Global resourcing may raise wages in some occupations in the lowest cost supply countries, but the practice will not significantly impact wages or employment in developed countries. Of all the occupations, engineering has the lowest supply of suitable talent relative to demand.
The background for the report examines the current debate on offshoring and the context for MGI’s latest research effort, defines terms used in the report, explains the report's scope, and introduces the questions covered by the research.
Synthesis of Findings — How Supply and Demand for Offshore Talent Meet
At an aggregate level, the potential supply of suitable talent from the low-wage countries MGI studied exceeds likely demand two-fold. In practice, companies hiring offshore tend to follow each other to locations that have a track record in providing offshore talent. While the resulting agglomeration of companies in popular locations has some positive effects, it also leads to local imbalances, which in turn accelerate local wage inflation and high levels of attrition. Demand will disperse to other countries if companies analyze potential offshore locations rationally according to their specific needs.
