contributed;articles

Doi: 10.1145/1831407.1831426

IT jobs requiring interpersonal interaction or physical presence in fixed locations are less likely to be sent out of the country.

BY PRaSanna B. tamBe anD LoRin m. hitt how offshoring affects it Workers

thOUGh the OUtSOUrcinG of IT services has long been a topic of academic interest, 22 the potential for the global sourcing of IT services to have a long-term effect on the domestic IT work force continues to attract significant interest from the media, public, and academic community. 1, 3, 6, 15, 19, 24 Here, we use survey data collected in 2007 to characterize the effect offshoring has had on the U.S. IT work force (see the sidebar “Key Survey Questions”) and estimate how it will affect the demand for skills among U.S. IT workers in the future.

Understanding the effect of offshoring on domestic employment is potentially important for anticipating the training needs of existing and future IT workers and for enabling policymakers to frame initiatives that ease the transition to a global IT work force. However, our current understanding is limited by

a paucity of data on firms’ offshoring activities. Most discussion of offshoring relies on anecdotes, press reports, and theoretical arguments. Indeed, the U.S. government acknowledges development of better offshoring data is a pressing policy concern. 9

The primary contribution of this study is the collection and analysis of data describing how offshoring affects the U.S. work force. That data comes from two complementary, unusually large surveys carried out in late 2007, one involving 3,014 human resources managers and the other more than 6,000 U.S. workers employed in a variety of occupations. The data allows us to provide general statistics about the overall rate of U.S. IT offshoring and address two main questions: Do the rates of IT worker offshoring differ significantly from the offshoring rates for workers in other occupations? And is the pattern of IT offshoring consistent with the theory that jobs are less readily offshored if they require face-to-face contact with U.S.-based consumers or co-workers or require employees to perform hands-on work with U.S.-based assets?

Our interest in the second question was motivated by work suggesting that job characteristics (such as the need for customer contact or physical presence or information intensity) are closely related to the potential rate of offshoring. 2, 4, 11, 18 In the study, we combined data on offshoring-related displacement by occupation with Blinder’s classification4 of “offshorability” of various occupations to understand

key insights

;;; offshoring is most common in high-tech firms and it functions.

;;; it workers reported offshoring-related displacement at a rate of 8%, more than double that of workers in other occupations.

;;; technical occupations reliant on skills that can be delivered with relatively little face-to-face contact are more easily offshored, suggesting a coming shift in the skill base of the domestic it work force.