Monday, March 15, 2004

White Collar Jobs Become Hot Target for Outsourcing

Largely due to outsourcing, a college graduate in a Third World country need not go elsewhere to look for that proverbial greener pasture.

In fact, even those with MAs or Ph.Ds need not to. The past year saw the start of a growing trend which saw Western companies outsourcing high-value knowledge jobs to countries like India and China at lower cost.

According to a McKinsey report, at least 600,000 white-collar jobs from the US, Europe and Japan will probably be outsourced to countries like India, China or Malaysia.

Initially, low-value routine work like software encoding or call center work, otherwise referred to as “non-core processes”, was farmed out to Third World countries.

But as early as last year, a Businessweek report already noted lucrative careers for engineers, financial analysts and even architects – filled up by people outside of the US.

In the financial sector, for example, a recent New York Times article made quite revelation in noting that accounting firms in the US are outsourcing tax returns to India.

According to the article, even prominent auditing firms like Ernst and Young have set up branches in India that serve as back-end help.

It is, however, not an entirely new thing. Procter and Gamble, for example, has an office in the Philippines which process tax returns for the entire company.

But the use of a third-party to accomplish the same task carries with it issues, mainly security. Because tax returns contain sensitive information about the taxpayer, issues pertaining to security arise.

This goes to show why, according to the article, some accounting firms are hesitant in telling their clients about people from thousands of miles away poring through their tax details.

India and the Philippines represent a ready pool of talents given the large number of graduates produced annually in these countries.

The best thing about it is that there are more of them in other countries as well waiting to be hired.