Large companies are accelerating their use of offshore outsourcing and as many as a quarter of IT jobs at Global 1000 firms may be moved offshore by 2010, according to The Hackett Group, a Miami-based consulting firm whose clients include many multinational firms.
According to its research, these large firms -- companies with revenues of at least US$5 billion -- will move about 350,000 corporate jobs offshore over the next two years. Over half of those jobs will be in IT, with the remainder in finance, human resources and procurement.
Just two months ago some analysts said the credit crisis has failed to boost the outsourcing market.
The data "is a confirmation of a mega-trend" similar to what happened in the manufacturing sector several decades ago, said Michel Janssen, Hackett's chief research officer. And while 25 per cent of the IT jobs may head overseas in the next two years, over the longer term that figure could hit 60 per cent. In some firms, it could reach 80 per cent.
An earlier study that looked at the impact of offshore outsourcing on IT, based on data collected from 10,000 people, estimated that as many 8 per cent of all IT workers have been affected by offshore outsourcing.
The Hackett Group surveyed 200 firms in October, 40 per cent of which have headquarters in the U.S. with a similar per centage in Europe. The IT headcount in each of these companies is about 1,600.
The road to better outsourcing
This big shift in jobs to low-cost offshore locations may be accelerating, in part, because companies are more experienced -- and comfortable -- with offshoring and have developed standardized practices, according to Erik Dorr, Hackett's senior IT research director. The survey was completed in October and he is uncertain how economic conditions influenced responses.
"What is clear, though is they are certainly not slowing (offshoring) as a result of economic crisis," said Dorr. "If anything, they are going to be more aggressive."
More from ITWorld Canada