Outsourced = Laid Off?
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It seems like career week in the editorial department, but I found a bunch of articles recently on careers. According to the Department of Labor employees whose jobs are outsourced should be treated the same as laid off workers. Maybe we shouldn't be helping factory workers if their industry moves, though I think I'd argue that point, but if we treat the guy rolling steel or sewing fabric this way, why not software developers?
Losing your job just stinks. I've had it happen and it's a horrible feeling and really can impact your family, emotionally and financially. As the economy moves more globally, corporations increasingly look for ways to become more competitive. The price of moving goods, once way to keep things slightly more level, has fallen so low in the software business that on straight a dollar comparison, everything should move to India or any other country where the wages are lower.
But it's not that simple. As many companies have learned, the savings have costs that are not worth it.
I think providing more benefits for the relatively few people that get outsources is a good thing. It helps to keep the economy going here because those people have assistance to keep buying food, paying their rent, keeping their car, etc. All things that benefit this country locally.
However if you are out of work for over a year in the IT field. Perhaps you should change the type of job you are looking for or move to a new field.
Steve Jones
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I read something last year to the effect that it'll take about a month for every 10k salary to find a new job. So it should take you about three months to land a decent entry level 30k job, but for a DBA on 100k (which is about the industry average according to the $55/hr rate in Tuesday's editorial
), it could be closer to a year.But if it's taking you that long, hopefully you're doing something in the meantime to keep your skills sharp...
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C8H10N4O2
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This is only just on topic...but I'm thinking out of the box this morning, I suppose.
It's important not to fall under the sway of political definitions. Outsourced, laid off, down-sized...they are all job loss. And whether you provide immediate benefits to those who lose a job has little long-term positive economic impact, because it can never match the level of productive investment that comes from someone doing a skilled job (and circulating that income locally).
One of the biggest lies about globalization is that it automatically created a global market. It may happen some day, because some day communication skills may be invariant across borders, but as it stands all that happened was that some companies found that the increased labour pool drives down the wage demands across borders -- so we got a fairly global job market. In any labour-driven industry the economics of scale are almost irresistible. But few of those companies do any long-term analysis of the impact of pushing jobs off-shore, because they report quarterly, and the quarterly returns are what matter. The saddest reality of that is they, as a result, have no skill building at a local level, and nothing to fall back upon.
The same thing is likely to happen in IT that has happened in so many apprentice-based and manufacturing industries of old. By off-shoring, out-sourcing, etc., a lot of the real talent will move to more stable career paths, leaving a gutted industry. Then, when the imbalance changes (as it will in time) and no degree of fancy accounting can imply the out-source has wage impact value, companies that went that direction are likely to be the biggest losers in their home market, because the revenue impact of having to play catch-up is immense.
What is stunning about all this, to me at least, is that the American (and to a lesser extent the Canadian approach) is to aggressively try to "globalize to cut costs," whereas most Asian nations "globalize to expand markets." It seems that the investment market, a major benefit to the few, no longer has much trickle-down effect (at least not a positive one), because cutting costs invariably means driving down real wages in the primary buying market for much of the product created. You would think business 101 would be teaching company executives that to have long-term market success, they need to drive investment locally, so that can drive purchases.
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Interesting subject... I found myself released from an 18 month contract because the new CEO and his new CIO made promises to the board that could not be kept. But in keeping with his goals, he slashed everything being done in the US and moved everything in IT to Mexico or India with the stated goal of having everything done in India because of the lower labor rates.
I knew people working in the production end of the business and the IT services suffered severally during this time.
OK, so here's my soap box... If you are on the board of a major corporation you "should" have some understanding of what it takes to make the corporation tick. My experience has been that though these men and women have been very successful in both managing a business and making money, it doesn't give them the brains to figure out the needs of the corporation where they serve as board members. No wonder American industry suffers in this world with such idiots in positions of authority. (My apologies to the few of you that seem to have a grip on what it takes to run a successful corporation.)
In the example above, the new CEO came from a successful high tech company that grew the business by building new production plants as the business increased. The corporation that hired him had grown by buying smaller successful companies that had a customer base and products that fit into the corporate stated business strategies. The integration of the IT systems between the new parent company and the purchased companies was done on the leanest budget possible. After about 10 years of this, the IT systems were a hodge-podge of compromises that worked with a good crew of people monitoring the systems on a continual basis. When it was going to fail and cause serious problems with production deliveries no one knew, but it seemed possible that it would fail at sometime in the future.
At that point the company hired HAL to take over IT and make it all work "real good". HAL had many levels of management and procedures that increased the cost of IT to about 5.5% of gross revenue. When I arrived there, they were attempting to get HAL's tentacles unwrapped from IT and take control of the business again. In my time the cost of IT went to about 3.75% of gross revenue. The new CEO/CIO combination wanted the costs to drop to less than 2% of gross revenue. Trust me Bubba; there weren't no 1.75% of fat in that group... If you took all the 40 support people completely out of the picture the savings would have been minor.
However, when you work for a board of idiots, you only have to appear to be doing a good job. So all but one or two of the group I was in are gone. No one I know in manufacturing is bragging about the good service they are getting from IT. And finally, the global ERP system I was involved with has been gutted to my knowledge. When I was there we were meeting the corporate need to group common parts orders and get volume order discounts. The savings was in the millions, but that's not what was important to the new CIO
His new policy of no contractors had to be enforced even though my cost to his budget was zero and the business unit that paid for me really liked my work.That all said... Back to the subject... I looked for work in IT for about 3 months, and then broadened my view to any of the job skills which I had to market. Being from an older generation did not help, but after 5 months without work I was bored out of my mind. I then did some research and found that truck drivers were in big demand. With 2500 bucks worth of training I could take my pick of many companies and go to work anytime.
