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Outsourcing and the Accounting Labor Market

Probably you think that you are safe in your career because you are a skilled worker with a finance/accounting degree, and you may also think that the only positions that you can get offshore are unskilled or blue-collar ones. However, recently, many finance and accounting positions are moving offshore at an accelerating rate and the outsourcing market worldwide is estimated to develop at a compound annual rate of 6% until 2008, with analysts determining that finance and accounting functions are some of the immediate opportunities. Deloitte Services LLP presumes that two million financial service jobs will be outsourced over the next couple of years.

Health service firms will be outsourcing claims processing, retailers will recruit offshore providers to assume portions of their accounts payroll and payable functions, and many certified public accountant firms are outsourcing tax agreement work. This is happening for the reason that advanced technology is making it more convenient for companies to recruit offshore employers who command much lower wages.

Outsourcing has turned out to be the key element for companies to use in streamlining themselves to compete both locally and in the global marketplace. As a result, skilled finance and accounting positions in the U.S. are increasingly at risk and professionals must continue to gain knowledge and contribute more than merely to the roles specifically related to finances or accounting in order to succeed in the future. Therefore, firms that do not regard outsourcing finance and accounting functions will be at a clear disadvantage.

Important cost savings are possible by moving these functions to offshore locations where the employees are talented and cost-effective. The average all-in labor in the United States is of $26, while in countries such as China it is only of $1. Cost savings attained by avoiding costly national policies, discrimination lawsuits and employment taxes are other attractive causes why companies are increasingly outsourcing their higher salaried positions.

Many firms are already heavily outsourcing at least back-office finance and accounting positions, this is pressing other companies to do the same in order to have an opportunity in the current global markets.

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