Show Me the Money

Survey Shows Salaries Up in Outsourcing

The headlines read these are the worst of times. But if you’re looking for a job in outsourcing, these may very well be the best of times.

The 2011 member survey of the International Association of Outsourcing Professionals (IAOP) conducted in January shows outsourcing jobs and wages increased last year. Key findings include:

- More than 40 percent of customer organizations and 62 percent of outsourcing providers and advisors increased the number of outsourcing jobs in the past 12 months.
- Salaries also were up with 58 percent of advisors and providers reporting raises of 1 to 6 percent or more; and 40 percent of clients saying they increased wages in the same range.    

The results are based on inputs from the association’s 110,000-plus members and affiliates worldwide with customers, providers and advisers from the U.S., Europe, India, Australia, South and Central America, Asia and other important outsourcing regions participating.

“Outsourcing has itself become a recognized organizational competency,” says IAOP Chairman Michael Corbett. “Companies are beginning to make the necessary investments to build these skills across their organizations. This new breed of outsourcing professional is advancing management practices and processes that produce consistent, high-quality outcomes.”

Professionals Operating Across the Business in Customer Organizations

Hiring increased in 40 percent of the client companies, with about 10 percent increasing their employment by 25 percent or more, 13 percent adding to their ranks by at least 10 percent and about 20 percent growing their workforces in the single digits.

When it comes to pay, 30 percent of customers say they increased salaries by 1 to 3 percent and 10 percent awarded raises of 4 to 6 percent, while the majority of organizations kept pay the same.  

The results show a typical client organization has 10 to 50 outsourcing professionals that operate across the business with 55 percent in functional areas, 25 percent in centralized groups supporting the entire business and about 20 percent in shared services.

Professionals in customer organizations operate across the outsourcing lifecycle with 29 percent involved in management and governance, 25 percent in implementation, 24 percent in selection and more than 20 percent involved with strategy.

Advisor and Provider Work with Clients in Large Numbers

Within provider and advisory firms, hiring grew by more than 25 percent in 11 percent of the organizations, by more than 10 percent in 27 percent of the companies and 25 percent saw single-digit job increases.

Salaries went up by more than 6 percent in about 20 percent of the companies while 16 percent reported wage increases in the 4 to 6 percent range, and 23 percent saw pay rise by 1 to 3 percent. Pay held steady at 42 percent of the companies.

Provider and advisor firms generally have larger numbers of outsourcing workers on their payrolls than customer organizations. More than 30 percent of these companies responding said they employ 250 plus people in outsourcing roles while 20 percent employ at least 50 workers.

The majority of these employees, representing 36 percent of the respondents, work in client relationships managing existing contracts while 23 percent work in centralized groups and 22 percent are on deal teams pursuing new business opportunities. 

HR Managers Top Concerns

Judging from the survey results, HR managers lose the most sleep worrying about finding and keeping the very best workers. More than 20 percent of providers and advisors responding said recruiting employees with the required skills and experience is their top issue.

Other pressing issues are retaining talent at 17 percent and developing the right skills at 15 percent. Managing knowledge also was a main concern voiced by 16 percent while 13 percent were focused on deploying the right people to the right locations.

In customer organizations, nearly 50 percent of executives participating in the survey said that setting compensation levels was an area that the HR department takes an active role in relating to outsourcing professionals.

Determining skills and competencies required for the job was an area of active involvement for 20 percent of HR departments while 15 percent reported they work to develop executive talent management strategies and the same percentage is actively forecasting employment needs.  

“Overall, the survey results paint a favorable snapshot of the outsourcing profession with companies hiring, salaries increasing and talented workers in high demand,” says Corbett. “If you’re looking for a job, sharpen your resume because now in an opportune time to explore outsourcing careers.” 

Chart #1: Customers 

Chart #2: Providers and Advisors

5/31/2011. Article first appeared in Globalization Today, the official magazine of IAOP, in the April 2011 issue.

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