Talent Management - July 2008 - (Page 53)

programmers, software developers and systems analysts. But sales managers, graphic designers, marketers and HR managers also were cited as offshoring candidates. Exporting labor can have considerable impact on employee perception and morale, so talent managers should proactively communicate organization and workforce beneﬁts from overseas endeavors. Of workers who reported being displaced by offshoring in the survey, 71 percent were let go. Some 21 percent said they were reassigned within the company. Of those who were reassigned, 7 percent reported either a promotion, higher compensation or both. Motivators for Offshoring: Cost and Talent Advantage When asked about the primary motivator for offshoring, cost-savings ranked highest for 64 percent of employers surveyed. Looking at information technology speciﬁcally, 49 percent said they save more than $20,000 per head on average. Fifteen percent of employers said they save more than $50,000 per head. However, those savings may not be as prominent as in past years, as wage inﬂation persists in targeted countries. Companies that offshore are predominantly drawn to South Asia, with 44 percent of employers stating they send jobs to India’s free-market economy. The cost advantage for offshoring to India used to be at least 1:6. Today, it is at about 1:3, according to Forbes. Wages are forecasted to grow more than 14 percent in India in 2008, the ﬁfth consecutive year of double-digit growth. While companies continue to monitor cost-saving advantages, they also factor in comparisons when making decisions to offshore, such as the amount of untapped talent in a given area. Some 27 percent of respondents cited availability of skills in a particular market as the main reason for offshoring. Forty percent of employers in the U.S. reported they currently have positions for which they can’t ﬁnd qualiﬁed candidates. The number of college graduates in key areas such as IT and engineering is falling behind the talent demand in the U.S., and companies are searching for labor pools outside the country to make up the differential. According to a study released by Duke University in 2007, China quickly is outpacing the United States and India in producing graduates with advanced engineering and technology degrees. While some analysts warn against quoting the gross number of engineers graduating each year due to the different quality of degrees in respective countries, Thomas Friedman points out in The World is Flat that China and India have greater populations with a much higher percentage studying computer science and engineering at home and abroad. In addition to producing a larger volume of graduates, more workers elect to stay within their countries. According to Evalueserve, a global research ﬁrm, 65 percent from the Indian Institutes of Technology remained in India between 1964 and 2001, rather than pursuing employment in the U.S. and other countries. That number rose to 84 percent between 2002 and 2008. Gartner predicts India will remain the dominant location for IT offshore services for North American and European buyers due to its scale and resources. The Importance of an Employment Brand Companies that offshore must make operational decisions that ultimately will drive the company forward and open up new growth channels. At the same time, they must maintain an employee experience that conveys stability, security and opportunity. A strong employment brand can mean the difference between a motivated workforce that embraces and supports global efforts and one plagued by uncertainty and lack of productivity. An employment brand deﬁnes the company’s vision, mission, culture and promise to employees and highlights the collective goals all individuals are working toward. It doesn’t set unrealistic expectations. It’s honest and transparent and attracts workers who will thrive in the environment it portrays and be passionate about the mission. July 2008 talent management magazine www.talentmgt.com 53 http://www.talentmgt.com

Table of Contents Feed for the Digital Edition of Talent Management - July 2008

Talent Management - July 2008 Editor’s Letter Human Performance Leading Edge Learning Connections Guest Editorial Passive Candidate Recruiting: Evolving with a Changing Workforce How Do They Feel? Sec Regulations and Executive Compensation Performance Management: A Retail Perspective Train the Non-Trainer Management-Go-Round: Developing Future Leaders Netflix Creates Its Own Script for Talent Management Intuit Spotlights Strategic Importance of Global Employee Recognition Make HR a Profit Center: Automate Technology to Gather Tax Credit Data Offshoring and the Impact on Talent Management Advertisers’ Index Editorial Resources Full Potential

Talent Management - July 2008

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