Close to half of the 500 fastest-growing North American companies use offshore services and another 55 percent intend to send work overseas in the next five years as CEOs cite hiring and keeping qualified employees as their biggest operational challenge, according to a survey released by Deloitte.
"It's not unexpected that CEOs of fast-growth companies would look offshore for the talent they need to continue growing in a tight market," said Tony Kern, managing principal of Deloitte's Technology, Media & Telecommunications Group, in a press release. The study, conducted during the first quarter of 2007, tapped the CEOs of companies on Deloitte's Technology Fast 500, an annual ranking of the fastest-growing technology companies in North America based on percentage of fiscal-year revenue growth over five years.
CEOs are turning to overseas talent, the survey found, with 30 percent of CEOs in the next five years intending to have up to 10 percent of their workers offshore; 27 percent planning to have 20 percent of workers overseas; 19 percent expecting to employ 30 percent offshore talent; and 15 percent seeing the number going as high as 40 percent.
Some 43 percent of CEOs said it is "critical or very important" to look overseas for talent. Yet despite the trend to offshore work, Deloitte's survey also found that North America in the next five years represents the biggest area for potential growth for these CEOs, whose interest in the Asia Pacific region dropped by half to 10 percent from last year, possibly because of intellectual property protection issues, Deloitte says.
"What is counterintuitive is that CEOs' interest in selling in overseas markets is waning, with more than three-quarters of CEOs saying North America represents the biggest opportunity for significant growth in the next five years," Kern said.
With more than two-thirds of CEOs saying high-quality employees are the biggest contributors to company growth, finding, hiring and retaining quality employees is the biggest operational challenge for nearly half of responding CEOs, up from 41 percent last year. The need for quality staff, the survey shows, has about 70 percent of CEOs relying on equity compensation and stock options, another 51 percent offering flexible hours and 38 percent putting training and educational programs in place.
"When it comes to talent, supply and demand are out of balance, making employees more like consumers," said Jeff Alderton, a principal at Deloitte Consulting, in a press release. "If employees with those in-demand skill sets are not receiving the satisfaction they seek from their workplace, they will find it elsewhere - with the competition. This will put an even greater strain on employers for available talent."
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