Are U.S. businesses offshoring jobs - outsourcing them to cheaper labor overseas - at light speed, as some critics fear? Or is offshoring an overblown trend, with Corporate America shipping relatively few jobs to such places as India and the Philippines?
Depends where you are. And if you still have a job.
Ask the folks in job-challenged Hazard, Ky., whose employment at a call center started and run by Tampa's Sykes Enterprises was recently shut down. The Kentucky cuts are part of a broader movement by Sykes to shift more call center work overseas. That strategy earned Sykes a prominent and largely unflattering story on Tuesday's front page of the Wall Street Journal.
And let's not forget an even less flattering Wall Street Journal story that appears on this page. Online lender E-Loan Inc. offers its customers faster service if they let the company use its workers in India, rather than employees based in this country.
What's wrong with this picture?
Shedding some timely light on jobs heading overseas, a new quarterly survey of CEOs of middle-market companies - those with sales of from $1-million to $1-billion - suggests offshoring is still a modest but growing piece of U.S. business plans. The survey, touching on a range of economic issues and conducted late last month by TEC International, asked 1,100 CEOs what functions of their business they would move overseas in the next 12 months.
Nationally, one in five CEOs said they expected to outsource overseas in the next 12 months. Nearly 12 percent said they would offshore manufacturing functions, and a smaller percentage planned to offshore work in information technology, sales and customer support.
Among 115 Florida CEOs surveyed, offshoring is a bit less on the front burner. Closer to one in 10 Florida CEOs indicated plans to move jobs overseas. Of those Florida CEOs who are offshoring, seven percent will move manufacturing work. Smaller percentages will shift other tasks.
One interesting twist: Among CEOs in call-center-rich Florida, 4.3 percent said they would offshore customer support work in the next 12 months. That's a higher number than the 3.8 percent of CEOs nationally planning customer support offshoring in the coming year.
Chip Webster, statewide president in Brandon of the Florida chapter of TEC International, tours the state and meets regularly with groups of CEOs to discuss what's hot. Offshoring is not a big topic, at least not yet.
"It's not brought up much in discussion. It's a trend, but not as dramatic a trend as you might think from all the publicity in the press," he said.
Florida, Webster suggested, still enjoys a strong reputation in this country as a cost-effective place to put backroom operations. In the Tampa Bay area, for example, a financial cluster based on backroom processing has taken hold, thanks to relocations by such banking and securities giants as Citigroup, J.P. Morgan Chase and Franklin Templeton.
Wait a minute. Backroom jobs. Are they not the same ones most vulnerable to relocating overseas?
The lower-skill jobs, such as call center and telemarketing work, are easy targets, Webster acknowledged. But more complex backroom work - and Citigroup and Morgan Chase have plenty of those jobs here - require education and involve jargon and cultural issues that make them harder to move, he argued.
Raising the bar on backroom jobs coming to Florida is one of this state's challenges to preserve employment and discourage job flight.
TEC International's surveys reflected rising CEO optimism through most of 2003. In this year's first quarter, however, business confidence dipped slightly. In Florida, the difference was minor.
"I was pretty optimistic last quarter and I am more optimistic now," said Webster after attending recent CEO meetings in St. Petersburg, Orlando and Gainesville. From meetings once focused on business survival, Florida CEOs now talk of business growth and how to manage it.
If CEOs in Florida and nationwide are more bullish than ever, where are the jobs? The nation's payrolls grew by a puny 21,000 last month - not exactly a blazing signal of a reviving economy.
On the issue of jobs, the TEC International survey said almost 85 percent of CEOs surveyed nationally plan to hire employees this year. Most of these new hires will fill full-time positions. And much of that expansion will occur in sales and marketing departments, with 48 percent of CEOs planning to hire for those positions in 2004.
Among Florida CEOs in the survey, the results were almost as bullish. Three of four Florida executives said they plan to increase employees this year. The bulk of new hires will be full-time positions. Sales and marketing will see the most hires, followed by tradespeople such as construction and line workers, administrative and clerical staff, professional staff and then management.
Touching on a broader range of subjects, the national TEC survey of CEOs found:
72 percent support the U.S. decision to go to war with Iraq.
Nearly three of four CEOs would select George W. Bush in the upcoming presidential election. John Kerry garnered a mere 16.4 percent of the vote - even though Kerry outpolled Bush in a recent general survey of Floridians.
One in five CEOs is currently a decisionmaker regarding assisted living or nursing home placement for an elderly parent.
If outsourcing and cost-cutting plans did not already consume CEOs, the TEC survey noted one last way that executives were trying to trim. Almost a third of CEOs have tried the Atkins diet, the survey noted, and 10 percent are current Atkins dieters.
What functions will your business offshore (outsource overseas) in the next 12 months?CEO response Florida % National %Information Technology 2.6 5.2Manufacturing 7.0 11.9Sales 1.7 2.0Customer support 4.3 2.3Other 4.3 3.8Not now, but within 3 years 5.2 6.3None 79.1 72.8
Source: TEC International quarterly survey of 115 Florida CEOs and nearly 1,100 CEOs nationally of middle-market companies polled in last week of February about economic trends and issues affecting business. Percentages do not add up to 100 because CEOs could make multiple responses.
