United States is the largest and most established market for both IT services and BPO and will remain so in the foreseeable future. In 2010, US accounted for 63 percent of global IT offshore outsource spending, down somewhat from pre-crisis levels of approximately 67 percent. The main obstacle that US needs to combat is anti-outsourcing sentiments.
Though US President Barack Obama gave his word to stop American jobs from being outsourced to India, Indian companies got active in ramping up their American workforce. For example, Infosys plans to hire 1,500 workers in the US, Aegis – one of the largest Indian employer in US - recently announced that they intend to create more than 4,000 jobs in the US over the next two years, and this message resonates strongly with their US based clients.
Word of the Wise
* The Global Talent Index Report: The Outlook of 2015, written by The Economic Intelligence Unit reported, “The US is the stellar Global Talent Index performer, ranking first in 2011 and 2015. The US lead is almost one full point (on a 1-10 scale) in both years over the next best performers. The country’s foremost strengths are the excellence of its universities, the high overall quality of its existing workforce and a meritocratic environment that is relatively unencumbered by restrictive labor regulation.”
Snapshots from the report
a) 73 percent of respondents are confident that their business will be able to attract and retain the talent it needs over the next two years.
b) 27 percent of respondents are not satisfied with the quality of new hires over the two years.
The report also stated, “Canada – bursts into eighth position in 2015, rising by six places, the largest jump in the index. This improvement is propelled by the demographic growth rate of its working population, together with a prospective surge in employment and a marked improvement in technical skills, both resulting largely from the boom in the country’s oil industry.”
* The AT Kearney Global Services Location Index, 2011 states US leads in people skills and availability.
* Gartner estimates that North America's BPO market will grow 3.8 percent in 2011.
* Another forecast made by Technavio analyst states that the Data Center Outsourcing market in North America will grow at a CAGR of 12 percent over the period 2010–2014. The report enumerates, “One of the key factors contributing to this market growth is the increasing need to reduce data center capital and operational costs. The Data Center Outsourcing market in North America has also been witnessing increasing adoption of private cloud-based data center outsourcing. However, the growing number of end-users' concerns for data center security could pose a challenge to the growth of this market.” HP, IBM, CSC and Dell are key vendors dominating this market space.
* Canadian outsourcing industry continues to grow in 2011 after an overall positive year in 2010. BPO registered a year-on-year (YOY) growth of 2.25 percent whereas hosting services grew by 8.75 percent. The CORE (Centre for Outsourcing Research & Education) Monitor Governance report, a joint research effort with industry experts, IDC Canada and CORE in the last quarter of 2010 had estimated a year end growth of 3.8 percent as compared to 2.1 percent in 2009. 2011 is expected to be a good year for outsourcing in Canada with estimated increase of 4-5 percent predicts IDC and Merit Outsourcing Advisors expect.
Read more about The Top 100 Cities