The India Solution

 

 

"This is all very cool until you are on the receiving end of the pink slip..."

After I retired, I decided I needed one more trip around the block. So before the crash of 2008 happened, I signed on with a company in St. Paul to establish what is known as a co-sourcing solution for their IT services. After working as an outsourcer at IBM, I had some understanding of that world. But co-sourcing was a bit different. However the one thing that outsourcing and co-sourcing have in common is this - some people who work for a company which employ strategies of either outsourcing or co-sourcing, are going to be out of a job.

This week, we found out a major corporation, one headquartered in the Twin Cites, is going start an IT co-sourcing environment. Net result - 900 people from that company are going to be sent home, 300 of those 900 in the Twin Cities. Ouch. And who are going to fill those IT jobs? Mostly people from India. How do I know that? The outsourcing company who was selected to be the co-sourcing partner is Tata. I know Tata well. It is the company I managed while working at my final company in St. Paul.

It turns out to be a dollar and cents thing. First off, the "loaded" hourly rate for work done by Tata in the states is much cheaper than most local talent. Many of the folks from India are here under I 9 Visas, and they do very good work and fit in well. However, the real plus of using Indian labor is this - at the end of the day, much of the work is transferred overnight to Bangalore, or whatever city in India houses the IT team. Work done in India is even cheaper, yet the quality is usually very good. Tata is truly a global partner with an ever growing reputation.

What I tell young folks in IT is simply this - 1) don't get too comfortable with your surroundings and 2) stay as highly trained as possible. IT services are going to be around for quite a while, and clients will always be looking for the best, yet most affordable solution. I have worked with some staff augmentation folks in the past who had an hourly rate of $300/hour. When Tata came around, people making that kind of money were the first to go. Again, nothing personal. IT solutions are a dollar and cents solution so long as the skill levels are similar.

India has worked very hard to develop this IT niche in the market place. Schooling in India is long and hard for those who want to become trained in IT. English is taught from the get-go, so people working the help desk can communicate with their customer's in the states. My belief for some time now is this - certain segments of the IT world are gone forever, never to return to US workers.

I am still waiting for the next big thing in our country which will employ workers by the thousands at a good wage with good benefits. It is easy to find stories about good jobs leaving us, but much harder to find stories about good jobs being created here. I wish I had a solution, but I don't. More on this subject somewhere down the road...