The thought of getting a job anytime I wanted to work appealed to me. It was that way in the 90's for IT work. If a contract finished, polish the ole resume, call a few head hunters, and I would usually have to beg for a week off before going to the new job to allow for a little vacation.
So I spent 5 more months looking for an IT job, but working as a truck driver instead of setting around drinking coffee with the local retired folks. I delivered stuff all over the south east, from Miami to Richmond, to Charleston, SC, to Memphis and even one long week in Pittsburgh, PA. It was a great experience!
I learned from all this that I love to work... I prefer IT or engineering work, but any honest service to my fellow man is a joy to perform. You may be looking forward to retirement and that's great because some people have a very interesting time during those years. However, for me, doing a job well is what I enjoy. What that job involves is less important, than being of service.
Oh, you may ask, “what did you tell the company I'd been doing for that 5 months you were driving the big rig?” “I was in prison but I’m innocent... I was framed
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One of the reason I left my old job was it outsourced most of the work to an Indian company in India. That was not the worst part. The worst part was that company did a very bad job. We complained to our boss that we had to redo most of their work and did not save us money or time. But the upper management would not listen because the bottom line was "Money". The company posted a big profit to the share holders and that's what they concerned. The company is a financial company in the top 10 fortune 500.
One more thing, the DBA department hired a H1 visa instead of American. They said there was no good candidate. No good American candidate could do the job ?!
I did not fully understand the immigration law changes but with the big rally they did, it certainly made American more angry than sympathy.
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Oh, you may ask, “what did you tell the company I'd been doing for that 5 months you were driving the big rig?” “I was in prison but I’m innocent... I was framed
”I thought you looked familiar.
I wanted out of IT, due to lack of personal time, so I did, went on some travelling time, when I came back, people still kept calling for work for me to do, and the pay only got better, I'm considering it again.
It's only money. Remember that.
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"It's only money. Remember that."
True, dat.
I graduated in electro-mechanical engineering in South Africa right when the government started its supercharged affirmitive action program, which effectively made it very hard for white males to get decent jobs. So I went off to Asia for the next three years, travelled, taught English and taught myself programming in my spare time.
And then I came back and I've been working in software development ever since. I really enjoy what I do, but I've enjoyed all my jobs, and I think it's very important to stay open to the possibility of changing jobs or even careers. Even if you love your job, if you have to change for some reason, there could well be other jobs out there that you'd love just as much if you gave them a shot. I have no idea what my next job will be when I leave my current employer - if it still involves software development, that's great, but it could just as easily be another complete career change.
In my case, I found that what I really enjoy and excel at is analysing problems and designing creative solutions. It doesn't really matter whether they are engineering problems, programming challenges or anything else.
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C8H10N4O2
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Sorry, I don't mean to pick, the following statement isn't clear to me.
The price of moving goods, once way to keep things slightly more level, has fallen so low in the software business that on straight a dollar comparison, everything should move to India or any other country where the wages are lower.
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The high and mighty speak words of advice.
The economy moves on globally, what does that mean exactly?
I think its just a term that people use as an excuse for when bad things happen.
We are not just about supply, demand wages ect... As Americans we are about something more: Freedom, Working conditions, standards, Rights, Helping one Another, but mostly we are Americans and Americans should come first.
The idea that if you are out of work for over a year in the IT field perhaps you should change your job is a no brainer but in a way that is sort of defeatist and avoids the issue of responsibility by our Government, companies and fellow Americans. Globally falls far behind....
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Why would I want to invest, a minimum of 365 billion dollars to stabalizing the world; and then end up unemployed? I'll take an education any day.
A bigger question may be, how do we get leader ship with a vision for prosperity.
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There are people educated all over the world and unemployed.
I agree leadership is needed but not by some elitest disconnect.
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On moving goods, sorry about that. Rereading makes me realize that it sound a little funny.
Years ago, the cost of shipping goods helped to even out the savings in costs. Tariffs also have served to level costs so that the prices between foreign and domestic goods were closer. Same in many countries. As we've gotten more efficient at many things, prices for moving goods have gone low, almost to zero, or arguably, the variable cost for moving (bits) software is zero. So in that case, why not move all your IT to the lowest cost location? There are some other factors, but in a perfect economy, that would make some sense.
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I was outsourced in October of 2001, I even had to train the Indian person that replaced me. I didn't get a solid job for the next 4 years. When I did get hired it was at a significant (11k/yr) reduction in salary. I'm not alone, I know quite a few people with my skill set that had the same problem. I kept my head above water by taking on contract jobs and they all wanted to pay me Indian wages. I'm not buying what you guys seem to be selling. Outsourcing hurt our economy and it's taken 4 years to get back to a substandard of normal. Now DBA types may have been able to find work in Los Angeles but developers had and are still having a hard time. And the wages have gone down. They are on the rise again but slowly.
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You know the funny thing is.
Most companies outsourced to India. But there are a lot of programmers from India coming to American with H1 visa looking for work and hoping to stay in America. If the IT business is booming in India, why do these people want to stay in America? I knew a lot of Indians with H1 visa working in everywhere in America waiting for their green card.
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Right on Scott!!! , yes Global Economy is a perfect economy if everyone plays by the same rules but the fact is that no one does expecially China and India.
Saying "Global Economy" is a way of managing guilt and selling the BIG LIE.
Funny how companies say "Extra Costs will lose jobs" when they are threated with higher standards
but when they outsource they say they had no choice.
Daniel
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