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Outsourcing still growing: survey
Report shows business leaders overwhelming believe the movement of U.S. IT jobs overseas will grow.
March 26, 2004: 1:00 PM EST

NEW YORK (CNN/Money) - Despite the controversy over outsourcing American jobs to overseas locations, U.S. corporate executives expect the trend will grow over the next year, according to a survey of business leaders.

About 86 percent of the executives surveyed said they believe outsourcing information technology services to overseas countries will continue to increase, according to consulting firm DiamondCluster International.

"Executives have become more realistic in their expectations and are now more likely to implement outsourcing initiatives incrementally," said Tom Weakland, head of the firm's outsourcing advisory practice.

"While reducing costs is still the number one reason fueling the outsourcing trend, another key factor is that companies are looking to free up internal resources to focus on more critical initiatives," he added.

The survey also found that 74 percent of companies that outsourced were satisfied with the results, refuting a common criticism of sending sensitive technical work overseas.

Despite the acknowledgment of outsourcing growth, the study found that executives were concerned about backlash. About 85 percent of those surveyed said they are concerned that legislation or political pressure might prevent them from taking advantage of lower cost employees abroad.

Outsourcing has become an increasingly hot topic in the 2004 presidential election as the job market remains sluggish despite a rebound in the broader economy. (Click here for more on the outsourcing debate.)

On April 2, the U.S. Labor Department will release its report on the March unemployment rate and payroll growth, which many will be watching for signs of improvement in the labor market.  Top of page

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