Are Private Equity Jobs Going Overseas?

Outsourcing of jobs is a common concern among workers in high cost areas such as America and Europe. Interestingly, that concern has become a mainstay among workers across the globe, with, for example, workers in China worrying that their manufacturing jobs might end up in a lower cost place like Vietnam, Cambodia, or India.

With the debate unlikely to go away anytime soon, here’s a look at the issue for financial industry based on data recently published in the Job Search Digest Private Equity Hiring Trends Report.

Job Openings in the Financial Industry

Here’s a look at the financial industry.

Fascinatingly, if one divides the United States into three components (New York, California, and All Other), the top spot goes to the UK. Financial job openings in the UK overtook the top spot in the third quarter of 2014 with a Job Search Digest Index (JSDI) of 27, well above the next closest location, U.S. – Other at 22.

What Other Interesting Trends Are There?

The loss of the top spot for the U.S. – Other is even more interesting when looking at which area is now in third – Asia.  The movement to third place for Asian job postings comes on the heel of weakness in New York.

New York was the third place holder for most of 2013 and 2014, losing its spot after job openings slowed consistently after peaking with a JSDI of almost 19 in the first quarter of 2014.  Over this same time frame, job openings in Asia expanded, rising from a JSDI of 12 to almost 16 by the end of 2014 .

Is There Outsourcing of U.S. Financial Jobs?

With the job opening figures as the background, can one say that what were once American jobs are showing up overseas? Here’s a different look at Job Search Digest’s data. The charts shows the percentage of job openings by broad location. The large green, light green section in the middle is North America.

Interestingly, in 2011, the percentage of job openings in N. America floated in the high 30s.  In 2012, that figure jumped into the low 40s; moving up into the low to mid 50s in 2013. In 2014, it continued to hover in the mid 50s, dropping to the high 40s by the end of the year. At the end of 2014, the share of financial industry job openings occurring in N. America dropped from 54 in the second quarter to 49 in the third and forth quarters.

The UK and Asia Picture

The US picture doesn’t look so bad when looking at total jobs on an index basis. The surprising strength in the U.S./N. America in the 2013/2014 time frame doesn’t appear to have come at the expense of the UK.  Job openings in the UK have consistently floated around with a JSDI in the 20s since early 2011, recently jumping to a high of 27 in the third quarter of 2014.

It looks like the strength in the U.S. in 2013/2014 and the weakness in 2011/2012 came at the expense of Asia.  Asia’s share of job openings reached at high of 29 near the end of 2011, only to drop to a low of 12 in the first two quarters of 2014. The weakness in Asia is starting to turn, however, with Asia’s share of job openings ending 2014 at 16.

What’s the Conclusion – Are American Financial Jobs Going Overseas?

So, with the previous two discussion points as background, can one say that American jobs are going overseas? Unsurprisingly, it is difficult to say. Certainly some jobs probably shifted to Asia in 2011/2012, and perhaps some shifted back in 2013/2014.  Coming quarters will provide perhaps a little bit clearer view.