Stop Offshoring
Thursday, September 27, 2007
A friend of mine, who became VP of Engineering at a new startup a few months ago, told me shortly after he joined that they were offshoring their R&D to China. I thought they were nuts. The company only has 3 employees in the U.S. -- my friend, the CEO, and another business guy. Instead of building up a core team locally, they hired engineers in China to build the first version of their product "because it's cheaper."
Expectedly, a few months later, following delays and complaints, he's having second thoughts. I believe that a new startup is the worst candidate for offshoring. In the beginning of a company's life, you need dedicated people you can count on to help the company survive. In the case of a tech company, having the technical foundations built by *your* team is so important. Do you really want the software that you'll first launch with to be built by people half a world away? Seriously, the money you save by hiring "cheaper" employees isn't worth it, especially if your company won't be around to benefit from it.
Tuesday, September 11, 2007
The past two to three years, which has seen the U.S. economy grow, has shielded the backlash against offshoring because most American workers were able to find jobs, so they didn't care that their employers were opening offices in other countries instead of hiring more Americans. With the economy now slowing down and job creation reversing its growth trend, it will be interesting to see how most Americans view offshoring in the near future. As the article "American economy: RIP" points out, all of the 24,000 private sector jobs created in August were attributed to new jobs for waitresses and bartenders, hardly the sector that our country should be striving to excel at. Meanwhile, the article adds, the "lack of job growth in higher-productivity, higher-paid occupations associated with the American middle and upper middle classes will eventually kill the US consumer market." When white collar workers start getting laid off again, and the only jobs they're able to find are as waitresses and bartenders, do you think they'll start getting mad that companies are sending the desirable jobs offshore? You bet!
Saturday, September 01, 2007
While the U.S. government continues to advocate letting foreign companies steal American jobs, I read about Korea's New Paradigm Center. The NPC is a government-funded research and consulting organization. They focus on subjects such as "employee training, team building, reducing work hours, increasing organizational trust, raising the level of employee satisfaction and engagement, and improving communication so employees understand their company's goals and precisely what is expected of them" -- aspects of business that American companies have forgotten as greedy executives seek only to pad their own wallets. The results of the NPC have been impressive so far; client companies have increased profits by more than 26% on average. Perhaps American companies should focus more on helping their domestic employees as a means of improving business. The Koreans have shown that it works.
