It Workers Hit Hardest By Offshore Outsourcing, Survey Finds

Based on the data collected from a sample of 10,000 people, the article finds that 8% of IT workers have been displaced by offshore outsourcing which is twice the rate of workers in other occupations.

The researchers at Stern and Wharton Business Schools found that because IT jobs are purely technical jobs involving little or no customer interaction they are the most at risk from outsourcing. The base rate of offshoring across all industries is just over 15%, but some 40% of all tech and telecommunications companies are doing some type of offshore work, according to the research by Dr. Prasanna Tambe, an assistant professor at Stern Business School.

By occupation, more than 30% of the survey respondents said they were offshoring software programming and development jobs, but only about half, or 15.5%, reported offshoring systems analysts, who typically interact more with others in a business. Of those displaced by offshore outsourcing, 70% lost their jobs, with older workers more likely to be displaced. The researchers did not predict what future displacement rates might be, but claim that as offshoring grows, tech workers without jobs that don’t require interpersonal skills are being replaced more rapidly.

IT workers worried about displacement must develop interpersonal skills and find IT careers that involve face to face interactions. Since IT workers have been more severely affected than other types of workers, Tambe argues that policy-makers could focus on tech workers to provide help, including job training and government compensation to offset wage losses. Educational institutions will have to react as well, with “increased emphasis on the development of interpersonal and management skills within the IT curriculum.”

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