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The US Is Becoming a Hot Spot For Outsourcing (bendbulletin.com)
New submitter cdreimer shares a report from The New York Times (Warning: may be paywalled; alternate source) about how companies are now outsourcing in the United States, hiring from Michigan instead of Mumbai. From the report: For years, American companies have been saving money by "offshoring" jobs -- hiring people in India and other distant cubicle farms. Today, some of those jobs are being outsourced again -- in the United States. Nexient, a software outsourcing company, reflects the evolving geography of technology work. It holds daily video meetings with one of its clients, Bill.com, where team members stand up and say into the camera what they accomplished yesterday for Bill.com, and what they plan to do tomorrow. The difference is, they are phoning in from Michigan, not Mumbai. "It's the first time we've been happy outsourcing," said Rene Lacerte, the chief executive of Bill.com, a bill payment-and-collection service based in Palo Alto, Calif. Nexient is a domestic outsourcer, a flourishing niche in the tech world as some American companies pull back from the idea of hiring programmers a world away. Salaries have risen in places like South Asia, making outsourcing there less of a bargain. In addition, as brands pour energy and money into their websites and mobile apps, more of them are deciding that there is value in having developers in the same time zone, or at least on the same continent.
After I'm done with most of my tools I'm told I have to 'hand it off to India' for continued development / support.
I keep telling my manager that I'd rather hire a dozen high school dropouts that have completed some coding bootcamp. I don't need a CS major. I don't need a Software Engineer. I need someone that has shown any aptitude for a given language and has has enough initiative to want to learn.
As long as I can talk to them in their first language and have the opportunity to fly out to show them what I need in person once a quarter the quality is going to be better.
for employers to avoid paying benefits and their part of FICA by hiring subcontractors.
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It holds daily video meetings with one of its clients, Bill.com, where team members stand up and say into the camera what they accomplished yesterday for Bill.com, and what they plan to do tomorrow.
Which sounds like an absolute living hell.
I bet after a few weeks of being told they haven't accomplished enough for Bill.com today, and their plan for tomorrow isn't good enough, the really good workers leave and find a job where their boss doesn't look over their shoulder every day.
Their pitch was basically "We are not complete and utter shit like Infosys or Wipro." Which provided a startling level of value to customers.
...was actually onto something?
Keep jobs - American. Well played, sir!
What this world is coming to - is for you and me to decide.
Good for them. Once they have enough knowledge they're too expensive for what I need.
No one stays an apprentice forever in plumbing, hvac or electrical either. But there's a ton of apprentice level work to be done.
You've already posted several stories from him.
Why don't you just post his blog on the sidebar and help him earn money as an Amazon Associate?
In 2012, I was hired at a company which did on-shoring, mainly COBOL and RPG programming for healthcare and insurance companies still running on AS400. They were trying to expand into a new vertical, SAS programming for analytics firms, which I was hired to lead.
After being acquired by a large multinational which was mainly doing offshoring, it took less than 2.5 years to kill the onshoring and continue on their merry way with the traditional offshore work.
Yes, onshoring is a great idea and needs to be sold more often, it's just going to be difficult with the offshoring companies buying them up and shutting them down.
This! Holy crap this!!!!!
Are you a construction worker? Because you hit that nail on the head!
It's not so much the distance or the timezone that is a problem with India, or even the culture. It's the companies that run scam like business models by putting low quality engineers into place and training them on your clock. Recently Tata consultancy had a large round of firings of senior staff because engineers that are actually good at what they do would be expensive to retain and thus make less profit. There are many good engineers in India. But they work for the companies that pay well like Google or they become managers. If you buy cheap, you get what you pay for. One problem however is that there are not enough people going into software development and at one point the only way to get people is to look over the border.
more of them are deciding that there is value in having developers in the same time zone, or at least on the same continent.
Why not fly those Indian outsourced workers to Mexico, or Nunavut? Same time zone. If the workers act up, threaten to maroon them there. Better yet, North/South Pole, they're in EVERY time zone, simultaneously!
Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
I'm sorry, but I'm steamed that a representative of the American people decided not to hire Americans for her staff. Or her Party's staff. She could have created 4 million dollars worth of jobs here in the US, but hired someone from Pakistan to do a job that I'm pretty sure half of the American citizens reading this article could have done. I call it a betrayal of the people she is supposed to represent.
I know most of the people posting here are looking at the issue of offshoring through the lens of a worker, who risks losing his job to someone in a low-cost labour jurisdiction, most likely India.
Well, there's another angle to the issue, but the conclusions are surprisingly the same.
I'm an employer - I have dozens of developers working for me, plus QA, doc, customer support, etc. We serve many large corporations, many of whom have outsourced some or all of their IT, usually to Indian firms.
The results are *awful.* Indian IT talent is singularly incapable of accomplishing work.
Before some of you start laying accusations of racism, let me first say a few things:
* We have some folks from India in our team in North America. They are totally fine.
* Some of the Indian folks we deal with in India are very smart.
* Probably the smartest person I've ever met (during grad school) was from IIT in India.
So I'm pretty confident in saying that yes, I'm biased against Indian IT outsourcing, but not against Indian people per-se.
So what's the problem?
I think it's culture. I'm definitely biased against Indian work culture, based on long experience dealing with its problems.
What's wrong with that culture?
#1. Extreme labour mobility. People who are smart and skilled tend to change jobs every 6-12 months. That means that by when they've learned to do a particular job, they stop doing it and move somewhere else for a 20% or 30% pay hike. This means that the smart ones never get any work done. Conversely, the not-so-smart ones stay in the same job for longer ... but they aren't productive because they aren't the best talent.
#2. It's all about blame. Indian IT workers hate making decisions, because if they make a mistake, they might get fired, and they need the income to be steady - no social safety net as far as I can tell. So they don't make decisions. They don't sign off on design documents. They aren't decisive, not because they are personally incapable, but because the culture punishes risk takers. Instead, they escalate and blame, escalate and blame, never contributing or taking ownership. This is a huge productivity killer.
#3. Brain drain. Life in India is hard. Brutal weather, shitty infrastructure, large cities with congestion and pollution, corrupt politics, security problems in the streets, poor sanitation and therefore disease. The best minds can and do leave. You'll find better Indian talent in the West than in India, because it's possible to move and desirable to move away.
So why do firms keep off-shoring?
a. Decisions are made by clueless accountants who think that hourly wages are a predictor of total cost and that people in different work cultures and time zones are functionally interchangeable. This is all nonsense, but decision makers believe it.
b. Kickbacks and corruption in the West. I haven't personally seen an Indian firm pay off decision makers to send them business, but I have to assume it happens.
c. Lemmings. Many decision makers are clueless so they just follow trends to cover for their own ineptitude. It's trendy to off-shore.
d. Scale. If you need to hire 1000 people next week, you could probably do it in Bangalore, but you certainly can't in Boston. They'll be 1000 minimally productive people, but you can hire them.
So why is 'off-shoring' turning into 'near-shoring'? Because some decision makers are waking up to the incessant disaster that is Indian IT outsourcing. Instead, it's better to send things to Romania, or Latin America, or the US rust belt, or Canada. Of course, none of that is easy, because you can't hire 1000 people at a go and there aren't huge IT outsourcing businesses that can quickly take on your needs, but on the other hand when you do finally get things going, you might actually get work done.
One can only hope that (a) the Indian IT business figures out how to solve its intense dysfunctionality and (b) firms learn to off-shore to less awful jurisdictions.
Carrier manufactures both heaters & air conditioners. The heater jobs were saved, while the Air Conditioners went to Mexico. I forget the numbers, but the bulk of those jobs were saved. There is no way Carrier would pull a fast one, since Trump is willing to wave the existing government contracts & threaten them w/ losing those should they renege on their promises.