Offshoring Popular? Think Again

If you think everyone’s outsourcing tech work these days, think again. In fact more enterprises than not are keeping IT work home, or at least close to home.

“It’s [offshore outsourcing] not happening as much as some people think. While there has been pretty good IT employment news for a while, this just adds to it,” Katherine Spencer Lee, executive director of Robert Half Technology (RHI), told

A new RHI survey polled 1,400 CIOs on offshore outsourcing and reported that 94 percent are not pushing IT work offshore, and 86 percent don’t plan to change that strategy for at least the next two years.

The survey reflects the first time RHI has polled CIOs on offshore efforts and does not include data on whether those same companies are outsourcing work to U.S. providers. A recent Gartner report indicates outsourcing overall is gaining greater traction.

According to Lee, the reasons companies aren’t going offshore are tied to several business factors. Companies are attaching greater value to building skill sets among staff, and the management headaches in overseeing outsourcing can be a huge deterrent, she explained.

[cob:Related_Articles]In fact, management headaches were the main reason cited by CIOs who went offshore and then brought the work back home.

“Language, culture and issues like time zone barriers can sometimes outweigh the potential benefits,” added Lee, acknowledging that larger companies often have an easier time dealing with outsourcing. “Smaller companies sometimes lack the resources to commit to an effective long-term offshoring strategy.”

According to the survey, the bigger the company the more likely outsourcing offshore happens. Of organizations with more than 500 employees, 11 percent of CIOs reported offshore outsourcing efforts.

“Researching viable vendors, and teaching them about the company and its products, management style and quality control require a substantial investment,” Lee said in a statement on the survey results. “Large companies may be better positioned to absorb the costs of both initial setup and ongoing oversight, and to benefit from economies of scale.”

If offshore outsourcing does take deeper root then growth will come from organizations already on the bandwagon. The study reports that 43 percent of CIOs involved in offshore outsourcing will boost efforts in the next two years compared with 13 percent who predict they’ll be pulling back on outsourcing efforts.

Lee believes stronger internal collaboration strategies may also be a reason why tech work is staying close to home. As IT professionals become more integrated with a company’s business strategy their skills sets are gaining in value, she said.

Yet that doesn’t mean hiring or finding the right skill sets is getting any easier for tech leaders.

“Right now CIOs are having a hard time finding skill sets they need, such as Web application experts — those skilled with MySQL, Flash, Ajax, and Web. 2.0,” she noted. “Those IT professionals who have kept up their skills and moved into the new areas are in great demand.”

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