The problem with outsourcing US tech jobs outside the USA is that it creates a hole in the experience level of US tech workers. If you take away all the call center jobs and other ‘entry-level’ type tech Jobs, it’s a lot more difficult path to get a position which requires a high level of experience.
I’m a technical writer - my personal job hasn’t been, but tons of technical writing jobs have been and are outsourced regularly. Sometimes it works, sometimes it doesn’t. I’m not especially scared for my own job. I’m good at what I do and have skills that aren’t easily found in other tech writers; should my job be outsourced, I’ll find another.
I agree that we’re part of the global economy. There’s no going back now. (Indeed, doing so would be detrimental, IMO.) At the same time, some corporations that jump on the outsourcing bandwagon are short-sighted. My husband, an engineer, worked on a project that would move the manufacture of a product line to China. He didn’t like the aspect of losing American jobs, but he had little say in the matter; the decision had been made. However, his analysis and research of the whole project convinced him that the move wouldn’t be the instant-moneymaker the suits anticipated - there’s the cost of startup in China, the cost of the bureaucracy of getting machinery to China, shipping costs, transport costs, training costs. Quality was unproven - can this new factory make the parts according to the standards our vendors demand? He ran the numbers every which way, and arrived at one inescapable conclusion: even taking the lower personnel costs of Chinese workers into account, this move wouldn’t reduce in cost savings. Not in the first five years; possibly never. And he told everyone he could, anyone that would listen. It didn’t matter. It’s now threeish years later and millions of dollars spent to make the move a reality, and the Chinese facility still isn’t fully operational and, as I understand, still has yet to produce one part. The company here in Minnesota is now scrambling to continue to produce a part they’d hope to obsolete and hasn’t done any real development on its replacement. It’s a FUBARed mess.
Globalization can and does work, but only if the company does its analysis and research first. It can’t just charge in thinking that lower employee costs will solve everything and make them money hand over fist. It won’t.
I outsource jobs for a living. It’s what I do. I help manage the outsourcers, have centers in India, Guatemala, Costa Rica and soon the Phillipines. My teams are in charge of telephony, imaging the mail to FTP around the globe, and forecasting/planning, etc.
We outsource because, despite 11% unemployment in the area, we cannot give away jobs here in the USA that pay 36k U.S. dollars per year with great health, dental and retirement plans, on a M-F schedule, 8am to 4.30pm
We cannot staff our US call centers. Outsourcing isn’t much cheaper anymore, but the top reason we outsource is for staffing. It’s still bad at 11% unemployment. At 5% unemployment, we can’t hire two people in 60 days.
Also, companies are global. My company would haul it’s corp HQ out of the USA if the environment/laws make it harder to hire overseas. That would cost us another 5k jobs.
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No it won’t. Its taken us ten years of learning to be able to offshore (we don’t outsouce, we offshore - our Asia teams still work for us) effectively.
And I think the “outsource/offshore” thing makes a big difference. I’ve been part of teams in the U.S. where the IT has been outsourced domestically, and I’ve done projects where the work is outsourced and offshored, and when you are just talking about offshoring.
To me, offshoring is way better. I have a lot more control over the project and people. I’m not dealing with a third party trying to squeeze profit out. The people doing the work are going to be stuck with it for as long as they are with the company - “Oh, Sam wrote that code…”
If I had my choice, I’d work with local teams of employees. Its SO much easier when the team is good to have them right there, on your hours. But I don’t work with anyone in my own metro area - my U.S. coworkers are spread across four timezones - plus Asia and Europe. So it really doesn’t make a difference if you are in Boston or Beijing (and the argument could be made you are no easier for me to understand if you are from Boston).
(And we allow telecommuting.)
Missed Edit:
My editorial: People don’t want to make 36k and advance. At 36k, they can’t buy the granite counter tops they NEED. They can’t have twin walk-in closets that they NEED. They can’t have 3-car garages that they NEED. They can’t have hardwood floors that they NEED.
They’d rather accept the pity of all their friends, family and neighbors than accept a job that pays what am’ts to over 40k when you consider the health, dental and retirement, with 2-4% annual increases AND a chance to advance AND get tuition reimbursement.
It’s either own a 3600 sq ft house with all the stuff that they NEED or have nothing. They choose nothing. Must be more noble or something.
I have had 3 jobs outsourced from under me [or however you would like to say it.]
And I detest calling customer service for a company that has outsourced to a country where they can not understand basic american english, nor competently speak american english, and can only step through a checklist to solve a problem. Especially if I am paying for tech service by the minute/hour.
I recognize that everyone here understands outsourcing to mean contracting out to foreign companies or establishing operations in foreign countries, but there is a distinct difference between outsourcing and offshoring.
My company is an outsourcing company. We mainly do transcription for law enforcement agencies. Our primary selling point is that, given the state of the economy, it’s far, far cheaper for those agencies to contract out to us rather than keep a pool of transcriptionists in-house and pay for their salaries, benefits, and pensions. Depending on the size of the agency, we can potentially save them millions of dollars a year by replacing their transcription department. And every single employee and independent contractor with us resides in the US, with a few Canadian exceptions.
Of course, even though we keep things in the country, we do still cost the local transcriptionists their jobs. That’s an ugly reality I don’t like. On the other hand, many of the government agencies we work with have had to institute hiring freezes well before they contract with us due to budget problems. Not only do we trim their spending, but those transcriptionists can often be moved to other departments that are shorthanded because of the hiring freeze rather than let go.
