More on offshore

My recent posting about offshoring ("Thoughts about the economics of offshoring," Advice Line, 2/19/2007) resulted in quite a few comments. Two common threads deserve a reply.The first is the common complaint about job loss. It's a very real worry. It's also a worry with precious little evidence to support it. Employment in the United States is quite high at the moment, including employment in among IT professio

My recent posting about offshoring ("Thoughts about the economics of offshoring," Advice Line, 2/19/2007) resulted in quite a few comments. Two common threads deserve a reply.

The first is the common complaint about job loss. It's a very real worry. It's also a worry with precious little evidence to support it. Employment in the United States is quite high at the moment, including employment in among IT professionals.

I have little doubt that IT employment, like employment in other sectors, has become more volatile than it used to be, and competition from offshore service providers certainly has contributed to this trend. My best advice is this: Expect to be laid off.

Plan your finances on the assumption that for every three months you are gainfully employed you'll be unemployed for another month. It's a pessimistic outlook that will have, as a useful side-effect, better finances when you retire.

The other set of comments were in response to my statement that we aren't shipping jobs offshore; rather, offshore companies are outcompeting onshore IT professionals for the work.

The commonly stated response is that they aren't outcompeting us. What they're doing is working for a fraction of what American workers are willing to accept, because they're willing to live in much simpler conditions than we are (conditions our grandparents or great-grandparents, would, I suspect, have taken for granted).

Well, yes, exactly. I imagine IBM and Compaq felt much the same way about Dell when it got started. It was willing to live with a simpler lifestyle - a leaner management structure and thinner margins. Before that, IBM had a beef with open systems, whose manufacturers were willing to live with a leaner management and thinner margins.

And, right now, many commercial software providers complain about open source software providers, who are willing to live with the leanest imaginable management structure (none) and exceptionally thin margins (none).

That's the nature of competition. Sometimes it's on price, sometimes on features, sometimes on quality, sometimes on convenience. Nothing about this changes, just because you're the product.

Want to sell your services at a good price? Stop complaining that your offshore competitors are willing to charge less than you are.

Instead, start thinking of yourself as a business. Take a clear-eyed view of the competitive landscape and figure out what you have to offer that your offshore competitors don't, that justifies the higher price you want to charge.

Once you can clearly articulate the answer, you'll be in an excellent position to receive the salary you want. If you can't, you'd better think harder, because "That's what I want to earn," just isn't compelling logic for an employer looking for the best value.

- Bob