Why IT Outsourcing is Failing US Companies


It seems liked yesterday when the thought of $100+ per hour for a talented IT consulting professional was the norm, not the exception. Long past are those days where US companies would pay a decent rate for great home-grown IT talent. Why would they when they can get bodies from foreign markets for pennies on the dollar. This has been the trend as companies rely heavily on cheap foreign labor.  Estee Ritter spells it out in a post in Quora where she points out the flaws of this shift.

I first saw this trend in IT development and testing when I managed large enterprise initiatives for a Global bank.  Then it hit the PM world, and now still outsourcing has flooded IT recruiting.

Today my phone rings off-the-hook for new potential consulting assignments. Unfortunately most of the calls are from foreign-born recruiters who don’t have the skill set to interpret a resume and match a candidate to the correct position.  Needless to say I waste a lot of time speaking to pushy foreign-born recruiters who are more interested in submitting as many resumes as they can, regardless if the person is qualified or not.

It has been my personal experience with US recruiters that they take the time to review a person’s resume and ensure a fit prior to submission. Having been on the receiving end of resume submissions for my teams, it’s frustrating to have to sift through 50 resume submissions from foreign-born recruiters to find 5 qualified candidates because the Indian staff doesn’t know how to screen candidates. I never had this problem with US recruiting staff. That wasted time has associated costs, especially when the reviewer has an SVP after their name.

To add insult to injury some foreign-born recruiters are disguising themselves with phony American sounding names. Case in point was a recent call I received as a followup to an email from “Scott Campbell” from ObjectWin. I was surprised when I got on the phone with "Scott", whose actual name I may never know.  

It’s a quality thing and you get what you pay for. I’m not trying to condemn another culture, but companies should be aware that you get what you pay for. You may think that you are saving money by using cheap labor, but the cost is quality. And these residual costs will far exceed the cost if you were focused on quality from day 1.  



LD Forester

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India Labor taking US Jobs, Quality versus Costs