that its tech workforce, though highly skilled, is relatively small. Average salary is $57,072, second only to the United States. Hewlett-Packard and IBM are among the American firms drawing on Irish IT talent.

Russia: In at seventh, Russia is also a country in which top-tier military IT skills have filtered into the private sector. But Russia remains a risky place to do business, and corruption is rife. Also, many Russian authorities still have that old Soviet tendency to rule by fiat, despite what the law says. Just ask investors in oil giant Yukos. Average salary for programmers is $21,018. U.S. businesses outsourcing to Russia include Caterpillar and Boeing.

Brazil: The fastest growing outsourcing destination in Latin America, Brazil will figure largely into the outsourcing plans of U.S. companies for years to come. Its location in the Western hemisphere puts it on competitive footing with Canada, yet it's a lot cheaper. Average salary is $15,935. Dell and ADP are among the U.S. companies that maintain outsourcing operations in Brazil.

Philippines: Strong, emerging Asian regional player and overflow destination for India. The country boasts good English skills throughout its population and a globally competitive average salary at $12,522. The Philippines will be an increasingly important outsourcing destination for Japanese companies and U.S. businesses operating in Japan. Count Procter & Gamble and AIG among those outsourcing to the Philippines.

Singapore: Rounding out the top 10, this is a politically stable Asian country with highly skilled workers in a business friendly culture. Its downside is its high average salary of $41,512. U.S. companies outsourcing some operations to Singapore include First Data Corp.

That's my top 10. Disagree with this list? I'd be interested in hearing your nominees; we might publish some of them.

Note: Source for salary data is outsourcing consulting firm NeoIT.

Comment  | 
Print  | 
More Insights
Transformative CIOs Organize for Success
Transformative CIOs Organize for Success
Trying to meet today’s business technology needs with yesterday’s IT organizational structure is like driving a Model T at the Indy 500. Time for a reset.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Must Reads Oct. 21, 2014
InformationWeek's new Must Reads is a compendium of our best recent coverage of digital strategy. Learn why you should learn to embrace DevOps, how to avoid roadblocks for digital projects, what the five steps to API management are, and more.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
A roundup of the top stories and trends on InformationWeek.com
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.