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You Can’t Stop the Outsourcing Tornado

April 9, 2004
Related Topics: Outsourcing, Featured Article

With fear and anger growing over the rapid expansion of offshore outsourcing, there has never been a more important time to initiate a summit of education, labor, government and business leaders to determine how to fast-track programs that will help the growing number of displaced workers.

    Right now, many people are attempting to stop the wave of globalization that is sending an increasing number of American jobs overseas. Such efforts are a waste of valuable time, energy and resources.

Much more to come
    The fact is, there may be no way to halt the migration of jobs to foreign countries where labor is highly educated and less costly. Evidence of this can be seen in a new survey: despite the growing threat of a backlash against outsourcers, 86 percent of companies polled expect to send more jobs overseas in the next 12 months.

    A widely cited 2002 report from Forrester Research estimated that by 2015, the number of service-sector jobs relocated to foreign countries such as India, Korea and China could reach 3.3 million--a figure that may be conservative given recent trends. A later study by the University of California-Berkeley concluded that as many as 14 million white-collar jobs could be at risk of moving overseas.

    The movement toward a global economy will be filled with disruptions and hardships for American workers. We’ve already seen its effect in manufacturing, where many people in their 40s and 50s were stranded with few options after their jobs were sent to wherever the labor was least costly.

    The solution isn’t to halt outsourcing. The globalization of the workforce is a natural force, like a tornado. We don’t try to stop tornadoes. Instead, we research and develop ways to limit the damage they cause. We should take the same approach with offshore outsourcing. Instead of trying to halt the expansion of the global economy, we must direct our efforts toward preparing the workforce to compete in it.

    Just as our country and workforce have adapted to the globalization of manufacturing jobs, we’ll adapt and survive the globalization of service and information jobs. There’s no reason to think that our workforce cannot be redeployed in new directions and endeavors. However, to do this we must restructure our education system to reflect the fact that lifelong learning is crucial to our economic growth. Not doing so will not only worsen the plight of American workers but also actually increase the need for outsourcing as companies are forced to go offshore to find the workers with the best skills.

Do the math
    In 5 to 10 years, the problem will not be the lack of jobs caused by outsourcing. It will be the lack of workers who have the advanced technical, management and problem-solving skills that the jobs here require.

    The government has estimated that in less than six years, when the baby boomers start retiring, there will be nearly 168 million jobs in our economy, but only 158 million people in the labor market to fill them--a shortfall of 10 million workers. These expected labor shortages will be exacerbated by a decline in the number of workers with technical skills.

    New projections from the Bureau of Labor Statistics estimate that computer- and math-related fields will add 1,051,000 jobs between 2002 and 2012, or an average of about 105,000 new jobs per year.

    The Department of Education found that the number of people earning bachelor's degrees in computer and information science grew by just 5,500 between 2000 and 2001, the latest year for which data are available. Meanwhile, the number of degrees awarded in mathematics fell by 400 during the same period.

    Engineering is another field where demand for workers will grow, by about 22,200 jobs per year through 2012. Yet the number of degrees earned in this critical discipline has dropped significantly, from a peak of 95,828 in 1985 to 72,287 in 2001. The only factor keeping the level from plummeting further is the growing number of women earning degrees in this area.

Corporate leadership is needed
    We should develop programs that encourage companies, schools and government entities to offer skills training and tuition reimbursement to adults throughout their lives. Education cannot stop after high school or four years of college, but for many, the ability to go beyond these levels is limited by financial considerations. We need to find a way to topple this barrier.

    The responsibility cannot be placed solely on the shoulders of our education system. Employers have a vested interest in making sure that there are jobs and skilled workers to fill them here in America, if for no other reason than that these companies rely on our ability to consume their products and services. Without well-paying jobs, this isn’t possible.

    While many corporate leaders decry the lack of fundamental and technical skills among those exiting high schools and colleges today, very few are actually doing anything to remedy the situation. Federal, state and local governments should also be making a concerted effort to train tomorrow’s workforce.

Don’t ignore college students
    One area where government and businesses can contribute is through school-to-work programs. Unfortunately, funding that helps communities create unique school-to-work programs has also been cut in recent years. These programs would be instrumental in developing the future workforce.

    Some of the most successful programs are the ones that reach down to the elementary-school level to plant the seeds that could one day influence a career choice. For example, take the program operated by Opportunities-Jobs-Careers in Omaha, Nebraska, which won the 2002 School-To-Work Excellence Award presented by SHRM (and sponsored by my firm). It not only helps high-school students with career guidance, but also sends representatives from the business community into the elementary schools to talk about opportunities in their industries.

    We need to expand school-to-work programs both in number and in scope. Currently, most of these programs seem to focus on the skilled trades, and the programs target kids who are at risk of not going to college. Schools and employers must consider how to expand into areas such as computer science, mathematics and engineering, so that children who are likely to go on to college are directed into these areas where shortages will be most prevalent.

    If we fail to get children interested in math, science and computer technology, fail to increase the number of graduates in these areas, and fail to expand opportunities and accessibility to lifelong education, America will be wholly unprepared to compete in the global economy we helped create.

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