Communications of the ACM
The Future of Hr and It Will Be Offshore
With the threat of economic recession looming, many experts are pointing to a fundamental change in the way that organizations handle HR functions. According to research by U.S consultancy Hackett, the economic slump is likely to lead to an acceleration of HR and IT functions being outsourced overseas. Over the next two years large companies will almost double their offshoring of these processes, largely spurred by the prospect of cost savings. The article explores the factors that are responsible, such as a shift in the global balance of power between developed and emerging economies, and then examines their impact on overall competitiveness at organizations.
The world is experiencing a shift in the balance of power between developed, Western nations and emerging economies such as India and China. As these emerging economies account for a greater share of world economic activity, more than 360,000 jobs could be moved overseas by 2010. IT would bear the brunt, with the remainder coming from finance, HR and procurement. Approximately 15% of transactional HR jobs at big firms would be offshored by 2010, up from about 10% now. Over the same time period, as many as 25% of IT jobs could be moved offshore.
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