As American job growth falters, the IT-services industry shines as one of the few brights spots, adding 4,200 jobs in July, the Labor Department says. That accounts for 13% of total nonfarm job growth that month. But the source of much of the hiring may surprise critics of offshore outsourcing.
Except for IBM, it isn't big domestic firms adding U.S. jobs, but offshore operators. Wipro Technologies has hired 300 consultants in the United States over the past 18 months. Infosys Technologies says it will hire about 500 U.S.-based consultants this year.
Offshore providers need more system architects, consultants, and other high-level IT pros in the United States as they take on more-complex projects. In some cases, not having a strong U.S. presence can be a deal breaker. Agile Software, a maker of product-life-cycle-management software, recently hired Opsource Inc. to provide network-management services from India. However, says Agile human resources VP Pete Hilliard, "We wouldn't have done the deal if they didn't also have resources locally that would be supporting us."
As the economy recovers, American businesses turn to IT services firms rather than hire full-time employees. Only 9% of 1,400 U.S. CIOs plan to hire in the fourth quarter, according to a poll released last week by staffing firm Robert Half International Inc. According to research conducted for the InformationWeek 500 to be published next month, 87% of the largest U.S. companies employed temporary or contract IT workers this past year, up 10 percentage points from 2003.
This is occurring when offshore firms are enjoying double-digit growth. But the real question may be, when will Indian IT workers start complaining that their employers are hiring too many Americans?