White-Collar Jobs: Latest Victims of Recession and Technology

Blue-collar workers aren’t the only casualties of technology and a recession. Many professional jobs in finance, media, and even law and accounting will never be the same. The outsourcing of white-collar work has become possible. “While the number of law school graduates is up,” says Tom Gimbel, CEO of Chicago-based staffing and recruiting firm Lasalle Network. “Many of these new attorneys never end up practicing law.”

Likewise, medicine has been outsourcing the interpretation of x-rays to India and Australia for years. Accounting firms are outsourcing the preparation of tax returns for a fraction of the cost of hiring young college graduates. Businesses are outsourcing payroll and sometimes even the entire human resource function to online and outsourced firms. And law firms now outsource their research overseas instead of hiring new grads since access to nearly all the documents is available online. And it’s not only about saving dollars — the labor with the skills to do these virtual jobs is abundant and, most times, equally if not more qualified.

An information-driven company used to require hundreds of data entry workers, according to Mustafa Kapadia of EchoPoint Consulting. One of his clients started with 400 employees before they analyzed what the employees were doing and the cost of employing them. His company showed management that by scanning forms, the technology could read the data with 95% accuracy. “To deal with the 5% error rate," Kapadia shared, “we hired offshore workers to review the data — to ensure our human quality check. The U.S. counterparts, mostly data entry workers, in the past now become analysts.” The client is creating jobs, Kapadia reports, but the jobs are fewer in number and the skills required are more advanced. All in all, hundreds of data entry jobs were lost, but the quality of the company’s work went up. One new job effectively replaced four to five others.

While professional jobs will surely be created, the type and complexity of work that the newly hired will be expected to perform will require different and more advanced skills sets. New jobs being created require the ability to work remotely, coordinate different systems and teams, and collaborate beyond company walls and even time zones. The successful project manager of the past worked within one company, experiencing more control over the players and resources. “Today,” says Kapadia, “managing a project is extremely hard to do. You have to manage different mindsets. A project manager today is really” a governance manager, a collaboration manager and an outsource manager. A CIO friend of mine who heads up IT for a 2000-employee semiconductor business runs his entire IT department with only three employees. Their function – coordinate, coordinate, coordinate.”


Ira S Wolfe


  1. abraham May 24, 2010 at 5:46 am -

    as the many multinational companies encounters with such kind of problems of hiring the employees with permanent slaps.
    But from last many years there is a fashion of outsourcing the personnel on a contract basis.
    In this way company gains no liabilities like insurance claims,graduaty and other frienge benefits.
    Its a good point for the cost minimization on the side of a management but a source of insecurity and tension prevails in the mind of the people all the times which effects the productivity and the money saved in sense of low hiring cost, spent on the training and development of employees.
    Rude but true

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