It may not be Ross Perot’s “giant sucking sound” you’re hearing, but according to business advisory firm the Hackett Group, as many as 750,000 finance, treasury, IT and other business services jobs could be offshored between now and 2016, continuing a trend that has already seen close to 1.5 million such jobs moved offshore by companies in the U.S. and Europe.
Hackett, which surveyed some 4,700 U.S. and European companies with more than $1 billion in revenue, claims companies that implement what it refers to as a global business services operating model, which includes shifting jobs to low-wage areas like India or Eastern Europe where appropriate, can achieve cost savings of about 29%.
These offshoring moves are limited when it comes to core competencies like deciding how to invest the company’s cash, jobs that require proximity to the company or senior managers, or jobs that require “context,” Janssen says.
Even with those restrictions, he says, the skill level of jobs being offshored has been rising. “A few years ago, it was hard to find good people abroad, but now at the bottom and middle part of the food chain, there’s just about nothing that you can do at home that you can’t do in India or Eastern Europe,” Janssen says.