Outsourcing News: The United States May Become an Unlikely Destination for Tech Outsourcing

While this doesn’t look like a permanent trend yet, American technology jobs may no longer be taken to offshore destinations such as India and China. This sounds more like promising and good news for those who have constantly criticized the act of outsourcing technology jobs and lots of other jobs to oversea countries instead of hiring Americans to accomplish the task.

Details

Rather than the long-standing trend of leveraging cheaper labor overseas to accomplish tech jobs, a number of U.S. companies are gradually starting to hire tech experts at home. And, top of the list of the tech companies that are getting the tech jobs includes Rural Sourcing in Atlanta and Nexient (headquartered in Newark, Calif).

These and other companies that are now getting the tech jobs onshore do not accomplish the task at their home base. What they have instead are delivery centers in places that a lot of people may consider odd but are actually smart locations since they are very close to first-rate graduate schools and are essentially characterized by low living costs. The best part is that they are located very far from places where the cost of living can be described as astronomical – e.g. New York City or Silicon Valley.

Is this Likely to be a Mere Passing Trend?

To attempt answering this question, it would be nice to analyze the developing trends for the onshore companies that are now getting the tech jobs. Nextient, for instance, has experienced increased employee base from 250 to 400 within the past 24 months. In a similar manner, another home-based outsourcing company, Catalyte, has double of what their employees used to be in just one year.

Perhaps, this turn of event is not sufficiently impressive to threaten the domination of Indian outsourcers such as Wipro and Infosys. But, you can’t rule out the glaring fact that the tide is gradually turning. A good instance is a recent development where Cambia turned half of its tech jobs to Catalyte and not to the Indian tech outsourcing company it has used hitherto.

Is there More to this Trend of Retaining Tech and Other Jobs at Home?

While a lot of people may consider this trend as the response to president Trump’s threat to penalize companies that are outsourcing offshore, there is more to it. The real issue is that offshore outsourcing, especially to India is no longer as mouth-watering as before in terms of labor cost saving.

Right now, for instance, the cost of hiring U.S. software developer is only two times more expensive than using an Indian provider. As a few years back, the difference was about seven times more expensive compared to using an offshore software developer in India.

To make it clearer; the current billing standard rate for an Engineer in the U.S. is about $60 per hour, put side by side $30 standard billing rate for an Indian engineer.

So, is this turn of an event likely to become a norm or is it going to phase out sooner than imagined? Let’s watch and see.

Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! inspires entrepreneurs to build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.

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