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The Movement Of Professional Jobs To India And China

1989 words - 8 pages

The movement of professional jobs to India and ChinaSince many years ago, highly labor-intensive jobs, such as manufacturing, have started moving to developing countries, like India and China, from developed countries, such as U.S. UK, and Japan. This did cause some problems but not strike at the heart of the United States, since they believed that white-collar jobs would take blue-collar jobs. However, the recent movement of professional jobs across many industries and countries to overseas seems to be causing more worries than ever. As a matter of fact, it is not as scary as many governors think. There are both advantages and disadvantages for companies to outsource. Also the advantages will weigh over the disadvantages when outsourcers manage some relative problems properly.Unstoppable Overseas OutsourcingOver time outsourcing started with blue-collar jobs such as manufacturing. Recently it has shifted more towards white-collar jobs, like back-office work, call centers, IT, software programming, and financial analysis, This movement is made possible by advances in communication and driven by increasing global competition. It provides productive and financial efficiency to the companies. Overseas outsourcing is not restricted to the United State. Many other developed countries are experiencing this situation. Also, the trend has gone beyond large companies. In general, the movement of high-end jobs outsourced offshore will accelerate.Attractiveness of outsourcing or offshoring to India and ChinaThe following are factors that contribute to the desirability of moving professional jobs to India and China:Low costAs everybody knows, the wage of the workforce in India and China is low. Indian engineers or financial analysts usually earn much less of the amount than that their counterparts do in America. For example, according to figures from the international Labor Organization and the Paras Group: while a software engineer in the USA makes an average of $66,100 a year, in India she or he makes $1,000 per year; mechanical engineer $55,600, India $5,900; IT managers $55,000, India $8,500; Accountants $41,000, India $5,000. (www.commondreams.org/cgi-bin). Similar to the Indian workforce, the Chinese workforce has about similar low wage level. Since all corporations are pursuing low cost and high return on investment, it makes economic sense to produce products or provide services where the labor cost is lower.In addition to cheap labor, the rent for office space is also low. In the call center's case, average annual rent of $100,000 for a 100-seat office in India is 20 percent of the rent for a similar office in Singapore. Accordingly demand for office space will grow six percent in Mumbai and Delhi, eight percent in Beijing, and 10 percent in Shanghai in next five years.The availability of a highly motivated workforceBusiness process outsourcing is not just about cutting costs. The quality of the labor pool willing to work in certain areas, for...

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