Offshoring: Not Everybody’s Doing It

But clearly, offshore outsourcing is growing: In our new survey, we learned that 64 percent of those already outsourcing plan to use more overseas ...
CFO StaffJune 1, 2004

Offshoring isn’t quite as common as the hype would suggest. According to a new CFO survey of 275 finance executives at a broad range of companies, only 18 percent currently use offshore outsourcing. Those companies have moved an average of 6 percent of their workforce overseas during the past three years, although some companies sent as much as 27 percent.

Clearly, offshore outsourcing is growing: 64 percent of those already outsourcing plan to use more overseas workers in the next two years. And it increasingly affects high-paying jobs: 47 percent of survey respondents said most of the jobs that moved overseas paid $50,000 or more before being outsourced.

Information technology is the most common job sent offshore, followed by manufacturing and call-center positions. As for finance and accounting, 21 percent of survey respondents reported sending those activities offshore.

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At the same time, our survey suggests that dramatically lower labor costs overseas don’t automatically translate into dramatic savings. While 42 percent of those using offshore outsourcing reported savings of more than 20 percent, almost as many — 38 percent — see savings of less than 15 percent, with 10 percent of respondents reporting no savings at all.