Stop Offshoring
Google
Thursday, November 27, 2003
 
Happy Thanksgiving!

This year I'm thankful that:
1) The U.S. economy is slowly recovering, hopefully creating more jobs for AMERICAN workers
2) The H-1B limit reverted back to its pre-2000 limit of 65,000 per year from the 195,000 per year the last three years
3) MY job hasn't been outsourced to a foreign worker

Tuesday, November 25, 2003
 
Today I got my first submission to this blog from a reader!
I am not alone!!

Here's the article he submitted: Dell drops some tech calls to India - CNet News
http://news.com.com/2100-7342-5110933.html?tag=nefd_hed

"After receiving customer complaints, Dell has stopped sending U.S. technical support calls for two of its corporate computer lines to a Bangalore, India, call center.

"Calls from U.S. purchasers of Dell's OptiPlex desktop and Latitude notebook personal computers will be handled from existing facilities in the United States, a Dell spokesman said Monday.

"'Our customers weren't satisfied with the level of support they were getting' from the India operations, said Dell spokesman Jon Weisblatt. He declined to give details about the customer complaints.

"The decision involves a shuffling of tech support tasks, Weisblatt said. He said it would not affect employment levels in either India or the United States."


Hooray, one company acknowledges that offshore workers aren't the bargains they appear to be! It's odd though that the decision doesn't affect employment levels in either India or the U.S. Does that mean Dell will offshore other functions to India instead?

 
What can we as individuals do to stop the offshoring problem? Here are some ideas I had.

The Stop Offshoring Action Plan:

1) If you discover that a company whose product you use engages in offshoring, stop buying from the company and write them to tell them why you will no longer be their customer. If these companies care only about money, hit them where it hurts the most -- their pocketbooks.

2) If you are a manager in charge of personnel decisions, DO NOT outsource U.S. positions to foreign companies and severely review any decisions to hire H-1Bs. H-1Bs are meant to find skills not found in this country. Ask yourself, is the skill REALLY not available here?

3) Educate managers about the pitfalls of offshoring. They may be aware only of the cost savings and not the negative impact on their companies and American workers.

4) Look into organizations such as TechsUnite (http://www.techsunite.org) that are spearheading the opposition to offshoring.

5) Write your representatives to tell them how you feel about offshoring and your support for legislation such as the IT Disclosure Act.

6) Tell others about this blog. The more people we can educate, the better.


If you have any other ideas, you can email them to me at kpth123@yahoo.com.

Sunday, November 23, 2003
 
I saw an Indian boy yesterday and thought, "He's going to take away my child's job one day."
:-(

 
No wonder more people aren't aware of the offshoring epidemic -- companies are hiding the practice, even as they try to tout its cost cutting effectiveness.

The user has a right to know - SF Chronicle:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/11/09/BUGME2SG5L1.DTL

"One important aspect of the outsourcing trend is that practitioners frequently take elaborate steps to keep their exporting of work overseas a secret.

"Nondisclosure and confidentiality agreements are routine among outsourcers and their contractors abroad. Most companies in fact refuse to even comment on such activities, citing the need to protect proprietary information.

"This practice seems unsavory in part because such companies treat it as something shameful. In their efforts to avoid embarrassing questions and bad press, these firms have all but invited increased scrutiny of their actions.

"What, consumers rightfully ask, do they have to hide?

"DeMartinis' proposed Information Technology Disclosure Act seeks to put such questions to rest by mandating that customers be informed if any of their personal data is sent abroad. It also would require that:

-- Consumers be given the right to opt out from having personal information -- such as their name, address or Social Security number -- go to other countries;

-- A 'serviced in' label be affixed to every statement or document processed overseas, just as manufactured goods must state a country of origin;

-- Overseas customer-service workers, who often take pains to mask their location, identify their whereabouts at the outset of any conversation;

-- Calls be rerouted to domestic facilities if the consumer so chooses."


Saturday, November 22, 2003
 
Last week, the San Jose Mercury News published a series of articles regarding the offshoring trend. Here's one of them.

Caught in the pull of globalization:
http://www.bayarea.com/mld/mercurynews/business/7225976.htm

"While not every job created overseas is the result of a layoff in the United States, it's clear that demand for technical talent in India is taking off -- to the point that companies are recruiting in Silicon Valley for positions in India. About 40 tech companies did just that last week at a job fair in Santa Clara. About 750 job hunters attended, most of Indian origin, according to Karthik Sundaram, managing editor of siliconindia magazine, which organized the fair.

"Yet some American workers see a direct connection between the job boom overseas and their own unemployment.

"Humphries, for instance, said that she was let go after a lower-paid worker in India filled in for her during a 10-day vacation. She is now helping lead TechsUnite SV, a local group protesting the movement of U.S. jobs overseas...."

"Whether or not she was directly replaced by an Indian worker, Humphries embodies the worker angst now sweeping the tech workforce in the United States.

"'What Humphries represents -- having had to train her own successor -- that's like digging your own grave,' said Rep. Don Manzullo, R-Ill., chairman of the House Small Business Committee, who has proposed a new wave of 'Buy American' legislation to limit federal agencies from outsourcing government jobs overseas."


Note: I need to look into TechsUnite and the "Buy American" legislation.


Friday, November 21, 2003
 
I was shocked, angry, and disappointed to discover that our government is outsourcing jobs to foreign workers. How un-American is it to replace American U.S. government workers with non-Americans? Do you think a worker in India has YOUR best interests in mind?

