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Session 3661

Effects of Outsourcing and the State of Economy on Employers Hiring Practices of Engineering Graduates Morteza Sadat-Hossieny,Mark Rajai Northern Kentucky University

Abstract

With the current sluggish world economy, manufacturers are resorting to several tactics to maintain lean budgets. Among these tactics are outsourcing engineering and scientific jobs to nations overseas. Another, is employing only those workers who can satisfy their immediate needs. These practices have economic implications for the employers since employment decisions are determined solely by the profit/loss calculations in a time economic exigency. It also has economic implications for engineering graduates in search for jobs with salaries commensurate to their education and skills.

This paper will combine the results of a survey conducted by the authors on this subject with information from recently published studies. Literature and data gathered will be organized and tabulated to find correlations between manufacturing employers’ economic outlook and their hiring practices. The results will provide insight into the availability of jobs for students majoring in engineering-related degrees.

Introduction

It is evident that there are multiple factors affecting the job prospects for individuals graduating with engineering degrees. The sluggish economy is a significant factor that influences the availability of jobs, but other forces, particularly outsourcing, are important as well. Currently, an alarming number of U.S. white-collar jobs, including engineering and scientific jobs, are moving overseas. These jobs are flowing mostly into developing economies in the Far East, Latin America and Eastern Europe where less- educated workforces, with specific manufacturing skills, accept employment at lower wages than U.S. engineering graduates.1 In addition, multinational corporations are moving manufacturing facilities overseas to China, India, Mexico, and other developing countries. Finally, U.S. engineering graduates also face competition from engineers and scientists based overseas who can market and deliver their services via the Internet.

This article will examine hiring practices in American manufacturing firms which have been impacted by these global economic trends. Hiring practices during downturns in the economy accompanied by foreign competition is the main focus of this paper. Companies faced with difficult financial choices achieve cost cutting by hiring individuals who have the skills to perform only certain tasks assigned to them. These jobs can be short term contract positions with limited retirement and benefit packages.

“Proceedings of the 2004 American Society for Engineering Education Annual Conference & Exposition Copyright © 2004, American Society for Engineering Education”

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Sadat-Hossieny, M., & Rajai, M. (2004, June), Effects Of Outsourcing And The State Of The Economy On Employers' Hiring Practices Of Engineering Graduates Paper presented at 2004 Annual Conference, Salt Lake City, Utah. 10.18260/1-2--13982