Taking on Tech Outsourcing

Discussion in 'The VIP Lounge' started by Ken McDaniel, Jun 7, 2007.

  1. Ken McDaniel

    Ken McDaniel Active Member War Zone Member

    I don't think this has a chance in hell at passing or even getting out of committee, but I agree with the logic that there should be limits to companies laying off thousands and then promptly hiring thousands of H1Bs to fill the gap. Here's a scary stat:

    There's a game of chicken on the horizon and as long as everyone's stock portfolio grows, no one wants to deal with it. The value of a technical degree is dropping, fast, like to public school teacher fast.

    Link to Article
  2. Saurav

    Saurav Active Member War Zone Member

    I wonder how much cheaper it is to employ an H1-B worker as opposed to an American worker. Got any links to statistics? I keep reading about how companies can exploit the H1-B program to bring in cheap labor, but... not in my experience. That article linked to another article under 'cheaper', but even that was a hypothetical scenario.

    I can see the logic in that.

    The flip side, of course, is that Dell and IBM would just out-source to India and China, and then all the jobs here are gone. The H1-B program allows the company to keep the business here.

    It's an emotional issue, like everything else, and can be twisted to suit multiple agendas. I heard from a cousin in India that this year, the INS received 2x the number of applications as this year's quota in the first *day* after the application process opened. That's just crazy, and something needs to be fixed, I think.

    I'd love to have an in-depth discussion about this, but ... well, we'll see :)
  3. chad

    chad Well-Known Member War Zone Member Top Poster

    Around 1 year ago we had folks from our St. Domingo office come in. We were told that they were there to see how we operated our office so smoothly and to figure out why they were not meeting "goals". We had no idea that we were really training them. A few months after they left two of our departments left, guess where they went. A few months after that a few more departments, a month or so ago, my department left.

    I had an interview last week and have a really nice interview lined up next week that will end up paying me more and have better benefits and perks in the long run so I am pretty excited about this, however... it still sucks.

    I have dedicated the time off to my kids and my wife.
  4. Ken McDaniel

    Ken McDaniel Active Member War Zone Member

    My brother is the only remaining member of a 10 man EDS team contracted to facilitate the Medicare pay system. As federal law dictates that the contract must be serviced from US territory, EDS translated that as keeping the team leader stateside, laying off the remaining stateside techs, and contracting a team of 9 in India to take their place. Federal regulators have criticized EDS for the move, but technically since my brother is stateside, the contract is stateside and thus legal.

    Technically, it's not an H1B issue, but its close.
  5. DustinDavis

    DustinDavis Well-Known Member War Zone Member

    My wife was in the country on an H1-B for years. Unless the person accepts a lower salary, I don't think it's any cheaper than any other employee, while the employee is here in the US--which they would be if they're working on an H1-B.

    Now, truly outsourcing to technical resources that are for example based in India, that's a different story. Fully loaded resource cost for a technical resource there is like 25% to 33% of one here.
  6. Graeme

    Graeme Active Member War Zone Member

    This is why I'm glad I got into managing projects and away from hacking away at code.

    I actually had an H1B Visa, although I was supposed to have an H1A Visa (management visa vs. expert visa). The immigration guys for our company messed up, so I had to do some quick thinking to explain why I qualified for the H1B. :)

    There's definitely a bunch of H1Bs from Canada down in the US, although with the $ going where it is, perhaps not so many in the future. I know every Monday morning when I'd head into the Customs line, I'd be waiting up to 45 mins to get through (and that was with 16 agents working). There were next to no tourists in line with me.

  7. Saurav

    Saurav Active Member War Zone Member

    Hiring an H1-B worker may be cheaper than hiring a US worker (like I said, not in my experience, based on my salary and what my friends make, but maybe in some industries/parts of the country, I'm willing to buy that). Outsourcing to China or India is certainly cheaper than hiring an H1-B worker here. So if the rules change to make it harder for companies to hire H1-B workers, what do you think is likely to happen?

    The scenarios Ken and Chad described are outsourcing. Hiring an H1 worker is not the same thing as outsourcing. In some ways, it's the opposite of outsourcing - it keeps the business unit here, instead of shutting the whole thing down and moving the work outside the country.

    Like I said, this is an emotional/personal issue for many people, and I think that makes it easy to blur the lines between the various flavors of the 'immigration problem'.

    I wish you all the best with your interviews, Chad. I've been lucky so far (touch wood), but I spent a couple of years where I'd walk in to work every Monday and wonder if I still had my job. I remember how that felt.
  8. DustinDavis

    DustinDavis Well-Known Member War Zone Member

    You know, I've got some street cred on this issue, having dealt vicarously with all the trials and tribulations along with my wife, prior to when we were married. But I can't get into more detail without crossing over into territory that we probably don't want to cross into here. If anyone would honestly like to discuss it further, you can PM me.
  9. Ken McDaniel

    Ken McDaniel Active Member War Zone Member

    Saurav, that's a great point. I think the issue gets back to the original article where companies conduct layoffs, then issue a surplus of H1Bs. Although I don't think the companies save a tremendous amount of money, I don't think they would do it unless they were. In cases where companies are just filling legit vacancies with H1Bs, there's little room for complaint.
  10. Saurav

