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Category: Money

Offshoring: Creating a Jobless Recovery

Written on December 16, 2010 by Japhet Writ

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Business functions, such as IT and finance, at European and US companies will continue to be offshored to low-cost locations as the practice matures. Hence, it will be on the road to create new jobs in the future.

IT and Finance business in Europe and US will be offshored continuously to low-cost locations as the practice matures. According to Hacket Group, 1.1 million jobs, including IT and finance, have been offshored since 2008. More over, another 1.3 million will go the same way by 2014. And while IT is now leveling off, finance is accelerating.

Hacket Group pointed out that almost 700,000 jobs in finance, IT, and other areas were lost in 2009 due to a combination of offshoring, productivity improvements and lack of economic growth. As said by Honorio Padron, global business service practice leader for Hacket Group, companies have become much more mature in using their resources.

“They began with shared service centres nearly a decade ago, taking basic transactional areas offshore on a one-off basis. But today we’re seeing the rapid ascendance of comprehensive cross-functional global business services operations that are moving far beyond transactional work, to handle the lion’s share of the support function for many companies. The result is a globalisation trend from which there’s simply no turning back.”

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