Remote work has made it easier than ever for white-collar workers to find a job — but this could flip if roles get outsourced to Latin America and Asia
- US companies are expected to outsource more remote roles in the years to come.
- It comes as many businesses are struggling to find workers amid the ongoing labor shortage.
In many ways, the growth of remote work has made it easier than ever for some workers to find a job — providing access to opportunities that had previously been geographically out-of-reach.
But as US businesses continue to struggle to find workers, some may begin to look for candidates not just far from the office — but across the globe.
"When you talk to companies, they're like, 'We can't bring the person to the job, so we're going to take the job to the person,'" Stanford economist Nick Bloom, a leading remote work expert, told Insider in July. "And that second bit wasn't as easy, but now it's very easy."
While many companies have sought out remote workers across the US to fill positions, more may begin to turn their focus abroad — outsourcing jobs that can be done remotely and at a lower cost. While some IT, human resources, and tech positions are already outsourced, more white-collar workers could eventually find themselves competing in a global job market.
"If you can do your job from home, be scared. Be very scared," Richard Baldwin, an economist at the Graduate Institute in Geneva, said in a recent video, as reported by The Washington Post. "Because somebody in India or wherever is willing to do it for much less."
Over the past year, US businesses have found themselves grappling with a labor shortage. In response, many companies have raised wages to attract workers, but they've not been entirely successful. The labor shortage persists — evidenced by job openings that remain near record-levels. And even when businesses have managed to attract workers with higher wages, this has compressed margins that are already being impacted by inflation.
The next stage of the remote work revolution could provide the solution some businesses are looking for. But counterintuitively for Americans that have embraced remote work, this shift could ultimately make keeping and finding some remote jobs more difficult.
While the remote work revolution is still in its infancy, and the pandemic has made it difficult for companies to travel and build global remote operations, this is likely to change in the years to come — leading to a "big surge in offshoring," said Bloom.
"If you're about to outsource 500 jobs to India, you probably want to go and visit there first and check it out and that's not that easy," Bloom said. "I think 2025 we're going to think, ''Oh my God, look at what's happened. There's been 3 million jobs moved offshore from the US.'"
"I think this thing is about to explode."
One of the factors driving the labor shortage has been the decline in immigration in recent years — which can be attributed to the pandemic and government policies restricting it. For companies that have relied on immigrants as part of their workforce, remote work may allow them to continue tapping into the same talent pool.
Outsourcing — or simply opening a remote job to global applicants — could also help businesses cut costs. Even in the US, there's evidence that companies are using remote work as a tool to moderate wage growth — some workers are happy to let them do so — and NBER research suggests that international remote workers could provide corporations even more savings.
"US tech companies are saying, 'We can hire an engineer in the United States for $300,000 or we can hire somebody great internationally with very similar experience for $75,000,'" Chris Bakke, CEO of the tech-recruiting platform Laskie, previously told Insider.
"These guys, they're under immense pressure to cut costs to push up profit," added Bloom. "So it just doesn't seem a very difficult thing to do, and firms are starting it."
US tech companies are already actively hiring in Latin America, where the working hours are similar and the salaries are comparatively lower than the US. But technological process — and practice — could make time zone differences less daunting in the years ahead, allowing some companies to expand their footprint even further.
While some US companies may open the door to international applicants, many Americans could turn the tables — applying for remote jobs based in foreign countries. US workers are likely to be valued as foreign companies look to gain insight into the US market, but a key obstacle could prevent them from pursuing some opportunities.
"I don't see highly talented U.S. workers competing for jobs in France or Singapore, unfortunately, because Americans are so resolutely monolingual," MIT's David Autor told The Washington Post. "French and Singaporean workers will benefit more from remote access to U.S. jobs than will U.S. workers to remote access to jobs in Europe or Asia."
To be sure, even if corporations do embrace international remote work, only fully remote positions would have any chance of being impacted. Per a June WFH Research survey of over 21,000 Americans, 15% of full-time employees are fully remote, 30% are hybrid, and the remaining 55% are on-site full-time — figures Bloom expects to be fairly similar five years from now.
Additionally, white-collar jobs have long proved more difficult to outsource than manufacturing, and improvements to Zoom, for instance, will only go so far to change this dynamic.
And in the short-term, the outsourcing of some remote roles could actually help Americans, said Bloom, "because labor markets are insanely tight." An easing labor shortage is among the factors that could help quell the US's sky-high inflation.
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