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Thu, Jul 31, 2003 - Page 12 News List

High-tech US firms will outsource one out of ten positions


US high-tech firms will outsource one out of 10 jobs to low-cost emerging markets by the end of next year, according to a report Tuesday by a market research firm.

The report by Gartner Inc indicated that one out of every 10 jobs within US-based IT vendors and service providers will move offshore.

Additionally, one of every 20 high-tech jobs within other companies will also be outsourced, Gartner said.

"To many CIOs and business executives, the decision to outsource activities offshore is fiscally sound -- the cost, quality, value and process advantages are well-proven," said Diane Morello, vice president and research director at Gartner. "Offshore outsourcing is becoming a tool for improving service delivery and a source of highly qualified talent in greater numbers."

Many firms such as airlines, credit card companies and banks have shifted their "back-office" work to places such as India which has the world's second largest pool of English-speaking computer literates after the US.

Gartner said that trend is growing, but that US firms need to be concerned about the impact of outsourcing on the workforce and overall performance.

"CIOs [chief information officers] need to communicate clearly, honestly and respectfully about the transition plan, and about the options available to affected employees," Morello said.

"The way in which enterprises deal with employees during the offshore transition will be lasting testament to the perception of leadership and the reputation of the company as an employer."

The growing moves toward outsourcing have sparked legislative efforts in the US to curb the trend, although India has protested these efforts.

Industry groups estimate the US high-tech workforce at about 10.3 million. Gartner analysts said the increase in outsourcing could lead to an additional 500,000 IT jobs lost from US market in the next 18 months.

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