Wednesday, December 22, 2004

A new market for Offshore Outsourcing??

According to a report by Forrester Research more than one million jobs in Europe will move offshore by 2015. The report mentions that as European firms - especially in the UK - ramp up their spending with offshore service providers in countries like India, they will increasingly displace substantial numbers of employees from their current roles. Following the UK will be Germany, France, the Netherlands and Italy. Countries such as Ireland, Greece and Portugal face far lower employment impacts from the trend since companies in these countries show a far lower tendency to adopt offshore outsourcing as a budget option. Also, in many respects such countries act as low-cost IT and service locations in their own right. he trend to migrate jobs to lower-cost locations such as India and Russia will be motivated by a number of factors, says Parker. First, there is a strong emerging skills base in low-wage countries. Russia, for example, has 40% more scientists per head than the UK, France or Germany. Offshoring is much cheaper. The annual salary of a systems architect in the UK currently stands at about ˆ130,000 per annum, while a comparable systems architect in India commands just ˆ40,000.