One of the most unsettling
truths about the job market today can be found in two seemingly insignificant
recent announcements by high-tech powerhouses Oracle and
Hewlett-Packard.
Software giant Oracle (ORCL,
news,
msgs)
said it's moving 2,000 developer jobs from the United States to India, doubling
the number of developers it has on payroll there. Then
Hewlett-Packard (HPQ,
news,
msgs)
announced plans to close a customer-service operation in Florida and send the
operation's 1,200 jobs overseas, again to India.
Though negligible when compared to the sheer numbers of job losses
in manufacturing, the shifts by two technology companies are alarming for what
they likely foretell: no less than the relocation of millions of high-end
technology and service jobs from this country to less expensive foreign venues.
In the process, there will be a redefining of what constitutes “safe” employment
in America.
| Number of U.S. jobs moving offshore
|
| Job category |
2000 |
2005 |
2010 |
2015 |
| Management |
0 |
37,477 |
117,835 |
288,281 |
| Business |
10,787 |
61,252 |
161,722 |
348,028 |
| Computer |
27,171 |
108,991 |
276,954 |
472,632 |
| Architecture |
3,498 |
32,302 |
83,237 |
184,347 |
| Life sciences |
0 |
3,677 |
14,478 |
36,770 |
| Legal |
1,793 |
14,220 |
34,673 |
74,642 |
| Art, design |
818 |
5,576 |
13,846 |
29,639 |
| Sales |
4,619 |
29,064 |
97,321 |
226,564 |
| Office |
53,987 |
295,034 |
791,034 |
1,659,310 |
| Total |
102,674 |
587,592 |
1,591,101 |
3,320,213 | |
Source: U.S. Department of Labor and Forrester
Research, Inc. All numbers have been rounded.
It’s one thing to
see a labor-intensive industry such as textile manufacturing shift to foreign
soil, especially when the process has been going on for decades. It’s quite
another thing to watch the United States lose jobs that require highly educated
workers and the support of a sophisticated technological
infrastructure.
While current unemployment of about 6% isn't high by
historical standards, there's no denying this trend toward job exportation.
The next generation of vulnerable
jobs
A study by Forrester Research predicts that U.S. companies will
transfer 3.3 million service jobs overseas by 2015, compared with just 102,000
jobs shifted in 2000. Meanwhile, the payroll associated with those jobs will
rise from $4 billion to more than $136 billion, according to Forrester
projections.
The early job exports are predominantly in the areas of
information technology (including software and product development), customer
service, back-office accounting and sales. Other major U.S. corporations that
have sent service jobs overseas, where wage rates can be as much as 50% lower,
include:
- Dell (DELL,
news,
msgs),
which opened a customer-support center for its American market in
India.
- Delta Air Lines (DAL,
news,
msgs),
which established reservations operations in India and the
Philippines.
- American International Group (AIG,
news,
msgs),
which set up a processing operation in the Philippines to handle claims from
its American General Life subsidiary.
As the trend gathers steam, Forrester predicts, other and more
sophisticated types of knowledge-based work also will be exported.
The
bottom line, says John Challenger, CEO of Challenger, Gray & Christmas, the
Chicago-based outplacement firm: “It’s false to think the only jobs that could
go overseas are low-skilled jobs that pay low wages.”
5 safer sectors
The employment picture does have a
bright side, though: plenty of good jobs in growing sectors are essentially
unexportable.
Most are in services industries that figure to be among the
fastest growing segments of the U.S. economy in coming decades. These industries
run the gamut from fast-food server to physician, from security guard to bank
president, and they can be found with employers both large and
small.
Challenger identifies five sectors with an especially low risk of
exportation:
- Health care. “You can’t go overseas to see a doctor or nurse or get
physical therapy,” Challenger points out. The aging of America’s population
makes health care a good long-term career bet, he adds, singling out medical
transcription and nursing as two particularly hot areas.
- Other in-person services. These are the jobs, like those in health
care, that require a face-to-face interaction between provider and client.
They are spun off by almost every human activity and interest. Teaching and
training “of all kinds” constitutes one potential growth area, Challenger
says, because “education is being thought of as more of a life-long
thing.”
- Real estate. Just as land is not exportable, neither are many of
the activities involved in its development. In addition to real estate
service, the category also includes residential and commercial construction
and the burgeoning home-improvement industry.
- Financial services. As usual, it makes sense to follow the money.
America’s vast capital holdings have spawned entire industries dedicated to
their preservation and growth. Like the money itself, the jobs associated with
it will be kept at home.
- Security. One outgrowth of the war on terrorism is increased demand
for all types of security and military personnel. “I see a lot more of this
being needed over the next 20 years,” Challenger says.
The services sector, in particular, is approaching red-hot status. General
hiring in the services sector will be 22% greater on campuses this year than
last, according to a recent survey by the National Association of Colleges and
Employers, made up of college and university career counselors. And the most
aggressive recruiters, says Bill Currin, director of Wake Forest University’s
Office of Career Services, are those from financial services
companies.
Currin also notes that while government hiring is projected to
be down this year, a worker shortage is developing at the federal level that
will become acute in the next few years.
Hot
jobs for the short run
Projections by the federal Bureau of Labor
Statistics provide additional clues as to where the jobs will be in coming
years.
For the 2000-2010 decade, the BLS predicts, technology will
account for eight of the 10 fastest-growing occupations, as measured by
percentage increase. They are:
| Where the jobs are |
|
# jobs added |
% increase |
| 1. Computer software engineers,
applications |
380,000 |
100 |
| 2. Computer support specialists |
490,000 |
97 |
| 3. Computer software engineers, systems
software |
284,000 |
90 |
| 4. Network and computer systems
administrators |
187,000 |
82 |
| 5. Network systems and data communications
analysts |
92,000 |
77 |
| 6. Desktop publishers |
25,000 |
67 |
| 7. Database administrators |
70,000 |
66 |
| 8. Personal- and home-care aides |
258,000 |
62 |
| 9. Computer systems analysts |
258,000 |
60 |
| 10. Medical assistants |
187,000 |
57 | |
Of this group, the two software engineering jobs would seem to be the
most susceptible to eventual relocation overseas. The two non-tech positions --
home-care aides and medical assistants -- are the least so.
When
measuring the total numbers of new jobs created, the top 10 skew heavily toward
in-person kinds of service jobs; food preparation and restaurant work, customer
service, nursing, retail sales, and office and clerical work are among the
occupations that dominate. Computer support and applications-software
engineering are the only tech categories represented.
Where technology
jobs are concerned, it’s important to distinguish rapid job creation from an
inability to be exported. As more countries achieve parity in their technology
infrastructures, they could be magnets for jobs that currently are U.S.-based,
depending on differentials in labor costs.
|