One in five feel threatened by offshoring

Jun 23 2006 by Nic Paton Print This Article

One in five British employees feels insecure in their job because of the risk it will be offshored to a low-cost country such as India or China, while four out of 10 feel less secure in their jobs than they did three years ago.

But according t a study by consultants Watson Wyatt,while there was a clear negative correlation between offshoring and job security, the negative impact of offshoring on employee motivation and stress and was considerably less strong.

People, it concluded, appeared not to be looking to switch jobs because of it, despite the increased uncertainty it can bring.

"Offshoring jobs can reduce costs and enhance service. But it can also unnerve and demotivate home country employees," pointed out Jonathan Gardner, an economist at Watson Wyatt.

"We wanted to know how much of a concern to employers this should be."

Watson Wyatt undertook the research to see how less secure employees of UK-based companies that offshored work felt compared with employees of organisations that had not engaged in offshoring.

The survey of nearly 5,000 people was divided into those working for organisations that had either offshored work for the UK market directly themselves or had suppliers that had done so – 37 per cent of the sample – and those which had not had this experience – 52 per cent. The remaining 11 per cent were unable to answer.

In the group with experience of offshoring, 36 per cent agreed with the statement that they felt less secure in their job as a result of the trend to offshoring. This compared with 11 per cent in the second group.

The first group were also far more likely to feel that there was a large risk of their own job being offshored within the next 12 months – 17 per cent compared with 2 per cent.

This was partly explained by this group being more likely to acknowledge that their job could be done equally as well offshore as in the UK – 13 per cent compared with 5 per cent.

But the impact on motivation was less pronounced. Some 30 per cent of the group with experience of offshoring said they were less motivated in their job compared with 19 per cent in the group without.

Similarly, 21 per cent of the first group said they were less willing to take risks at work and share new ideas compared with 15 per cent in the second group.

Employees were also asked if their perceived stress levels at work were usually manageable.

Some 58 per cent of the group with offshoring experience thought they were compared with 66 per cent of the group without.

"The impact on motivation seems to be fairly small," said Gardner. "Perhaps most telling is the result of the question as to whether or not they were considering finding a new job in the next year."

In the group with experience of offshoring, some 36 per cent said they were looking to find a new job in the next 12 months compared with 37 per cent in the group without experience of offshoring.

It appeared that people may feel less secure and slightly less motivated because of offshoring but they are no more likely to looking for a job elsewhere.

According to Watson Wyatt, this may, however, be because they are working in a sector where alternative employers are just as likely to be engaged in offshoring.

"While the majority of employers may consider the short-term demotivational – and consequent productivity – impact of offshoring acceptable, they cannot afford to be complacent," continued Gardner.

"It should be of great concern if otherwise committed and high performing employees for whose roles their employer has no plans to shift overseas are being demotivated by fears of offshoring," he added.