The offshoring of services is now entering a new stage. The early days of offshoring have been left far behind, those days when companies in the industrialized world began to offshore their production activities to developing countries with the sole goal of increasing their efficiency by reducing labor costs. In the early 21st century, the challenges we are facing are those inherent in an increasingly globalized world, and different challenges require different solutions.
The latest studies reveal that there is an imminent lack of qualified staff in the United States – especially in the fields of science and engineering – which pushes companies, especially those that are more technology-dependent, to seek talent beyond their national borders. This shortage, which is affecting all the industrialized economies, has spurred a veritable “global talent race” which will unleash changes in our way of understanding and managing organizations. For this reason, the new generation of offshoring is more focused on high-level innovation activities and the quest for talent in emerging countries.
Competing for Talent
Although cost reduction considerations remain most important for companies when deciding to offshore, access to qualified staff has become more important in the past three years and is now the major engine in the new generation of offshoring. According to the annual report issued by the Offshoring Research Network (ORN) spearheaded by Duke University and Booz-Allen-Hamilton (BAH), 70 percent of companies regard this as an “important” or “very important” factor. And U.S. companies with the most experience in offshoring deem it “more important” than cost efficiency.
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