U.S. Workers Outperform Offshore Solutions, But…

Despite the tech industry’s lament there aren’t enough qualified workers to fill available jobs, a new report found onshore workers outperformed offshore workers on a number of key attributes. But by no means does that mean offshored IT and business process will be returning to the U.S. in waves, according to the report, Around the World and Back Again: Sourcing Services in the USA, by research firm HfS.

women in front of flagIn its survey of 235 enterprise buyers and 270 outsourcing suppliers, HfS found that enterprises believe American workers are more innovative and more like to take the initiative. “The market is now realizing that the so-called softer skills – communications and contextual awareness – add real value to business and IT services delivery,” says HfS. It also notes that, enterprise buyers “are waking up to the fact that there’s a relationship between cultural understanding and performance.”

HfS Report Attributes chart

Such realizations may in part be driving companies like Rural Sourcing and General Electric to announce plans to insource some of their IT work. And last year, General Motors announced plans to insource 8,500 jobs for IT workers over the next three to five years.

Better Isn’t Cheaper

Unfortunately, the strengths of U.S. workers are often not enough to prompt businesses to change their game plan and bring offshore jobs back home. According to HfS, offshore adopters say “they have spent significant time and resources building offshore management and governance capabilities, and the operational and financial risk associated with a 180-degree turn in services location is too great, while the perceived benefits are too difficult to determine at this stage.”

As a result, don’t expect a wave of IT jobs to come home anytime soon. Only a third of enterprise buyers wanted to source their IT services work inside the U.S. Meanwhile, 32 percent of the IT leaders surveyed by research firm Bluewolf said they planned to increase their outsourcing investments this year.

H-1B Debate

Another issue that’s often used to justify moving tech jobs overseas is the lack of qualified talent in the U.S., and thus a need to increase the cap for H-1B visa holders. Some companies have cited their willingness to locate operations offshore unless more domestic candidates become available. However, University of California at Berkeley Senior Economist Ashok Bardhan doesn’t buy it. “Companies that say that are being somewhat disingenuous. Cap or no cap, they’d still move offshore,” he told Dice News. “The motivations for onshore foreign hiring versus offshoring involves many calculations, including unit labor costs, the need for physical presence, market access, internal firm coordination issues, consumer feedback, and the like. It’s not so cut-and-dried.”

Comments

  1. BY Robert says:

    One way is that we are Americans and will always outperform any foreign outsourcing scheming company. I also would like to know when did America decide that it was responsible to clothe, feed, house, and employ the world? And what idiot made that decision.

  2. BY Fred Bosick says:

    “He” wasn’t an idiot. He knew he was going to make a lot of money.

    Outsourcing and offshoring are venal, not noble decisions.

  3. BY Walter Willis says:

    There is not a lack of qualified tech workers. There is a lack of qualified tech workers that are willing to work cheaply. Also, when you see a job requirement of 3-5 years of COBOL you know that there are very few US based programmers that will have that short of a span of experience – very few compsci programs in the universities teach COBOL. So the only people with 3-5 years experience will be offshore/H1B visa holders – again – cheaper labor. And based on some of the questions I have seen posted on a profesional COBOL board on LinkedIn, by so-called professional programmers in India – very inexperienced type of questions – I guess you can say you get what you pay for.

  4. BY me says:

    “Despite the tech industry’s lament there aren’t enough qualified workers to fill available jobs, a new report found onshore workers outperformed offshore workers on a number of key attributes. But by no means does that mean offshored IT and business process will be returning to the U.S. in waves, according to the report.”

    Translation: we know the quality of work done by fellow Americans will be excellent but we are counting beans in order to keep our investors happy. Hence we will continue to offshore the work then complain about the quality.

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