Study: Outsourcing not a threat to jobs

Currently, only one in 24 of all call center agents that deal with U.S. customers are offshored--a figure which is set to shoot up in the next five years as cash-hungry execs try to trim budgets even further.

Despite the fact that labor costs can be reduced up to 75-85 per cent by outsourcing, the Datamonitor report, The Vertical Guide to U.S. Customer Relationship Outsourcing, says that the outsourcing explosion isn't necessarily a major threat to U.S. jobs.

While the market in the United States only grew around two per cent last year and some jobs have already been lost as a result of offshoring, the future for the domestic industry should be safeguarded by growth in other areas, including government and utilities.

The outsourcing market, in contrast, will enjoy a boom--with its total value rocketing from $19 billion to $24 billion in the next five years. Daniel Hong, CRM analyst at Datamonitor, believes that despite a degree of uncertainty over quality, more and more CEOs are turning to offshoring.

"Although there are geopolitical uncertainties and quality concerns over labor and management, US outsourcers are determining that the benefits outweigh the risks," he said in a statement.

As well as keeping one eye on the budgets, one of the main reasons why bosses are suddenly making offshoring part of their strategies is that, after biding their time to see how the trend would turn out, they're now witnessing other companies enjoy the fruits of outsourcing to other countries, among them American Express and Merrill Lynch.

In the U.K., it's the financial services companies that have been leading the way, with deals from major banks, including Abbey, Barclays, HSBC and LloydsTSB, choosing to outsource work. However, firms are now starting to wise up to the political implications of outsourcing--BT recently announced that should any work be outsourced, there will be no job losses as a result.