Contractors may be interested to learn that companies are increasingly turning their backs on outsourcing and keeping the work in the UK instead.
According to Hays, companies have realised that outsourcing work overseas doesn’t necessarily bring the cost savings they were anticipating. Add to that the fact that wages for IT personnel in countries like India are increasing by 20% a year, the cost savings have reduced dramatically.
A lot of companies have reported communication problems, especially if they outsource to people in different time zones. And, although a lot of Indians do speak good English, it is different English to ours and if the outsource company does not fully understand a project’s requirements, the results will not be as expected.
IT contractors have been hit badly by this craze for outsourcing projects overseas so it’s good news that companies are now reverting to in-house projects. The number of available contracts, and the rates paid, have both been affected by outsourcing in recent years. When you have a ready supply of labour, the cost of that labour will fall; it’s one of the basic laws of economics.
However, if companies are going to keep their contracts on-shore, the UK’s IT contractors should start to see an increased demand for their services, and this in turn will start to push up rates.
There will always be a place for outsourcing; advances in modern technology have ensured that. But surely it has to be good for the British economy as a whole if we can keep as much work here as possible.
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