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Is Outsourcing of Accounting Jobs Leading to Lower Salaries?

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Outsourcing is affecting not only IT, customer service, and other back-end processing jobs but also finance and accounting jobs. The corporate practice of shifting white-collar U.S. jobs to low-cost destinations like China, India, and the Philippines is raising concerns among job seekers. Additionally, there is fear that the compensation offered for these jobs in the U.S. is also decreasing.

Analysts of the job market are predicting the outsourcing of many more kinds of financing and accounting jobs. Some of the jobs that fall into this category are related to the back-office processes of U.S. banks, brokerage firms, insurance companies, mutual funds, and other financial services firms.

According to most reports on outsourcing and its effects, including federal reports, the absolute number of jobs outsourced appears to be considerable but is relatively miniscule compared with the number of jobs available in the American economy.

Many argue that concerns regarding lower compensation are baseless because compensation depends on supplies of skills and labor and industry demand. In addition, they say, the percentage of jobs outsourced to cheaper labor markets is so insignificant that it has affected neither the availability of jobs nor compensation. However, the reverse is true according to a recent salary survey.

Experienced accounting and finance professionals who can help businesses expand and those well versed in compliance work, according to the salary survey, are the most sought after professionals and will receive the greatest salary increases. Internal auditors, financial analysts, and public accountants will also benefit from rises in salaries. Directors and senior managers with experience in public accounting in large and small firms will find pay raises coming their way as well, and entry-level salaries are set to rise regardless of firm size.

To cope with growing demand coupled with a shortage of qualified accounting professionals in the job market, companies will lure professionals with higher salaries, bonuses, and better work-life balance options.

Demand for accountants and availability of accounting jobs have also increased because of the changes brought about by the introduction of the Sarbanes-Oxley Act of 2002. The act has created the Public Company Accounting Oversight Board to supervise the activities of the auditing profession. Additionally, the act has mandated new compliance requirements with respect to companies’ financial operations and reporting.

The Sarbanes-Oxley Act has thus been instrumental in creating new jobs, including external and internal auditing jobs, cost accounting jobs, and accounting jobs.
On the net:The Sarbanes-Oxley Act

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