How offshoring affects IT workers

Abstract

Despite significant public, media, and academic interest in offshoring, there has been very little data available through which to assess how offshoring has affected US-based information technology workers. In this study, we use data from two new surveys to examine how offshoring has already affected the US based IT workforce, and to test the hypothesis that offshoring is making interpersonal skills more valuable for US-based IT workers. Overall, about 30% of firms report that they send IT work overseas. Among the IT workers surveyed, about 8% report ever having experienced offshoring-related job displacement, double the average offshoring-related displacement rate across all other worker types, but still implying an annual offshoring-related displacement rate of only about 1% per year. We also provide evidence that workers who provide services requiring face-to-face contact or physical presence (“personally delivered services”) are at smaller risk of offshoring-related job displacement, suggesting that interpersonal skills are becoming relatively more valuable among IT workers. A one standard deviation increase in our measure of how “personal” a job is decreases the likelihood of being displaced due to offshoring by about 25% relative to the base rate. IT workers in functions that involve cross-divisional communication or hands-on support are less likely to be affected by offshoring.

Publication
Communications of the ACM
Date
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