More Firms Are Offshoring High-Wage, High-Skill Jobs
KANSAS CITY (PRNewswire), April 28, 2008 - An economy plagued by uncertainty is refueling debates over the impact of offshoring U.S. jobs. Which jobs are at risk? Are more companies planning to displace American workers? And what are the short-term and long-term effects of sending jobs overseas on the growth and stability of the U.S. job market?
CareerBuilder.com and researchers at the Wharton School of the University of Pennsylvania released new research today titled, "Jobs Beyond Borders," based on a survey of more than 3,000 hiring managers and HR professionals and more than 6,700 workers across the U.S. The results of this study as well as related research are available as a series of working papers.
Amount of Jobs Being Offshored
Thirteen percent of employers said their companies outsourced work to third party vendors outside the country in 2007. The same amount said they would do so in 2008. Seven percent of employers offshored job functions to foreign affiliates in 2007; 9 percent plan to do so in 2008. Plans to offshore to third party vendors in 2008 are more prevalent in the Northeast and West at 15 percent compared to 12 percent in the South and 10 percent in the Midwest.
Looking forward, among employers who offshore, 44 percent estimate less than 5 percent of their jobs will ultimately be sent overseas while 39 percent project more than 10 percent of their jobs will eventually be offshored.
"We're seeing a systematic pattern in the types of positions that are vulnerable to offshoring," said Lorin Hitt, Associate Professor of Operations and Information Management at the Wharton School. "The study indicates that services that can be delivered electronically and don't require much face-to-face interaction are now at higher risk of being displaced."
High-Skill Jobs Also at Risk
According to respondents who offshore, more firms are offshoring high-wage, high-skill jobs that were once thought to be immune to global competition. Twenty-eight percent of these employers reported more high-skill services positions are being sent overseas to third parties or foreign affiliates in need of management, technology and sales and marketing know-how. The majority of employers who offshore (69 percent) believe high-skill services positions are at equal or more risk of being offshored than low-skill jobs. Examples of jobs companies plan to offshore:
-- Computer programmers - 32 percent
-- Software developers - 32 percent
-- Customer service - 25 percent
-- Systems analysts - 16 percent
-- Sales managers - 8 percent
-- Graphic designers - 8 percent
-- HR personnel - 7 percent
-- General managers - 6 percent
-- Marketing personnel - 5 percent
Among industries, technology services, telecommunications, insurance, manufacturing, engineering, banking & finance, oil, travel, utilities and communications all reported higher rates for offshoring.
Impact on the U.S. Job Market and Workers
The study indicates, of all the respondents, older workers were more susceptible to being displaced than younger workers.
Of all workers who reported being displaced by offshoring, one-in-five (21 percent) said they were reassigned within the company. Seventy-one percent were let go. Of those who were reassigned, 76 percent reported it was a lateral move while 7 percent reported they benefited from either a promotion, higher compensation or both. Of those who left the company, 81 percent went to another employer that was not aggressively offshoring.
While U.S. workers have lost jobs as a result of offshoring, companies are making the argument that offshoring is ultimately benefiting the American workforce. Twenty-eight percent of employers who offshored jobs said offshoring has already enabled them to create new, better jobs of different types in the U.S.
Cost-Savings and Other Reasons for Offshoring
Cost-savings is the primary motivator for offshoring, according to 64 percent of respondents. Looking at information technology specifically, nearly half (49 percent) say they save over $20,000 per head on average by offshoring. Fifteen percent of employers say they are saving more than $50,000 per head.
Twenty-seven percent of respondents cited availability of skills and 19 percent pointed to plans for expansion in a particular market as their main reasons for offshoring.
Popular Spots for Offshoring
Offshoring companies are predominantly drawn to South Asia with 44 percent of employers who offshore stating they sent jobs to India. Others key locations include China (24 percent), Mexico (12 percent), Canada (9 percent), Germany (8 percent), the Philippines (7 percent) and the U.K. (7 percent).
Reasons for Not Offshoring
When respondents who don't offshore were asked why their companies chose not to, one-in-five (21 percent) said they felt it is important to keep jobs in the U.S. Fourteen percent reported their customers would not respond favorably and 10 percent said they work with sensitive data. Difficulty to build trust across borders, the cost associated with monitoring workers and shipping/materials, and the availability of a skilled labor pool abroad were also cited.
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How to Effectively Rebound
from Being Let Go
KANSAS CITY (PRNewswire), April 28, 2008 - Following a year where 1.3 million jobs were added to payrolls in the United States, 2008 has started off on a much weaker note, with the Bureau of Labor Statistics reporting 80,000 job losses in the month of March for an estimated total of 232,000 job losses in the first quarter of the year.
Key industries such as financial services, construction and manufacturing, which have been hit hard by the recent subprime mortgage and credit crises, continue to make global headlines by announcing layoffs, indicating that job security isn't as secure as its been in recent years. Being laid off can be a traumatic and stressful experience, but Lee Hecht Harrison counsels displaced workers everyday on how to go from out of work to identifying their next career opportunity quickly and effectively.
Having helped thousands of individuals get their careers back on track after a restructuring event, Lee Hecht Harrison has the following advice:
- Don't panic. Often the first reaction to a pink slip is to go into a
state of alarm and emotional distress, which can lead to quick, non-
strategic decisions or even missteps. Let the news set in and take the
first few days to gather your thoughts and develop a plan. You should
approach your job search like you would a project at work, with plans,
timelines, targets and deliverables clearly mapped out.
- Refine your resume. There are three common mistakes people make with
their resumes: too long, too wordy and unfocused. A resume should
indicate who you are as a professional, what skills you possess and
most importantly how you would add value to a company. And, it should
utilize achievement statements to demonstrate how you have helped
previous employers achieve their goals.
- Network, network, network. It's times like these that your
professional and personal network can be the most helpful. Get out
there and let people know you're looking for a new job, because your
neighbor, a former classmate or colleague could be the reference you
need or could know the person who will ultimately help you land your
next career gig. In fact, networking today is easier than ever with
social networking sites -- both personal and professional -- that you
can use to update people on where you are and what types of
opportunities you are seeking.
- Be open-minded. As you pursue a new opportunity don't just limit
yourself to one industry or functional area. Think about your
transferable skill set and where else you could apply your experiences.
This open-minded thinking helps you to expand your options. Also,
while looking for permanent work, think about pursuing a temporary or
project assignment in the interim. Temporary and part-time positions
often serve as paid auditions for permanent, full-time opportunities.
- Look and research before you leap. Before jumping into your next job
be sure to do your homework on the company and industry. Is this the
right cultural fit? Does the company/industry seem stable enough to
withstand the economic slowdown? Does your background enable you to get
the job done successfully? Putting this level of thought and
consideration into the equation will help to ensure you're not looking
for another job anytime in the near future.
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Job Seekers Prefer Green Workplace
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