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The offshore conundrum

April 2013
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The uproar over the Royal Bank of Canada’s outsourcing IT jobs last week brings to mind the tremendous problem that appears in the industry. The bank, as well as the many other companies that outsource IT jobs to countries which historically lower average wages, claims that the practice allows them to be more competitive.

This has raised the complaint that Canadian IT workers, who earned an average of just over $68,000 annually (Statistics Canada, 2011 figures), should be more competitive. And, here is where the problem lies.

Look at the requirements for your standard worker in the Information and Communications Technologies industry sector. I have a favourite first assignment in two of my courses, where students check the job market to determine what employers are looking for. Some trends are quite evident.

Employers are looking for workers with a minimum of a two-year IT diploma, or a bachelor’s degree in Computing and Information Systems. Frequently, positions require additional industry certifications pertinent to their specific job requirements. Most jobs above the introductory level have minimum experience requirements as well, and the last time my classes went through this exercise in January, these jobs were calling for a three to five- year period of experience for a mid-level job.

Consider these requirements. These workers have invested a minimum of two years in school getting an IT diploma or four for a bachelor’s degree. On top of the costs and time, industry certifications involve experience and the examinations are often costly. For example, the Microsoft Certified System Engineer exams, of which there are 7, cost about $185 Cdn each. Further, these are usually applied exams, where the people taking them are expected to be able to answer questions based upon real life situations rather than simply regurgitate information and people are recommended not to attempt the exams until after at least a year of experience with the product.

On top of this, the average IT program prerequisites call for higher math and problem-solving skills and strong communications skills. The field calls for an above average student to meet the heavy requirements of a position with a high level of technological knowledge and the ability to meet the very flexible requirements of the position. In short, this is usually a field for the “best and the brightest,” who have very good academic skills and has invested a great deal of time and money to obtain a mid- to higher level position.

So, here’s the conundrum. We expect substantial requirements for workers in the field, yet are unwilling to pay them an appropriate salary. We have certainly seen the effects, with all of the major banks in Canada outsourcing many of their IT positions in recent years. Given this trend, we can only assume the trend will continue, with the loss of both jobs and capital from the country…

 

 

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