Remote work is on a declining trend as outsourcing picks up.
The pandemic upended traditional office work and spurred remote work arrangements for many employees. But as companies look to cut costs and reduce their workforce, remote work may not be as permanent as employees had hoped. There is a risk that employers may choose to outsource jobs rather than allow employees to work remotely on a permanent basis.
This threat came to light when CEO Johnny Taylor Jr. of the Society for Human Resource Management shared an anecdote with the Wall Street Journal. An employee who wanted to relocate to another state suggested working remotely. Taylor instead outsourced the employee’s tech role to someone in India, resulting in a 40% cost savings for the company.
Outsourcing- A Rising Trend
The outsourcing of white-collar jobs overseas is a growing trend, particularly in the tech industry where companies are looking to tap into lower-cost labor from overseas. The pandemic has accelerated this trend, as companies struggle to find workers and reduce costs. Tech companies are leading the way, with many already turning to overseas labor from Latin America, Europe, Africa, and the Middle East.
This shift is a stark departure from an industry that has historically prioritized in-person collaboration. But with the pandemic forcing companies to adopt remote work arrangements, the trend towards outsourcing jobs overseas may continue to grow. This puts US workers in direct competition with a global talent pool. And potentially exacerbating the layoffs that have already hit the white-collar workforce hard.
Remote Work Vulnerable In The US
However, not all positions are at risk. Only those that can be completed entirely remotely are vulnerable. Unfortunately, the number of remote positions offered in the US has been steadily decreasing, particularly as companies impose return-to-office policies. As of March, only about 13% of US job postings were remote, down from a peak of 60% in 2020, according to staffing firm Manpower Group.
Remote work arrangements have been a lifeline for many employees during the pandemic. But the threat of outsourcing underscores the importance of job security and need for clear communication between employees and employers. As the economy continues to recover, US workers may find themselves in a precarious position, especially if remote work arrangements are not offered or are rolled back.