This information provided by The Federal Observer, http://www.federalobserver.com
By Kris Maher - The Wall Street Journal
Sheryl Matta earns roughly half what she did a few years ago, and every month the job market in her field seems to get worse. She points to a single cause: offshoring.
A medical transcriptionist, Matta took her latest pay cut in January, when the Rockville, Md., company she had been working for lost a contract to a competitor that outsources work to India, and she was laid off. After scrambling for a month, she found more work transcribing notes that physicians dictate - but will need to work 15 hours a day at her new employer's 7-cents-a-line pay rate to hit her goal of earning $2,000 a month.
"I can't make a living at this anymore," says Matta, 54, who lives in Odessa, Texas. The two phone lines and Internet account needed for her job chew up about $190 a month, and she can't afford to send her 16-year-old daughter to band camp this summer. "Our jobs are being taken away, and we're very, very angry about it."
The list of jobs being affected by the movement of U.S. work to lower-cost countries around the world is growing. American companies have shipped computer-programming and call-center jobs to educated workers in India, the Philippines, Mexico, Canada and elsewhere for the past decade. Now, workers in a wide range of other fields, from accountants to electrical engineers, are discovering that their jobs aren't immune from offshore outsourcing.
"You've got to look in the rear-view mirror when there's someone else coming on the job scene who can do what you can do for less," says John McCarthy, a Forrester Research Inc. vice president. He estimates as many as 588,000 U.S. white-collar jobs will be "offshored" by 2005 - and 1.6 million by 2010. The United States had 138.3 million employed workers at the end of February.
India's National Association of Software and Service Companies estimates that more than 300,000 white-collar jobs have been created there since 2000 to serve overseas clients.
In some fields, there is theoretically no reason why the majority of positions couldn't be sent offshore, much as furniture and textile companies gradually moved production overseas or imported foreign-made products. Placeless jobs that don't require face-to-face customer interaction are increasingly at risk. Information-based jobs are especially vulnerable, because it is easy and cheap to transmit data almost anywhere.
About 10 percent of U.S. jobs in medical transcription, in which doctors' tape-recorded notes about cases are accessed electronically and typed into a computer by workers who must know medical terminology, already have been shifted to India, Pakistan, Canada and other countries, according to the American Association for Medical Transcription. Some estimates put the offshoring figure as high as 30 percent. The U.S. industry had about 99,000 workers in 2002, according to the Bureau of Labor Statistics.
"A lot of our members are single moms raising kids, and they're going to be put out of jobs," predicts Carrie Boatman, the group's director of professional relations.
Yet even outsourcers acknowledge there are limits to how much work can be sent offshore. Geographic and cultural differences can make it hard for overseas workers to take over highly sophisticated jobs, says Manoj Jain, chief executive of Pipal Research Corp., a Chicago investment- research and consulting firm with a staff in India of 50 native-born employees holding doctorates or M.B.A. degrees.
Salaries for the most sought- after foreign workers also are surging, offsetting the cost savings that lure U.S. companies overseas.
And some job fields in the United States are regulated so closely that they are relatively insulated against offshoring. While radiologists often are mentioned as likely casualties as jobs move abroad, federal laws require that anyone interpreting X-rays and other images for U.S. hospitals be trained and licensed in the United States.
The loss of U.S. radiology work "sounds sensational and scary, but it is such a small, small part of the bigger picture," says Jon Berger, vice president of NightHawk Radiology Services in Coeur d'Alene, Idaho. The company has 30 radiologists in Australia -- all of them U.S. citizens paid more than $300,000 a year. That costs about the same as a U.S. radiologist, but the Sydney office keeps working after NightHawk's employees in the United States have gone home for the night.
Still, other job categories are vulnerable. Here are several fields that experts say could see an increasing amount of U.S. work moved to other countries:
Accountants and tax professionals. Offshoring tax work is particularly attractive to many accounting firms, thanks to a large supply of qualified, lower-paid accountants in India and other countries. Mark Albrecht, CEO of outsourcing firm Xpitax, estimates that about 100,000 U.S. tax returns will be handled overseas this year.
Some outsourcers estimate that an accounting firm can save $50,000 for every 100 tax returns it ships to India.
So far, outsourcing has captured barely a speck of the U.S. tax-preparation business, which includes 132 million individual returns expected this year by the Internal Revenue Service. Temporary U.S. workers who help handle the tax-season rush from January to April eventually could be hit hard, some experts worry. Paid preparers complete more than half of all individual tax returns.
Technical writers. The job of translating complex technological concepts and procedures into language that can be easily understood by a nontechnical audience can be done from afar because it usually doesn't require face-to-face collaboration with product developers. As a result, some companies are turning to English-skilled writers in India, Russia, China and other Asian countries to compose user guides and highly technical product manuals.
Some technical writers in the United States already have seen their wages and job opportunities plummet. Michele Davis, a self-employed technical writer in Minneapolis, says she earned $100,000 three years ago -- but only $12,000 in 2003.
"I've talked to several people whose jobs have gone to Korea," says Davis, who thinks her former clients have been moving writing jobs overseas. "It's cheaper to have them write it and have an editor in America correct it."
Architects and drafters. Many architecture firms have begun exporting drafting work and the creation of legal documents used during construction. Carl Roehling, president and CEO of SmithGroup, a 750-employee architecture firm with eight U.S. offices, estimates that about a quarter of large architecture firms currently offshore their construction-documents work, and more firms are considering the practice to remain competitive.
Younger architects face the biggest threat. "I think we have less need to hire on a very basic level than we did six years ago," says an executive director for a West Coast firm that designs buildings for public-sector clients.
Legal and investment research. Mindcrest Inc. of Chicago provides legal research for companies and law firms and has a staff of 15 in Bombay, India. Much of its work in India is administrative tasks that typically would be handled by paralegals or junior lawyers, and involves document searches and researching laws in different areas, says George Hefferan, vice president and general counsel.
The job shifts are larger when companies that have set up their own research departments outside the United States are included.
Aric Press, editor in chief of American Lawyer, a legal publication in New York, adds that "commodity legal work that is largely repetitive can be done by intelligent lawyers anywhere."
Insurance claims processors. The job of processing claims involves inputting information from people seeking to be reimbursed from insurers, then determining how much to pay based on insurance policies. That chore has gone digital in recent years, removing some of the barriers that kept processing jobs in the United States.
Most of the insurance jobs being moved to other countries involve relatively simple data entry, but companies now are experimenting with shifting more complicated tasks such as reading contracts and settling claims.
"America doesn't have a lock on the skill base needed to do this job," says Sid Miner, president and CEO of Business Process Management Inc., the parent of a medical-claims processor.
Up to 20,000 claims-adjudication jobs have moved to other countries, Miner estimates, leaving about 300,000 of those jobs in the United States.
India and other countries have large supplies of qualified, lower-paid people able to do certain jobs that don't require face-to-face collaboration. Some of these jobs:
Accountants and tax professionals Technical writers Architects and drafters Legal and investment research Insurance claims processors
March 30, 2004