Another in our technology brain drain series:

Outsourcing Is Key As IT Salaries Spiral Downward Jan. 14, 2004

A study by Foote Partners shows salaries for IT workers with specific skills was 23% lower in 2003 than in 2001, and that the number of jobs moving overseas will continue to grow.

The growing number of companies moving IT work to low-wage foreign countries has driven down salaries for many IT jobs in the United States, and that trend is expected to continue, a salary-research group said Wednesday.

Overall, the premium paid for IT workers with specific skills was 23% lower in 2003 than in 2001, and the pay for certification in particular skills dropped 11%, Foote Partners said. It also found that while the general economic downturn contributed to salary deflation, outsourcing pushed compensation down even further.

In a yearlong study of 400 major companies, researchers found that by 2006, those companies expected 35% to 45% of their current full-time IT jobs to go to workers overseas, said David Foote, president and chief research officer at Foote Partners. "That showed a definite declining onshore workforce--fewer jobs for IT people in this country," he added.

The exodus of jobs has caused U.S. salaries in many IT areas to plummet, particular application development and maintenance, call centers for tech support, and some database work. In general, jobs that are related to implementation of IT strategies are the most severely affected.

"What we found is a lot of correlation between a decline in pay for skills and certification in areas that are actually moving offshore," Foote said. "There's no need anymore for premium pay for those skills ... and also, a lot of bonuses have quite frankly been redirected to a very small number of people."

In 2002, the high-tech industry lost 540,000 jobs in the United States, dropping to 6 million, according to the AeA, formerly known as the American Electronics Association. In 2003, the industry is expected to shed another 234,000 jobs.

More at link.

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