Outsourcing: How Safe Is Your Job?

TOP SECRET
Defense/aerospace and homeland-security-related jobs are particularly hot. "There are plenty of jobs in the defense sector," says David A. Germond, CEO of the Defense Talent Network, a Web site specializing in high-tech defense/aerospace and homeland-security job listings. "This is the best I've seen it since 1967." The problem, says Germond, is that there aren't enough engineers around with security clearances to fill all of the available job slots.

NWclassifieds Job Expo, a regional job fair in Seattle, was expected to attract hundreds of engineers from the area. Newspaper ads promoting the show put out a specific call for engineers with security clearances who could move immediately into defense-related positions. They indicated that engineers with active security clearances could expect to find at least nine companies ready to hire them. Even those with retired clearance status were encouraged to attend.

Another job fair called TECHEXPO Top Secret, held this past March in Burlington, Mass., sought high-tech professionals with security clearances. Companies there included Boeing, Lockheed Martin, Mitre, Northrop Grumman Electronic Systems, Raytheon, SM&A, and Titan.

Other companies actively looking for EEs with proper security clearances include BAE Systems, SAIC, CACI, and Loral in Sunnyvale. "There may be as many as 20,000 engineering openings in the U.S. that are going unfilled because they lack clearances," says Germond. Part of the problem, he notes, is that "many of the engineers who once had clearances gave them up in recent years to go dot-com or wireless."

Mike Buryk, business development manager of the IEEE job site, agrees with Germond's assessment of industry requirements. "I anticipated more activity in the defense/aerospace sector several months ago, and company job postings are increasing. We're up [in postings] more than 100% from a year ago," he says.

But it can take up to two years to obtain a security clearance. "This has led companies to cherry-pick people who already have clearances," says Ron Hira, "creating the appearance of higher demand. And since we went through a decade of declining defense spending, many younger engineers aren't aware of the security-clearance process."

WHOSE SIDE ARE YOU ON?
Trade associations are working hard to lobby their members' positions in the rapidly evolving outsourcing issue, and this creates its own problems. The Electronic Industries Alliance (EIA), American Engineering Association (AeA), and Information Technology Association of America (ITAA), which represent industry companies, generally favor outsourcing. But the IEEE-USA, the Washington, D.C.-based lobbying arm of about 235,000 U.S-based IEEE working engineer members, takes a dim view of outsourcing. It has sent a number of proposals to Congress that would stem the rising tide of high-tech jobs going offshore.

The EIA made offshore outsourcing one if its legislative and policy priorities this year. "This is not about replacing American tech jobs with cheap labor in other nations," says EIA president Dave McCurdy. "It is about a host of economic and political factors."

A recent AeA study refers to reports of high-tech job losses in the U.S. as "hysteria," comparable to fears in the 1980s that Japan would eclipse the U.S. as an economic power. The AeA says data on job losses due to outsourcing exaggerates the situation, even while admitting that there's no reliable data on job losses due to outsourcing. (The Bureau of Labor Statistics is developing a new set of surveys called JOLTS, which is supposed to measure job openings and turnover, or churn. However, the BLS reportedly hasn't developed enough data at this point to publish it.)

An ITAA-sponsored study conducted by Global Insight also takes a positive view, predicting that the savings and other benefits realized through offshoring IT software and service jobs will result in the net creation of 317,387 new jobs in the U.S. by 2008.

The IEEE-USA isn't so sanguine. "Industry-sponsored reports such as this tend to confirm what we already know; that offshoring helps the corporate bottom line," says IEEE-USA president John Steadman. "But they invariably fail to address the implications of offshoring on the long-term technological competitiveness and security of the U.S."

"There is little doubt that U.S. companies are reaping short-term benefits from offshoring," adds the IEEE-USA's Ron Hira. "It's not clear, however, whether the U.S. economy—especially at a time of little or no job creation—benefits from it. Positive net benefits depend on re-employing displaced workers in equal or better jobs, which is not occurring right now, despite economists' predictions."

Hira says the ITAA/Global Insight study's conclusions are based on two assumptions that bear close scrutiny. One is that the U.S. economy will benefit through reinvestment of the savings realized by U.S. corporations offshoring IT and software services. He says this assumption ignores the likelihood of many companies investing those savings into their own overseas operations, or diverting any savings into windfalls that benefit only corporate executives and stockholders. The study also assumes the new jobs are essentially equal to those being lost and that replacing offshore positions with other support and service jobs won't affect U.S. ability to maintain a technological edge in an increasingly competitive global economy.