Is Offshoring Leading to Lower US Salaries?
by Dona DeZube
http://content.salary.monster.com/articles/offshore/
Monster Finance Career Expert
If you're in IT, customer service, accounting or finance, should you worry about offshoring -- the corporate practice of shifting US jobs, and increasingly white-collar jobs, to low-cost, but well-educated, employees in countries such as India?
Not yet, say the experts. The offshoring trend is real, but its influence on American compensation levels is more hype than fact.
"It's definitely something that's happening, but the effect is not as great as people think," says Keith Fortier, CCP, director of compensation for Salary.com. "It's become an issue, because people have perceived that they've lost pay because of offshoring."
Note that Fortier says "perceived" loss of pay. Currently, about 250,000 US jobs have been offshored. That may sound like a lot, until you put the numbers in perspective. There are 145 million jobs in the American economy,
so those 250,000 jobs represent roughly .13 percent of the job market. "Compensation follows the rules of supply and demand. The amount of jobs we're losing doesn't equate, in compensation terms, to anything substantial.
It's diminutive," says Fortier.
A widely circulated report from Forrester Research Inc., published in November 2002, predicts that by 2015 our economy will lose 3 million jobs to offshoring, mostly in labor-intensive functions such as data entry, programming and back-end processing. "If Forrester's projections are accurate, that's roughly 2 percent of the US job market," says Fortier. Even if the offshoring trend continues over the next decade, Fortier suspects that compensation levels for positions in the US won't decrease; if anything, the rate of salary increase might slow somewhat.
What's Going Where?
Technology jobs aren't the only jobs that could end up overseas.
Consulting firm A.T. Kearney predicts US banks, brokerage firms, insurance companies, mutual funds and other financial service firms will move a half-million jobs overseas over the next five years.
Raja Gopalakrishnan, head of US operations for Indian business process outsourcer ICICI OneSource, says Indian companies are selling US companies on outsourcing various finance jobs, including:
Asset Management: Back-office processes, unit record keeping, 401k pension administration and equity research.
Consumer Lending: Credit card transaction processing (billing and collecting) and customer care and telemarketing. Insurance: Policy administration and claims processing.
Retail Banking: Customer care, account opening and customer acquisition Misplaced Angst
Despite the data, some job seekers in technology services, operations and administration are worrying too much about offshoring and not enough about their own skills.
"One very interesting recurring theme that I see is that job seekers have a tendency to see all labor moving to China, India, the Philippines and other low-cost labor communities," says David R. Cape, principal in Clew, LLC., a competitive-intelligence consulting firm. "Their pessimism is seeping into their communications during the job search. And others have thrown in the towel altogether, leaving behind promising careers in technology after long job searches to work in cellular-phone sales or auto-parts retailing to stop the hemorrhaging in their bank accounts."
Plan to Succeed If you're working in a field that's outsourcing jobs offshore, check the
past practices of potential employers and track current company news so you'll know who's considering offshoring your position. And, to make yourself more competitive at home and abroad, complete any certifications or advanced-degree programs your industry values.

Comments on: Backlash - Offshore Outsourcing
http://comment.cio.com/comments/13665.html
Offshoring - Everything I am in total disbelief that no one at the CEO/CIO level can see the endgame here. If you ship all of the call center, programming and engineering jobs overseas, then the very corporations that are doing this will be unable to sell their goods and services in this country because their customers will either be jobless or working at Burger King. When do short-term fixes in corporations to shore up the bottom-line reach a point of diminishing returns? It also seems to be lost on governments that if a person is unemployed and can no longer live in the state or city, then they can't pay taxes. No tax-base, no government.
Then there is the factor of stability in the region. Not much more than a year ago, India and Pakistan were ready to play with their nukes. Can you imagine the disruption to this country (and others) when all of that "cheap" labor is radioactive ash?
Recent Examples: One of the most outrageous examples was the "offshoring" of the new unemployment system in New Mexico. Rather than recruiting unemployed IT guys in America, the sent it to India! Ironic is not a big enough word to describe this.
My eye doctor was waving around a new digital dictation device the other day. He says he just takes out the Compact Flash card, snaps it into a reader on his PC and off goes the dictation file to India. He says it comes back to him in a Word document in less than two hours. And of course, the best part is it's half the cost of using some local worker that gets local eye exams and pays local taxes.
In health care, another trend is digital storage of x-ray and ultrasound studies. It's a big money saver and it improves the delivery of patient care. It also makes it very easy to blast these images over the web to India and China where a doctor will "read" the study for a fraction of a
BMW-driving greedy US doctor that can actually see and touch the patient

Rail enquiries to be offshored to India?
Andy McCue
http://www.silicon.com
http://www.silicon.com/management/careers/0,39024671,39116870,00.htm
A union claims train operators have a "moral obligation" to re-evaluate plans that could see up to 1,700 rail enquiry call centre jobs outsourced to offshore locations such as India.
The Association for Train Operating Companies (ATOC) started the re-tendering process for the rail enquiries service earlier this year and said it expects to announce the winning bids in early December.
The current service is run by BT, Serco, First Information and ClientLogic with 1,700 staff in call centres in Newcastle, Plymouth, Derby and Cardiff. But union Amicus claims ATOC is proactively pushing for the work to be done in cheaper offshore call centres.
Lee Whitehill, spokesman for Amicus, told silicon.com that representatives of ATOC have already been out to India to examine possible call centre locations and the quality of service, and that some rail enquiries are already being fielded by offshore workers.
"The British taxpayer subsidises ATOC to provide the rail enquiry service and what are they getting in return - 1,700 redundancies? We want to see exactly what the costs are and how many jobs will be lost," he said. Whitehill said a call to rail enquiries at the weekend was answered by someone who was unable to give specific journey details and admitted to being based outside the UK.
A spokesman for ATOC said only 10 operators out of a total of 1,700 were currently based offshore, handling less than one per cent of rail enquiry calls. He also denied Amicus claims that train operators had set an offshore agenda for the rail enquiries service.
"Where the call centres are is a matter for the suppliers," he said. "The big three facts for us are quality of information, accuracy of information and value for money. Where the suppliers want to base the call centres is up to them."
Whitehill accused ATOC of being "disingenuous" by passing responsibility for where call centres are based to the suppliers. "It doesn't sound like the act of an organisation merely twisting in the wind in terms of what its suppliers want," he said.