State jobs don't belong abroad - NY Daily News:
http://www.nydailynews.com/business/story/132865p-118551c.html

"Every American should be outraged by the massive outsourcing of U.S. jobs overseas.

"This new trend is not about efficiency, higher productivity or skill level, but about selling out American jobs to cheap foreign labor. A new study from the University of California-Berkeley reports that as many as 14 million U.S. service jobs are at risk of being shipped overseas.

"But it's not just corporations. Many state and local governments are following the pathetic example set by corporate America. And the trend is expected to worsen...."

"One of the most mystifying examples is Indiana. The state's Department of Workforce Development is responsible for helping out-of-work Indiana citizens find jobs. Ironically, the department has awarded a $15 million contract to update its computers to the Bombay firm Tata. The project will provide employment to 65 workers coming from India on L-1 visas..."

"This is, of course, the worst kind of shortsighted thinking. New Jersey state Sen. Shirley Turner points out that outsourcing government jobs overseas ultimately results in higher costs to state and local governments and lost income tax revenue.

"'If people don't work they don't pay taxes, and if people don't pay taxes we can't provide the services that we're responsible for providing,' the Democrat says."

Thursday, November 20, 2003
 
From The San Francisco Chronicle

Credit agencies sending our files abroad:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/11/07/MNG4Q2SEAM1.DTL

"Two of the three major credit-reporting agencies, each holding detailed files on about 220 million U.S. consumers, are in the process of outsourcing sensitive operations abroad, and a third may follow suit shortly, industry officials acknowledge for the first time.

"Privacy advocates say the outsourcing of files that include Social Security numbers and complete credit histories could lead to a surge in identity theft because U.S. laws cannot be enforced overseas."


 
Imagine if the owner of an NBA basketball team decided to cut costs by replacing some of his players with players from other leagues around the world. These players were starters on teams in their respective leagues but not NBA caliber. Instead of paying the average NBA salary of $5 million, the owner only needs to pay them an average annual salary of $1 million. The owner saves $25 million by replacing half of his roster with foreign players. The team ends the season in the division cellar, with the worst record in the league.

Was it a wise move on the owner's part? In the short term, if fans decide to stick it out to see how the team fares and ticket sales do not decline as significantly as the salary savings, it may seem so. However, if the owner does not add more NBA-quality players to his team, the team will continue its losing ways, and fans will eventually stop watching. Who would want to support a losing team of second rate players when the rest of the league uses NBA players? How soon until having an inferior team catches up to any salary savings? Eventually the NBA would force the owner to change his ways because he is diluting the NBA's product, perhaps by replacing him with new ownership.

While such a scenario may sound absurb, it is already happening as companies blindly offshore American jobs to foreign countries such as India. By replacing American employees with cheaper Indian workers, companies argue that they are wisely saving money. I beg to differ. I believe they are weakening their companies as well as this country in search of questionable short term gains.

Many other articles have discussed the problems with offshoring, so I will post them on this site instead of rehashing their arguments. Meanwhile, supporters of outsourcing praise the practice by pointing to the cost savings and accusing the opposition as xenophobic.

I wouldn't be against offshoring as much if I truly believed that American companies were better off in doing so. However, in my experience, you get what you pay for, and in some cases, you lose more than you gain. Implicit in the NBA analogy is the assumption that NBA players are better as a group than foreign players. There are some foreign players who would succeed in the NBA anyway (e.g., Dirk Nowitzki, Yao Ming), but our hypothetical owner did not select these stars or he would've had to pay more than $1 million to lure them.

It is difficult not to sound biased, but in my experience and the experience of my friends, the Indian workers we've worked with as a group are not at the same level as their American counterparts. It isn't necessarily that they are less intelligent people. Rather, a combination of language, cultural, spatial-temporal, and other differences add up to a lower level of productivity on their part. At the now defunct software company where I previously worked, half of the engineering work was performed by a team in India. The leader of the Indian team was a bright and motivated man who I considered one of the best employees at the company. However, any work that was done by the team took at least twice as long and was much buggier than what we developed in the U.S. As a result, the American team had to spend more time teaching the Indian team, finishing projects that weren't completed by them, and fixing their bugs. And with time to market so important, it meant more work for us if we were to meet our deadlines.

Did we really come out ahead by offshoring our work to India? In my opinion, a resounding NO. We could have spent the same amount of money and gotten as much done in less time and with less headaches by keeping all of the work in the U.S. Although this is just one example, the experiences of myself and my friends have shown that what happened at my previous company is more the rule than the exception.

In the NBA, there is an easy way to measure how a team is doing: the won-less record. Unfortunately, mainstream businesses do not have such a convenient scorecard. How will business leaders learn whether offshoring is a good decision or not? Especially when they can so readily see the black and white figure of lower employee compensation? Even at my previous company, the management team wanted to expand the Indian team, to the consternation of the American workers who would have to bear the consequences.

It could take years or decades before a company notices how offshoring diminished its competitive advantage, especially when so many others are doing it. Imagine if all NBA owners began replacing their rosters with cheaper foreign players. Our original owner's team may fare well against such weakened competition. It wouldn't be until fans left the NBA as a whole or a superior league emerges (the displaced NBA players would undoubtedly look for work elsewhere) that the owners would take notice, but by then, it would be too late.

Let's hope it's not too late for American companies that are offshoring now.


Powered by Blogger