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Talent Availability Rather Than Labor Cost Seen Driving Offshoring

Access to qualified personnel is now most important decision factor, says Duke University/ Booz Allen Hamilton study.

Low-cost labor is no longer the most important factor in decisions on moving work offshore; access to qualified workers is, contends a Duke University/Booz Allen Hamilton study released on Oct. 31. Indeed, indicates the study, companies are increasingly moving product design, R&D, and other relatively sophisticated operations to China, India and other places offshore primarily because they can provide the highly skilled engineers and science workers who are in short supply in the U.S. and Europe.

The study took a look at 530 companies in the U.S. and Europe.

Nearly three-fourths of the companies establishing or expanding product development offshore said "access to qualified personnel" was the most important driver of their offshoring strategies. Almost 70% said site selection was based on the availability of qualified workers.

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