Most offshoring procurement doesn't mean job cuts

13 December 2006
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13 December 2006 | Paul Snell

Offshoring procurement does not mean job losses at home in most cases, according to a new study.

Research by Duke University and Booz Allen Hamilton has found that the "more important" the job function, the less likely it is that home-country jobs will be affected. In nearly 60 per cent of cases studied in The globalisation of white-collar work, the offshoring of procurement roles did not result in job losses at home. It also found that offshoring is now less about employing cheap low-skilled labour and more about accessing people with different skills. "No longer is offshoring all about moving jobs elsewhere," it says. "Increasingly it's about sourcing talent globally."

The importance of reaching a wider pool of talent has also risen sharply. It increased around 75 per cent in the past two years and is now the second most important motivation for companies that offshore. Cost reduction remained the largest incentive and actually grew in importance for companies in 2006. Increased speed to market was another factor that saw a big rise in importance, increasing 70 per cent compared with last year.

"What used to be a tactical labour cost-saving exercise is now a strategic imperative of competing for talent globally," the survey says. "A looming shortage of trained talent will require the ability to source and manage such talent globally."

SMdec2006

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