In the end, I’m ambivalent about outsourcing because it does take jobs away and give them to others even when kept domestic, but when it’s done well it’s an excellent method of streamlining operations. Offshoring I’m kind of dismayed about, but I think this is just a painful step in the globalization process; it may take decades, but equilibrium will eventually be reached.
:: ahem ::
I must amend my answer: I meant the offshore call center makes me crazy (not because of language barriers, but because accountability really sucks.)
Other - I am currently unemployed, any job I do get will probably not be vulnerable to outsourcing, and I am not pissed about outsourcing in general.
I’m somewhat amused by the people who are upset about the outsourcing of IT and other white-collar jobs, since it seems inevitable. A few decades ago, blue collar jobs in textiles, steel, and other manufacturing industries were being outsourced and now the trend is moving up to white collar jobs.
On the other hand, some countries like Germany have managed to maintain their industrial base despite the lower cost of Asian countries. So what have we been doing wrong in the US?
Obviously we don’t have enough sauerkraut and beer.
The problem of outsourcing is so intricately knotted in with the problem(s) of the U.S. healthcare system that I just … don’t know where to begin.
In that Pit thread,** ShotFromGuns **(I believe) pointed out that the U.S. isn’t going to be able to compete again and get jobs back from foreign countries as long as we force businesses to shoulder the costs of employee healthcare instead of having a single-payer govt. system. I concur, but, I don’t really know where that leaves us since so many Americans are so resistant to “socialized” “Obamacare.”
All of the industrial expansion is going to eastern Europe. By way of example only, my company isn’t building any more plants in Germany (or England or Spain or Belgium). They’re all going into Russia and Slovakia and other low-cost countries.
Recently I had a choice of awarding a purchasing contract to one of two German companies. One them proudly refused to offshore any of their work, and they were proud to have 100% German products. The other sourced major components and some assembly work to low-cost countries. Guess which one was way overpriced and didn’t get my $1.5 million?
I suspect we have talked with the some of the same call centers. I could understand outsourcing if it meant getting the same service for less money, but far too often the result is crappy unsatisfactory service. I have no doubt that many of the IT people in outsourced jobs are quite brilliant, but the person who needs I can’t understand their directions the system doesn’t work. Last year I had to get a Indian student to talk with the call center guy (i.e., screw English talk to guy in a language he might be more familiar with) to get a tax program working. When my Indian student got off the phone, he said, “I think that guy has a speech impediment. He said he was Hindi, but his accent was very odd.” Why on earth would a call center put someone like that on the phone?
I’m in a job related to the pharma industry, and my wife has just been made redundant as a medicinal chemist in a pharma site closure. Outsourcing is just one symptom of the pharma industry being a failure in recent years - I’m not pissed off with it per se. There’s a lot of very skilled Chinese chemists, largely trained in the West, who will crush the output of a typical American chemist in big pharma.
In the bigger picture, though, I am pissed. Attempting to apply short term, market-orientated thinking to the type of long term scientific innovation required for new drugs is foolish, and absolutely hammers morale and creativity amongst bench scientists. Drug discovery is often described as a Herculean task, which is fine. A Sisyphean task, though, is not fine and is what you get when management tries to constrain and parameterise scientific creativity. Outsourcing is a symptom of this mindset.
You’ve put that very well. The beancounting and suppression of creativity is part of the outsourcing mindset. If everyone is a number then that number can be anywhere. They are assuming that THEIR statistics which THEY defined and THEY gathered and THEY analyzed and which show that anyone in the world is interchangeable, are correct. Long-term consequences are not on their radar.
For a lot of industries, that just provides openings for nimble new companies that can innovate - right now you are seeing that with Microsoft, they’ve lost their innovative touch - the innovation they do is buying someone else’s idea. But Google has it (and will for a while) and is doing great. Unfortunately, industries with high barriers to entry - like cost and regulation - (see pharma) aren’t really set up for new startups to enter the market. And companies that focus on it (see Lucent) tend not to have a supportable long term revenue stream.
Dangerosa, I completely agree with you about that. Sort of like the hightech startup / internet boom all over again with but something new. Alas, I worked for such a company but we were bought by mega-corp and life at mega-corp is so much different. Our hope is that someone will start up a new company like the one we left, and hire us all back again!
I think this is the part that bothers me.
I work in the publishing industry as an editor. While the manufacturing bits of this industry have gone overseas, American editors will still be needed to edit American English. So I’m not too terribly worried about being outsourced. However, it is difficult to find a job in my field in this particular location. My company owns offices in Northern California (among other places in the US and abroad) but I could not afford to live there. If, say for example, the Monterey office hired me, at their lowest starting salary as an editor, because the cost of living in Monterey is approximately a bajillion times higher than it is here in North Florida, I could live like a king. And work in my bunny slippers. If I moved to Northern California just to take the job, I wouldn’t even be able to make rent at my current salary after 7 years’ seniority. The Monterey company doesn’t even have to offer me a Monterey salary. I’d take what I make right now and be delighted with that.
I’m a programmer working in a very small team (six people) in a very small office in California for a multinational company headquartered in Europe.
I could be vulnerable to outsourcing – it is quite concievable that my job could be done from anywhere in the world. If that happens I would certainly be annoyed, but I would understand it. It’s the way the world is nowadays.
The advantage I have is that the company has tried outsourcing some programming to India a few times, and it’s been fairly unsuccessful. I work on very complicated code, and what we’ve got back from India has always been full of errors. I think they’ve learned their lesson.
Also, they’ve told us many times that they want to keep an “outpost” in the Silicon Valley just to be tied into the tech community here.
I haven’t been a survivor of a bunch of significant rounds of layoffs over many years for nothing.