Industry Trends in Engineering Offshoring

Vivek Wadhwa, at Duke University has compiled a very interesting study on the above topic. The study makes very interesting reading and sheds light on a lot of the so called statistics put out by the main stream media.

The most interesting findings were that:

* There is no general shortage of engineers in the U.S. We asked questions about job acceptance rates, hiring bonuses and time to hire, to validate this. This proves the point that our earlier report made and contradicts the media hype about a U.S. shortage. (There have been calls by political and business leaders to double the number of U.S. engineering graduates to compete with India and China).

* 75% of U.S firms say that India has an adequate to large supply of entry level engineers – even more than in the U.S. and China. (This was a big surprise)

* 57% of companies hire graduates with 2-3 year diplomas either directly or after they have received additional training. (This may explain why despite the low 4 year engineering degree and poor quality of engineering education in India, outsourcing is gaining momentum – companies are recruiting raw talent and providing training. This also shows another big flaw in the current debate which is focused on 4 year degrees).

* Jobs are going to India, China and Mexico. Wide variety of jobs are being offshored including analysis, design, development, testing, maintenance and support.

* The work done in the U.S. is either more technical or equal to what’s done abroad. Only 1% said overseas work was more technical.

* 37% say U.S. engineers are more productive and 24% say as productive as offshore engineers. 9% said overseas employees were more productive.

* 38% say U.S. engineers produce higher quality work, 40% say they are equal. Only 1% said that overseas engineers produce higher quality.

* The strongest advantage to offshoring engineers is cost/overhead savings.

* Companies expect the offshoring trend to continue and expect a wide variety of jobs to go overseas. Only 5% indicated a stabilization or contraction of offshore operations.

* The types of jobs that won’t be offshored by most companies– research, conceptual design , IP work, deep technical, communication or business support, customer interactions, project management, marketing, finance, architect level design, network design, management staff, business analysis, jobs requiring U.S. security clearances

* Advantages of U.S. engineers — Understand market, culture, business, communication, interpersonal skills, creativity, problem solving, risk taking, networking, analytical, can work on high security applications, proximity

The entire study can be downloaded here in PDF Format