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Dated: Mar. 20, 2010

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Note: This article is not the usual IT article/tutorial we post on TechiWarehouse.Com. We wanted to point out to all our readers; especially our friends from India that this article is "NOT" targetted against them in anyway. What this article is targetting, is the fact that your friends in USA are going through some rough times. Times, unlike anything we've seen in America for the last 70 years. "WE" in the world community all need to find ways to earn. So all the power to anyone who snags the next contract.

In 2008, global economy saw the worst downturn in decades. Some even compared it to the "Great Depression" of 1930s. Millions all over the world lost their jobs and consequently their homes that they had on mortgage. It is believed that crisis spiraled through inability to repay the mortgage loans. US took the major hit of this slowdown and millions lost their means of livelihood. Big financial companies went bankrupt overnight leading to a large head count of jobless people in America. While all this was happening there were countries like India, China, and Philippines who were snapping up jobs generated inside the US borders.

India leads the charge of foreign countries that would do anything to snatch the jobs meant for middle class Americans. There is outsourcing of jobs throughout the entire spectrum ranging from high-end application development outsourcing to low-end back office jobs like call centre outsourcing.

Outsourcing of US JobsIndia's Outsource Contracting Strengths

  • Language: Indians have been more than interested to please the US companies if that helps them get a contract. Fortunately for them, they have a huge base of English-speaking people. In fact, after US, India has the largest population of English-speaking people. Nearly 20% of the Indian population uses English as their second language. This is also where India takes lead over China as far as IT services or IT-enabled services are concerned.
  • Education: A high percentage of the Indian population is unemployed or underemployed. Inflation is expected to touch double figures there. Still it produces nearly 2.5 million Information Technology, Engineering and Life Sciences graduates every year. Add about 650,000 post graduates in the same sectors and you have a vast pool of skilled manpower to pick and choose from. Coupled with such a strong base of manpower is the fact that India has the largest population of people aged between 15 and 60, the working age. These facts encourage American companies to employ Indians at a much cheaper cost. On the other hand, Indians are more than willing to work at those low rates because for them even peanuts are better than being rendered unemployed.
  • Cost Factor: Now a huge number of skilled manpower alone would not entice the US companies to outsource IT jobs to India if there was no monetary gain or incentive. This is where India again proves to be a formidable competitor. Their companies are winning outsourcing contracts with alarming ease and regularity because they can afford to reduce the cost to a fraction of what US companies will have to pay to get the same work done inside the borders of their own country.
  • Currency: Since Dollar has traditionally been strong against the Rupee, it further encourages outsourcing IT jobs like programming and customer care centers (call centers) to India. There might be slight changes due to currency fluctuation but they are not bound to cause earth quakes in either of the countries. Moreover, many companies as well as vendors are making additional clauses in the initial contract to safeguard against any volatile fluctuations in the currencies.
  • Time Difference: Then there is the natural factor of Indian clock being nearly 12 hours behind the US one that helps them save any downtime. Also, Indian government has made policies keeping in mind their own poor job market and inability to create domestic jobs.

India's Outsource Contracting Weaknesses

  • Security Risks: There are security risks involved when work is sent offshore and there is no guarantee that confidentiality code is not breached regarding sensitive information.
  • Dependency: Also national economy will slowly become dependent on the working conditions in countries like India, for example, productivity is bound to suffer if there are any domestic strikes there or staff issues.
  • Instability: Another factor that makes our day-to-day company operations highly volatile is the instability of the government in the countries where offshore jobs are passed on.
  • Work & Immigration Fraud: There have been cases files against the fraudulent means of obtaining the L-1 visa. L-1 visa allows the companies to bring in employees from other countries on a temporary basis for executive or managerial work. There have been cases where companies go against the law and pay the guest worker lower wage while he is working in US and then send him back once he has honed his skills. Worse case is that when a US employee is fired to accommodate the person on L-1 visa.

    Similar is the case with H-1B visa which allows the companies to import highly skilled programmers who can stay for a period of upto six years. Fortunately, there has been a cap on H-1B visas that can be issued in a calendar year.

    These two visas lead to window dressing where a US citizen is put on the company rolls for a limited period till the guest worker is trained enough. Once it becomes technically feasible to offshore the work, the employee is sent back to cut cost.

    There have been talks of doing away with the tax benefits to the companies who outsource. The exemption of $5000 is way too small an incentive to stop big players from outsourcing. They will still end up making millions even if this tax benefit was not extended to them.

To The Powers That Be

We need to have more incentives for the companies to get their work done within US. Rhetoric alone cannot create jobs. The nation needs to have an infrastructure in place to churn out more skilled manpower every year and keep doing it year after year. This will bring the domestic cost down and discourage outsourcing as reduction in the cost is the primary motivation behind sending jobs offshore.

Also a bit of customer-friendly attitude of the local work force can go a long way in customers demanding services only from their countrymen.

Educating and training is the way forward. The US and its youth can no longer take things lying down. They have to pull up their socks and dust those pants. It's time to go to work to keep the jobs at home.

Now that you've gotten free know-how on this topic, try to grow your skills even faster with online video training. Then finally, put these skills to the test and make a name for yourself by offering these skills to others by becoming a freelancer. There are literally 2000+ new projects that are posted every single freakin' day, no lie!

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notachance's Comment
Absolutely incorrect. For every outsourced job 9 other jobs are effected, food, entertainment, education on and on and on. The real unemployment rate in the United States is close to 25 % but due to a law that requires the federal reserve to keep it under 10 % or they can be prosacuted, the administration lies the the population because they are directly involved in the fraud thats being perpatrated on American citivens. banker bailouts world government police state tsa body scanners loss of liberty. If you like this then you should take the red pill and stay a slave to the system. If not, you know what to do.
24 Tue May 2011
Admin's Reply:

Thanks , keep post your suggestions. Surendra Gupta

Russell Smith's Comment
Thanks for this balanced article. However, I think it is inaccurate to talk in terms of Indians "snatching jobs." The statistics suggest it is likely that off-shore outsourcing leads to more jobs in the West, not fewer. On the legal process outsourcing front, I've seen with my own eyes how off-shore legal outsourcing, especially high-end, legal services KPO (knowledge process outsourcing), creates more legal work in the West, as deals previously undone, and litigations previously settled (or never filed), due to excessive legal costs, are suddenly affordable. Affordability means more work for the Western lawyers involved in supervision, editing, negotiating, and/or appearing in court. Russell Smith high-end legal outsourcing
15 Mon Nov 2010
Admin's Reply:

I agree with you whole heartedly. I myself have given work off shore at times. So I know the advantages.