Businesses across the world have been using outsourcing as a strategy to reduce costs, streamline workforces and improve quality. On the whole, this strategy has been effective and has resulted in management teams across all industries turning to outsourcing more frequently.

Now, if businesses outsource to UK based suppliers then jobs remain onshore, graduates have a chance to learn the vital basics and the UK moves into the future happy in the knowledge that it has a well skilled workforce. The problem is, many of the biggest businesses are not using UK suppliers, instead they are opting to offshore, leaving the UK with a growing skills gap. In fact it is safe to say that the gap is quickly becoming a void.

Over the past few months there have been a host of businesses receiving less than favorable reports about their offshoring practices. Most recently, Lloyds Banking Group has been under fire from the media as a result of a Daily Mail report that said Indian IT contractors were being brought into the UK to work in place of UK counterparts. The article was supplemented with internal documents that revealed the concerns Lloyds managers have about knowledge gaps within their IT department, hence they were possibly looking to their Indian partners to provide them with the necessary skilled workers.

What this means for Lloyds is that they lack the necessary skills to do basic IT processes without calling in the offshore cavalry. This is worrying; a large financial organisation should have the capacity and the business sense to keep a retained team of workers on-shore. It is probable that Lloyds became a little too focused on cost cutting and rapid ROI whilst losing sight of the future security of their organisation.

Mass offshoring is not just having an effect on the capabilities of UK businesses, it is also having a distinct effect on those yet to begin their business life, the graduates. Firms excessively offshoring work and not investing in their own staff has resulted in fewer graduate opportunities and in turn means that mid level IT specialists are becoming a rarer breed. Graduates need on-the-job training in order to become tomorrow’s IT specialists. Who will train future developers, networkers and IT managers if there is no one left in the country with the foundation skills?

Martyn Hart, Chairman of the National Outsourcing Association, commented, “As India and various other destinations enjoy a wealth of low level IT work, IT specialists in these countries will arguably have had better experience and training than their UK counterparts. In turn, those IT workers that have climbed the career ladder in key offshore destinations would have had such a breadth of experience that they may be better placed to manage the IT teams of the future.” So, where does this leave the UK?

Of course offshoring is understandable if not vital within a global economy. However, retained knowledge and balance are just as essential as offshoring. Companies must realise that they need to have an even spread between on-shore work and offshore. Their Indian suppliers will not tell them to keep work at home, that is for sure. So management teams need to wisen-up and be aware of the risks involved with overzealous offshoring.

Mr Hart points out the risks involved with handing over IT to an offshore supplier, “By not retaining enough good quality in-house IT expertise, businesses are at risk. They will no longer have the capability to design and run applications or IT systems themselves and will have no choice but to rely upon their offshore service providers. This would leave them in a very vulnerable position; suppliers could essentially charge what they wanted for applications and systems and they would lose their competitive edge because they would have to rely upon the same ‘off the shelf’ package as their competitors.”

So what are companies going to do? Well one area that is worth exploring is sending an in-house graduate team offshore for a period of time to learn the trade. The offshore suppliers will be best placed to train them because they have been fulfilling the work already, the graduates get the experience they need and supplier relations will be significantly improved. After the team’s tenure at the supplier’s base, they can return back in-house and bring their new found skills and knowledge with them.

The fact is that excessive offshoring is contributing to the UK’s ever increasing skills gap. If companies want to be best placed to ensure that they are prepared for future challenges, then they need to have the skills and knowledge in-house. Having a good mix of outsourced and in-house expertise is paramount if businesses don’t want to find themselves at the mercy of a supplier’s sales team.

Graduates need nurturing. It wont just be the likes of Lloyds quaking in their boots as they stare at their empty IT department, all businesses may find themselves at a distinct disadvantage unless UK organisations start taking the time to invest in the future of this country’s talent pool.