Thinking Twice Before Outsourcing Jobs Overseas

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Outsourcing is a major concern for many IT professionals, particularly entry-level workers, whose jobs are threatened by the growing cost-saving trend. But there is a ray of hope. Recent research from the University of Michigan Business School and eePulse Inc. suggests that most of the work is at least staying within U.S. borders, despite some 74 percent of 561 study respondents stating that they were either already outsourcing jobs in 2004 or planning to do so during the year.

According to the respondents who are outsourcing, programming, service, administrative and manufacturing jobs are currently a hot target for efforts. A hefty 94 percent of those surveyed said that 1 percent to 25 percent of their jobs are being outsourced overseas. Participants indicated that leaders must consider cost structure, cost-efficiency, time analysis, material and labor costs when considering outsourcing. Quality, transportation overhead and legal costs for background checks, etc., are also factors.

 

Of the 6 percent of respondents who said that 26 percent or more of the outsourced jobs were being given to companies other than their own, participants indicated that leaders should support their own country and use overseas outsourcing as little as possible. But if they do, countries like India, China, Mexico and Canada get the work.

 

“The results of the Leadership Pulse study indicate that leaders are learning quite a bit from their outsourcing experiences,” said Dr. Theresa Welbourne of the University of Michigan Business School and eePulse Inc. “The comments about keeping work in the home country may be a function of outsourcing efforts that aren’t going as smoothly as anticipated, or it may be in response to the ongoing discussions about job loss. In today’s global business environment, outsourcing is a phenomenon that is certainly here to stay; however, it’s important that we all learn from each other and then do outsourcing in the most effective ways at the right time and with the right types of jobs.”

 

For more information, visit http://www.umbs.leadership.eepulse.com.

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