While the Feds Insist We Must Prepare Students for High-Tech Jobs, All These Jobs are Being Shipped Overseas
Susan Notes: General Electric is one of the leaders in getting jobs out of the U.S., continuing a policy initiated by "Neutron Jack" Welch, who gained his nickname for decimating the workforce. Neutron Jack, now retired from G. E., is a top education advisor for New York City.
WASHINGTON -- In an accelerating trend, U.S. financial-services companies plan to transfer 500,000 jobs, or 8% of total industry employment, to foreign countries during the next five years, according to a new study.
Offshore job transfers have primarily focused on back-office functions such as data entry, transaction processing and call centers. But the job shift now is involving a wider range of professional lines of work, including financial analysis, regulatory reporting, accounting and graphic design, according to A.T. Kearney, a management-consulting subsidiary of Electronic Data Systems Corp.
The main reason remains the same: cost cutting. The study estimates an annual cost savings of $30 billion for the financial-services industry. A call-center employee earns about $20,000 in the U.S. and about $2,500 in India. A Wall Street researcher with a college business degree and a few years experience can earn as much as $250,000, compared with $20,000 in India.
The study was based on interviews in February and March with senior executives from 100 of the largest U.S. banks, brokerage firms, insurance companies and mutual funds. Corporate chiefs list India as the most attractive country overall for offshore business processing, followed by China, the Philippines, Canada, the Czech Republic, Mexico, Australia, Brazil, Ireland, Hungary and Russia.
China particularly should see significant growth, despite U.S. companies' experience with the Chinese violating intellectual-property laws. A.T. Kearney Managing Director Andrea Bierce said that problem is being addressed by a major U.S. insurer that is developing a new policy protecting intellectual property.
Among the most aggressive U.S. companies are General Electric Co.'s GE Capital Corp. unit, Citigroup Inc. and American Express Co. GE Capital has nearly 15,000 employees in India alone and plans to add 5,000 by year end, said Stefan Spohr, one of the study's authors. A.T. Kearney itself moved 50 jobs in creative-presentation services to India.
FAIR USE NOTICE
This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of education issues vital to a democracy. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information click here. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.