Local Hiring in America by Offshore Outsourcing IT Companies

March 1, 2017 5:27 pm | Updated 11 months ago.

Offshore IT outsourcing, which used to be talked about so positively not so may years ago, is possibly attracting negative sentiments today from the American people after the incidents at Disney and Southern California Edison were not only several employees were laid off due to outsourcing, but several affected workers also complained that they were asked to train less experienced offshore based staff in exchange for their severance package. The sentiments around offshore outsourcing continue to get worse with the recently announced travel ban for some foreign countries and stricter administration of immigration rules by the Trump Administration and last but not the least the recent hate crimes against Indian techies.

The offshore IT outsourcing companies not only need to stop taking American jobs to offshore destinations by leveraging labor cost arbitrage but in fact, need to create high-end jobs in America by hiring local American people for their engagements with American companies. In D2E’ opinion, this should really not cause any disruption in the business model of the offshore IT outsourcing companies. Today the percentage of local Americans engaged in the US by the Offshore IT outsourcing companies is in the range of 30 to 50 percent of their total staff in the US, but needs to quickly go up to somewhere in the range of 70 to 80 percent.

We analyze below some of the reasons for the Offshore IT Outsourcing companies bringing people from offshore locations to America using H1B visas, rather than hiring local American people to do the same job and we also indicate what the top offshore IT companies are doing to manage the underlying cultural and distance issues.

  • American workers find managing the time difference to be a challenge: For the onsite-offshore model to be successful, there needs to be a period of overlap time for the onsite staff in America and the staff in offshore locations to communicate and discuss issues, plans etc. Several offshore IT companies run multiple shifts in offshore locations to provide 24×7 support to their US customers and the expectation of these offshore IT companies is that the American employees hired by them should show similar flexibility. Working in multiple shifts or even taking calls regularly after working hours from their colleagues in offshore locations is, however, somewhat alien to most American people. Several top Offshore IT Outsourcing Companies are leveraging latest social media platforms like ‘Facebook at work’ and other advances in technology and communication to manage the time zone and distance issues effectively.
  • American workers are more comfortable with matrix structure of management: American workers find the management structure of some of the offshore IT outsourcing companies to be too hierarchical and thereby resulting in undue delays in decision making or addressing employee related issues. Most of the top IT Offshore Outsourcing Companies are addressing this by having local management structures in America for quicker decision making and addressing of issues.
  • Objective performance assessment: The other major concern of the American workers is whether the performance assessment process across the domestic employees and the American employees of the offshore IT companies are robust and transparent to a level that they are accustomed to in the American companies. Most of the top IT offshore outsourcing companies are not only adopting the world-class HR practices but are also engaging global HR companies as consultants to put in place world class HR policies.

In conclusion, local job creation in America should be one of the highest priority items for the Offshore IT Outsourcing companies, either by hiring directly or by partnering with local American companies to get the onsite client liaison and program management done.