Remote work prompts outsourcing of highly skilled jobs

The Wall Street Journal reports that remote work in the U.S. is once again having a transformative impact on company practices and structures. The latest trend, stemming largely from labor shortages and rising wages, is for companies to outsource remote work overseas.

7.3% of U.S. senior managers surveyed by the Federal Reserve Bank of Atlanta stated they were moving remote jobs abroad in August of this year. The rate of remote work being outsourced overseas is accelerating, with some projections that 10% to 20% of U.S. service support jobs could be outsourced in the next decade.

While hiring abroad itself is nothing new, the movement of highly skilled jobs overseas is a more recent development. It allows employers to cut labor costs and avoid immigration bureaucracy and visa issues when it comes to bringing overseas employees into the U.S., and it creates work opportunities for skilled workers in developing countries.

Challenges like language barriers and the feasibility of training new employees dispersed over the globe persist, but the impact on demand for U.S. office spaces — already low — and U.S. skilled office worker wages could have imminent consequences.

Office offshoring is spreading beyond traditional destinations like India, creating new “Zoom towns” overseas. European firms are increasingly hiring in cities like Tbilisi, Georgia, and Yerevan, Armenia, which offer plenty of skilled workers, including many recent refugees from Russia. Latin America, which shares time zones with the U.S., is also benefiting.