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Offshoring threat to jobs "exaggerated"
Mon, Jul 09, 2007
Reuters

LONDON, July 9 (Reuters) - Widespread claims that large numbers of white-collar jobs are being lost through outsourcing to India and other developing countries are overstated and misleading, a report says.

According to research by the Work Foundation, the organisation formerly known as the Industrial Society, there is little direct evidence so far of significant job migration.

It says debate on the subject has an unwarranted alarmist tone that is not justified by the data.

Ian Brinkley, the Foundation's chief economist, said that although UK companies had been offshoring to India and elsewhere for several years, there was no visible impact on employment levels.

"Concern over offshoring has become a surrogate for wider issues about economic insecurity," he told Reuters.

"There is something about exporting jobs to foreigners that does press all the wrong buttons. Fears have been stoked by claims that the Chinese and Indians are coming to get your lunch, but the reality is that it is not happening."

He highlighted figures from the European Restructuring Monitor, which recorded 420 restructuring cases in Europe. These cases announced 132,762 job losses but 184,511 job gains.

The analysis shows that just 5.5 percent of all jobs lost across Europe were due to offshoring activities in the first quarter of 2007, he said.

In 2005 the figure was 3.4 percent and, meanwhile, jobs in sectors theoretically vulnerable to outsourcing such as call centres have gone up rather than down in the UK, Brinkley added.

"Self-serving claims from consultancies and aggressive PR from outsourcing companies themselves has tended to drown out the careful analysis of data regarding off-shoring," he said.

"If all you'd done was read the headlines in 2003, you'd have thought a disaster was unfolding as bank after bank offshored its call centres and other work.

"Quite a few have now brought them back and adverts even stress the fact that they have UK call centres.

He added: "What once looked like an unstoppable tide is now nothing like as bad as people thought. Increasingly companies are starting to realise that the big headline numbers for cost savings can distract people from the issues involved in managing operations thousands of miles away."

The Work Foundation is a not-for-profit organisation that brings all sides of working organisations together to find the best ways of improving both economic performance and quality of working life.

REUTERS

 

 
 
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