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A Current Look at Corporate Outsourcing: Increase Your Chances of Not Becoming a Victim
Dr. Greg Ketchum, KRON, 7/16/07
We’ve heard a lot about outsourcing and off-shoring over the last few years. How big an issue is this?
Outsourcing, and it’s international component “off-shoring,” have been part of the modern workplace really since the rise of the global economy. Outsourcing is sending jobs that were formerly done in-house out to other companies. Off-shoring is sending those jobs overseas.
It’s not clear how many service jobs can be shipped overseas, but estimates by research organizations and economists of the number of service jobs potentially at risk “range widely from a few million to more than 40 million, which is about a third of total employment in services.” NY Times, July 5, 2007.
Let’s look at one other statistic to get a sense of the trend in outsourcing. For example, in India, IBM currently has 53,000 employees and this is up from 3,000 in 2002. Salaries for computer programmers in India are still about one third of those in the US, so you can see why this is a smart move for any company.
Those are pretty gloomy numbers. Are all jobs equally vulnerable to being sent overseas?
No, they’re not. Employers are finding that there is a limit to the number of skilled jobs that can be sent overseas. Economists at MIT & Harvard looked at factors that make one job relatively “safe” from outsourcing or elimination through productivity gains and another “vulnerable.” They found…
- Key Factor: A job that is “routine” enough that it can be broken down into repeatable steps with little variation is a “vulnerable” job. For example, computer programming can be described in “math based rules” that are easy to send over the internet.
- By Contrast: The “safer” jobs are the ones that are hard to reduce to a repeatable routine. These jobs require flexibility, creativity, business knowledge, and lots of interaction with other people.
What does this mean for our viewers? How can they increase their chances of not having their job outsourced?
Let’s look at on old analogy. Remember, the idea of the “corporate ladder” and how everyone was expected to climb that ladder to ever-higher levels of responsibility and success? Well, that ladder is kind of broken now, but we can take that same idea to describe what people need to do today: keep climbing up the ladder in building your levels of expertise and experience that enable you to do more complicated and custom work rather than work that can be reduced to a routine.
Do you have any specific recommendations for our viewers?
- Look for Jobs With These Two Factors: The job that can’t be broken down into repeatable steps and/or requires specialized expertise or a lot of human interaction, i.e. management, teaching, sales, human resources, etc.
- Keep Climbing the Skills Ladder: Develop specialized expertise that can’t be reduced to a simple formula. Improve your communication, business, industry, and strategy skills. Your ability to “see the big picture” at work and understand how business works will allow you to see new opportunities for business and be able to personally add to the bottom line.
To keep up in today’s global workplace you’ve got to stay just one step ahead. Your security is in your hands.
®2007 All rights reserved. Gregory
A. Ketchum, Ph.D.