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5/2/04
TRENDS When the University of Michigan asked 561 business leaders about offshore outsourcing in a March 2004 poll, 74 percent said they were either already outsourcing work or planned to outsource some jobs in 2004. Twenty-six percent said they were not considering outsourcing.
Called The Leadership Pulse, the survey measured overall business growth, trends, and performance and was conducted by the University of Michigan Business School and eePulse Inc., a Michigan technology and research firm. Of those business leaders polled, 58 percent said their companies have outsourced programming jobs, 57 percent said they have sent other professional jobs overseas, and 44 percent said they are outsourcing administrative or back-office jobs. Thirty-eight percent have sent manufacturing jobs abroad, and 54 percent said some service jobs such as telemarketing are now being performed by workers overseas. Some participants felt business leaders should use outsourcing only when absolutely necessary. Others said companies should consider cost structure and look closely at labor costs, transportation overhead, and legal costs before outsourcing, the report said. The country of choice for the companies that have chosen to outsource work overseas: India. Thirty-five percent of the respondents said work was being outsourced to that country, according to the survey. ''The largest percentage of jobs are in programming and there are a lot of advantages to sending those jobs to India," said Theresa Welbourne, author of the study and an adjunct professor in executive education at the University of Michigan Business School. Many US companies are sending office operations to foreign countries, and others are opening up foreign subsidiaries, according to recent reports. In all, 86 percent of US software companies have either sent work abroad already or will do so this year, according to Sand Hill Group, the San Francisco investment and research firm. In a separate report, The TowerGroup in Needham found that insurance companies are outsourcing claims-processing work, and some securities firms are sending trades processing overseas.
EMPLOYMENT Here's an optimistic forecast: an uptick in hiring in the telecommunications industry. TelecomCareers.Net, an online job site that focuses on the telecommunications industry, reports that employers in the industry posted 3,500 job openings in the second quarter of 2004, up from 2,600 during the first quarter. ''We are seeing a moderate increase in employment," said Dennis Watzke, senior vice president and chief operating officer of the online site. ''We've had the best two quarters in three years. Employers are calling and so are the recruiting firms. The main skill set employers are looking for are in the sales arena such as account executives, sales engineers, and district sales managers." Despite what appears to be an increase in hiring, telecommunications professionals are not that optimistic, according to a February 2004 survey by TelecomCareers.Net. When asked whether the US economy is producing jobs at a healthy pace, 81 percent of the participants said, ''No." Only 19 percent said, ''Yes." Participants were also asked if they would recommend work in the telecommunications industry to another person as a possible career path. Of those who responded, 56 percent said they would not. In all, 44 percent said they would. Why aren't more professionals in the industry eager to recommend a career in the field? ''Many of these people have been hit hard by the economy," said Watzke. ''Telecom was hit very hard and it has taken time for it to show some improvements."
CAREERS College graduates will face a slightly improved job market this year, but competition for entry level positions will remain tight, reports MonsterTrak, the online career site for college students. The site, which polled 2,000 respondents, found that only 10 percent of this year's graduating class has found a job. Of those polled, 16 percent plan to go to graduate school, and 57 percent said they will move back in with their parents after they receive their degrees. Fifty-one percent of seniors polled do not expect to receive job offers when they graduate, a sign many are still concerned about the economy and job market. Despite the recovery's slow start, there will be some job opportunities for graduating seniors, said MonsterTrak. It recommends that college students consider entry-level work in sales, administrative and support services, healthcare, and customer service. ''Companies are beginning to hire entry-level candidates as the job market shows signs of improvement," the website said in a report. The website based its findings on a review of job postings on the Monster.com site, where 27 percent of the entry-level job listings are in sales, 10 percent are administrative positions, 7 percent are healthcare jobs, and 6 percent are customer service or call center positions.
EXECUTIVE RECRUITING Executive recruiters are hiring again. ExecuNet, a Connecticut-based online recruiting and networking firm, said its monthly index on recruitment shows that search professionals were much more confident about the employment market's potential this month. In all, 70 percent of the 229 recruiters surveyed said business conditions in the executive search industry have improved since March. Of those polled, 43 percent of the search firms said they planned to hire additional professional staff in the next three months, up from 40 percent in March. Over the past three months, 23 percent of the nation's search firms have hired staff. Looking ahead, recruiters are predicting an 18 percent increase in the number of search assignments they receive from clients over the next six months. In addition, 63 percent said they felt confident or very confident about the prospects for executive employment this year, up from 57 percent in March.
PENSION PLANS More than half -- 52 percent -- of 125 companies polled by Deloitte Consulting, a professional services consulting firm, have either made changes to their pension plans or plan to do so soon. Deloitte reports the firms are moving away from traditional defined benefits plans. Such plans promise employees a predictable monthly check upon retirement based on years of service. According to Deloitte, companies are turning from those traditional plans. The consulting firm reported that many employers are choosing defined contribution plans instead. Under those plans, a fixed amount is posted to an employee's monthly account based on salary or wages. The deposits accumulate interest over time. In some cases, workers are permitted to take the money with them when they leave the firm. Deloitte found that 38 percent of the firms that made changes to their pensions had switched to a defined contribution plan. More than 60 percent said they were trying to hold down costs when they made the switch. -- DIANE E. LEWIS
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