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Recession hitting outsourcing

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US tech companies are rethinking outsourcing plans because of the economic crisis, as well as pressure from the Obama administration to keep jobs at home.The BDO Seidman 2009 Technology Outlook Survey of chief financial officers suggests many think that outsourcing at the moment is not a good idea.

According to the Mercury News, while some experts think the bad economy will actually accelerate the movement of US jobs to developing countries, 22 per cent of the respondents said they were more likely to consider the United States for new outsourcing work than foreign countries.

About a third said they had a lessened appetite for overseas outsourcing. A fourth of those polled are concerned about international business and tax regulations, and 14 per cent worry about intellectual property risk.

President Barack Obama has said that tax breaks for corporations that ship jobs overseas will be over , and that worries some US companies who fear that it will no longer be economically worthwhile.

Seventy five percent of organizations polled at the annual conference of the International Association of Outsourcing Professionals said they will do the same amount of outsourcing or more in this down economy.They said their biggest need is flexibility in contracts and that prices will be lower, according to a story in Canadian HR Reporter.

Other findings:

25 percent of organizations reported lower volumes of outsourcing.
19 percent have renegotiated prices on existing contracts.
more than 53 percent said they are doing more due diligence and also favor working with larger providers.

 

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