    Saurav Active Member War Zone Member

    Agreed, and if they figure out a clean way to block that without blocking legitimate attempts to hire skilled workers, I'd fully support that. Heck, I'd support anything that recognizes legal immigrants as maybe deserving slightly more legal rights than illegal immigrants :)

    I wonder how many companies are doing that. I've been here since 99, so I've seen things since right about the end of the tech boom, through the downturn, and then back to where we are now. Granted, I haven't worked anywhere as big as Dell/IBM etc. But when my employers were hiring, they were looking for local as well as H1 talent. When things got tight, the hiring freezes came, followed by layoffs, there were no H1 workers being hired. Conditions got better, and US/H1 hiring both restarted.


    Not more than me ;) Did you guys go through the marriage-green-card process? I think that was quite a shock for my wife, to realize just how obscure and bureaucratic the immigration department could be. I'm so used to the Indian government, that "Thanks for filling out the form, we'll contact you in about a year, no, there's no number you can call to check on progress" seemed perfectly normal :)
  11. cjd

    cjd New Member

    This has nothing at all to do with H1B's

    It has to do with companies playing dirty for their bottom line, and the pocket-books of their upper management and shareholders.

    I think all I need to say is "Circuit City"

    I doubt their "new" salesforce is H1B

  12. Jerry Pease

    Jerry Pease New Member War Zone Member Top Poster

    I have seen 1st hand the results of outsourcing to India and China.

    exactly my experience. It is not cheap when things have to be done twice and still ended with half of what you ask for.
  13. Saurav

    Saurav Active Member War Zone Member

    Are you talking about outsourcing, or hiring H1 workers? When you outsource you send the work outside the country. When you hire an H1 worker, you hire someone in America, someone who's come here to work and has been allowed (by the US government) to work here because he/she has demonstrated that he/she has the required technical education/experience. In that case, the project stays here, the only thing different is that the employee in question isn't a US citizen.

    When you say:

    It seems to me that you're talking about outsourcing?

    I was talking about something else - the idea that it's cheaper for a company to hire an H1 worker than an American worker. In my limited experience, that is not true - I don't think I or any of my friends who came here on H1 visas were paid less than our American co-workers, we got the same benefits packages, etc.
  14. Jerry Pease

    Jerry Pease New Member War Zone Member Top Poster

    both, I have the same experience with both. We outsource many big chunks and then we use the H1 for the final integration. What a cluster fuck that is.

    I our line of business domain knowledge is key. However, out new owners (2yrs) seem to believe they can replace anyone.

    Stop!, I know what you are thinking. It is all about the marketing spec, high level and low level engineering spec, schedules, reviews and validation. That is exactly why it usually never works out. By the time they figured it all out, time is all gone. Time = money.
  15. Saurav

    Saurav Active Member War Zone Member

    LOL!!!! Yeah I know what you're talking about.
  16. Shane

    Shane Active Member

    FX's show 30 days did a nice episode on outsourcing. The guy was quite bitter about being outsourced but really changed his tune after going to work for those outsourcing firms in India for 30 days.
  17. Andrew Beacom

    Andrew Beacom New Member

    My company is starting to do outsourcing but they figure they don't have to say they are since the company is 'based' in the us and just has code factories in India. They won the bid by being the lowest cost bid.

    I'm a technical guy and a coder so I do have to worry about my skills being commoditised by outsourcing. Jerry is right about things having to be done twice and still not being what they should have been. Right now I keep abreast of development and try to keep ahead of the curve. The quality of work will have to improve by huge amounts before I start getting really concerned. It may happen eventually though. Outsourcing is still a fad when we talk about the technical work I do IMO. Where things go from here is up in the air.
  18. Graeme

    Graeme Active Member War Zone Member

    From a $ point of view, when I had Indian resources working for me, I could get 25+ days from India for 1 day here. Doesn't do a shit-load for timelines, but it certainly saved money. :) The key was learning that you have to treat them like a computer -- they will do what you tell them, but don't expect them to interpret anything vague.

  19. AndrewM

    AndrewM New Member

    How is it "playing dirty" by paying somebody a cheaper price to do the same work? I assume when you hire somebody to do services you do some kind of value analysis which includes price in it all?

    Outsourcing has happened in all kinds of industries and it has for decades, everything from drugs to bicycles to consumer electronics. Who is more to blame for doing that outsourcing, the companies or the employees who demand more and more benefits (including pay) for doing tasks?

    H1's are interesting and you can get people cheaper if you spend a bit of time looking. As everything moves more and more towards a 'global economy' the more things like the H1 issue will rear it's head.
  20. cjd

    cjd New Member

    Because you're treating your employees (er, EX employees) like crap, and you're treating your customer like crap.

    Spreadsheets and financials data never remembers the fact that it's people. Does it matter? Only if you're a people yourself.

    But, you know, if you want to be just a commodity, a cog in the machine of calculation made by someone with way more money than you intent only on keeping it that way... be my guest.


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