Is offshoring facing a C-19 delivery crisis? And will this cause a Covid jobs bump for Australia?

The 7.30 Report on the ABC on Tuesday night, touched upon a theme that we’ve been hearing about from candidates in the last month – problems with offshoring. The team at Balance have heard stories from candidates at CBA and Nokia about issues with the Indian offshoring sector related to their lock down and requirement to work from home. Specifically we’ve heard of a lack of ability to deliver at expected levels. 

Computer Weekly has also just published an article on this subject and quotes Barry Matthews from outsourcing advisors ISG. He says that both Indian BPO and IT services are at risk because suppliers have not planned for this situation. He claims “it will be almost impossible for either to maintain current services levels”.

With vast numbers of IT jobs off-shored to India in recent decades, the Covid pandemic may be posing a material threat to the ability of off-shored workers to deliver outcomes for businesses across the globe. And with most key offshoring destinations in Asia, Sth America and Eastern Europe looking particularly prone to the effects of C-19, I believe this creates a unique opportunity for Australian.

There are 4 reasons I believe we are almost uniquely placed to take advantage of this situation.

1. Australia, Taiwan, South Korean and NZ seem to be the leading countries heading towards containment of C-19. If an organisation believes there may be a risk in delivering essential IT services from their current location, they are likely to look for a safe haven where the services can be delivered with minimal risk. It’s unlikely they will send jobs to USA or Europe, their risk profiles are too high. Taiwan and South Korea are not traditional offshoring locations for a number of reasons including lack of English language skills. That leaves Australia and New Zealand in an attractive position.
2. The Australian dollar that has lost 20% against the USD over the last 2 years. And with recent job losses we may also see a drop in the rates for project related IT roles in the near term. Not only are we a safe haven but we’re increasingly financially competitive.
3. Technology Infrastructure. No it’s not perfect but the nation’s networks have largely taken the strain of a rapid shift from office to home work (if you disagree please send all correspondence to [email protected]). Compared to the anecdotal reports from offshoring locations, the maturity of our infrastructure is a huge advantage for Australia, showing we could work productively through a potential 2nd or 3rd wave.
4. We have a highly skilled workforce who are adept at collaborating with geo-diverse teams in large scale organisations. And lots of these individuals have recently lost their jobs. Job ads for IT roles have decreased 60% in 6 weeks. We have people, they’re good and they’re available.

So could we cope with a possible influx of new tech roles? On the one hand there have been huge numbers of job losses in the tech sector in Australia with the majority in the project space. The BAU space has been spared the worst of these changes, however I still believe there is sufficient availability in the market to deal with a moderate increase in BAU demand and a sizable increase in project demand. Beyond that it will be interesting as traditionally we’ve countered any shortages with skilled immigration programs, but with our borders closed, that avenue is firmly shut.

So what options would that leave us with? The key difference I’ve noted between Australian tech workers profiles and that of overseas tech workers is Australians tend to spend longer learning their craft. Individuals are kept in roles far longer here before they take the next step on the career ladder. I think this luxury might disappear quickly.

My feeling is this will not be a bump of game changing proportions, but it will still be evident and if you want to recruit successfully, especially in the BAU space, the time to move is now.

So I’m predicting The Covid Bump. I don’t know the size of this bump however it hinges on the continued success of Australia containing the virus compared to the rest of the world. 

So what can you and I do to make this Bump a reality? We need to make sure the world knows how well we are doing, so jump on the phone, send someone a message or send them this newsletter.

Together, we can tell this great story to the world.