Study: Higher-Skills Jobs to Move Offshore

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Based on the wildly disparate numbers offered in a couple surveys released earlier this year, it's hard to know how many U.S. companies send work offshore.


Just 6 percent of respondents to a Robert Half Technology survey said their companies offshored at least some tasks. This number struck many industry observers as awfully low, with some folks suggesting that folks may not have accounted for the offshore activities of multi-national service providers like IBM, EDS and Accenture.


More than 40 percent of the respondents in two other surveys, conducted by CIO Insight and BDO Seidman LLP, said their companies were involved in offshoring. The latter survey, in which 49 percent of respondents mentioned offshoring, focused on the tech sector, which traditionally makes heavy use of offshore labor.


A new survey from CareerBuilder.com and the Wharton School of the University of Pennsylvania offers a number somewhere in the middle of the others, with 13 percent of respondents saying their companies outsourced to third-party vendors outside the U.S. in 2007 and 7.5 percent saying they weren't sure. Four percent of these respondents said their companies planned to step up offshoring in 2008. Seven percent said offshoring would be maintained at the same levels, and 13 percent weren't sure.


The statistic that is getting the most media attention is the 28 percent of companies that say they are sending an increasing number of high-wage, high-skills jobs overseas. Sixty-nine percent of respondents say these types of jobs are at equal or greater risk of being offshored than low-skill jobs.


Leading the list of high-skills jobs companies plan to offshore: computer programmers and software developers (each mentioned by 32 percent), customer service (25 percent), system analysts (16 percent), sales managers and graphics designers (8 percent each).


Among the industries reporting the highest rates of offshoring: technology services, telecommunications, insurance, manufacturing, engineering and banking/finance.


In a more positive slant, 28 percent of the surveyed companies said offshoring had allowed them to create new and better types of jobs in the U.S. According to a Wharton School participant in the study, job displacement related to offshoring accounts for a "relatively small proportion" of annual U.S. job turnover.


It's easy to see why companies offshore, based on the cost savings many of them say they achieve. Saving money remains the top motivator for offshoring, say 64 percent of respondents. Offshoring IT yields annual savings of $20,000 per head for most companies, with savings rising to $50,000 for 15 percent of employers.


Other top reasons for offshoring: gaining access to needed skills (27 percent) and plans for market expansion (19 percent). Companies expanding their market presence were more inclined to send sales and support positions offshore, according to researchers.