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Ignore that sucking sound & return to your job (if you still have one)


By Lee Russ, Section OpEd
Posted on Fri Nov 24, 2006 at 05:07:14 PM EST

No matter how hard the U.S. government tries to pretend that decent jobs are not being sucked out of the country daily, and no matter how hard the mainstream media tries to ignore the fact that the government is pretending, the proverbial "sucking sound" continues unabated.

But you can keep an eye on what's going on in the real world, no matter how hard they try to cover it up, call it into question, and spin it as a good thing. Try these two stories on the joys of losing solid, mid-level white collar "knowledge jobs" to other countries:

1. Outsourcing challenge to media jobs

Video editing, digitisation and other production processes can be exported digitally and worked on offshore.

"We recognise that media, like other sectors, is increasing being affected by the outsourcing of services across national borders and even continents," said the UNI MEI world executive in its meeting in Mumbai.

As well as union rights in the new processing centres, UNI MEI wants new job opportunities for members - very often freelance - affected in exporting countries and re-assignment to other work.

Earlier this year two big Indian media operations - NDTV (a Murdoch spin off) and Genpact (partly owned by US giant General Electric) - made a pitch for TV work from the BBC in the UK and other broadcasters in the USA, Canada and Australia.

They claim that 70% of media work is digital and that 70% of this could be done more cheaply in India. Editing suites cost $140 an hour in the developed West compared to $15 in India.

2. Offshore providers target legal outsourcing market

In the past several years, several companies offering offshore legal services outsourcing have entered this KPO ["knowledge process outsourcing"] market, offering a range of low- to mid-level services. These firms, such as Office Tiger, Pangea3, and Lexadigm, serve both large corporations wishing to unload some of their in-house counsel work, such as contract drafting, document management and review, or due diligence, as well as law firms themselves seeking to cut costs in these areas. Many of these companies also offer intellectual property services such as patent and trademark work.

The global legal services market stands at some $260bn, and about $160bn of it is in the US, said Lexadigm president Puneet Mohey, citing recent figures from Forrester Research. Between 60% and 70% of this work can technically be offshored, and 70% of this offshorable work is likely to go to India, Mohey said.

Forrester figures that 12,000 jobs were in India by 2004 and that number should grow to a whopping 79,000 positions by 2015.

India is the top destination due to its many English speakers, large pool of attorneys graduating each year, and the similarity of its legal system to the US model. Plus there's the obvious cost advantage of these offshore suppliers that often charge below $50 an hour for services that US law firms will typically bill $150 an hour or higher. Yet the legal outsourcing market is still young. It was only in the hundreds of millions last year, Mohey said, and most of this went to corporations' captive shops offshore.

Indian trade group Nasscom last year also published similarly rosy projections for legal outsourcing. It estimated that $3bn to $4bn of legal work in the US alone could be outsourced, although only 2% to 3% of this market has actually been outsourced.
This year interest on the client side has also increased, as large corporations and law firms consider their outsourcing options. In fact, Mohey doubted that there is one major US law firm that has not at least looked into the issue


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Related Links

+ Outsourcin g challenge to media jobs
+ Offshore providers target legal outsourcing market
+ More on Rants
+ Also by Lee Russ
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