New Survey on Outsourcing: Don't Worry, Be Happy

Job losses in the US due to outsourcing of financial services and technology work to low cost destinations like India will be offset by new employment opportunities in emerging sectors of the American economy, says a survey conducted by leading London-based research firm Datamonitor. The report says customer relationship services will continue to be outsourced by US firms to cut costs, but its impact on the US labour market will be limited.

The survey seeks to allay fears of increased job losses due to a rush among companies to outsource back-office jobs to low-cost overseas destinations like India, China and the Philippines.

Currently, communications, financial services and technology account for over 65 per cent of the total number of outsourced agent positions in the US.

More than a quarter of Fortune 500 companies like General Electric, American Express, British Airways, HSBC and Citibank are shifting their back office operations to India.

According to Datamonitor, currently one out of every 24 callcentre agents serving US customers is outsourced to a "near outsourcing centre" in Canada and Mexico or an "offshore centre" in India or the Philippines.

It predicts that by 2008, one in 15 agent positions will be outsourced to a foreign market.

"The incessant pressures to cut costs and reduce capital outlay have triggered the offshore and near-shore exodus in the US customer relationship outsourcing industry," said the study.

Source.