Nearshore Americas

Report: As Offshoring Costs Rise, US Tech Firms Look for Onshore Options

Job opportunities in the US technology sector are growing rapidly as the rising cost of maintaining overseas operation discourages a large majority of American tech firms from offshoring, according to a survey from accounting firm BDO USA.

More than 90 percent of chief financial officers BDO surveyed have talked of hiring more employees this year. It is not the services but the manufacturing that has been heavily outsourced in the USA to countries like China and South Korea. Recently, some tech firms have begun relocating their manufacturing units back to onshore.

Apple Inc, for an example, is preparing to open a manufacturing facility in Arizona, which will create hundreds of new jobs, and has also recently retained U.S. manufacturer Flextronics to assemble its Mac computers.

Across the US, according to the report, employers have continued to hire employees for their services in big data, cloud computing and data security. Moreover, employment in all information technology fields is expected to increase by 22 percent by 2020, according to the U.S. Bureau of Labor Statistics.

With wages in China rising 12 percent over the past two years, a vast majority of CFOs (95 percent) are not anticipating to offshore their operations in the coming years. Interestingly, several CFOs (57 percent) have revealed plans to outsource manufacturing to Latin American countries.

“Although the overall U.S. employment market has been slow to recover, the technology industry has been a bright spot for employment opportunities, particularly in major U.S. technology hubs,” says Aftab Jamil, partner with BDO USA. “As demand for the latest technology offerings remain strong, hiring wars will continue, and companies will need to compete for the strongest, most innovative talent in the domestic and global markets.”

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As CFOs anticipate stable or better sales revenue in the coming year, it’s no surprise that many are optimistic about their ability to provide their workforce with competitive salaries.

Over the past years, several US companies have outsourced their R&D (54 percent)) and IT services and programming (44 percent).  The BDO report does not clarify if the companies have slowed down offshoring their service sector jobs.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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