As comments from readers on some of the posts on this site prove, at least some seasoned IT pros see low-cost overseas labor as a serious threat to their future career prospects. Here’s a comment from smg71 on a post IT Business Edge contributor Don Tennant wrote about the NBC comedy “Outsourced”:

The issue with this “comedy” is simple. When you have 15 million people who have been displaced due to outsourcing and the overuse of H1B visas you don’t rub it in their faces with a “comedy.” People don’t find a situation that has caused them to lose their dignity due to having to be put on food stamps and welfare amusing. I’m not running around burning the Indian flag, that’s kind of stupid overall, but to pretend that this show isn’t offensive is foolish and uninformed. Yes, I was unemployed for 15 months due to outsourcing, I looked every day for work to find out government contracts were given to American based companies that then took the jobs and shipped them overseas. I did find work eventually. …

Check out highlights from Rural Sourcing Inc. CEO Monty Hamilton’s presentation at the 2010 Outsourcing World Summit.

But do IT pros feel similarly threatened by workers in the rural United States, who are willing to work for far less money? If so, is it OK if they lose their jobs to Americans rather than folks from other countries?

Back in August I wrote about how rural onshore outsourcing could be a great fit for some U.S. companies, as an alternative to offshoring. But what about the folks working for those outsourcing companies? Do they benefit as well?

A recent InfoWorld article asked the question “Is your future in IT a job in the boonies?” and offered the examples of several experienced IT pros who had relocated to rural areas to find employment. Outsourcing providers with operations in rural areas often pay experienced employees 30 to 40 percent less than what they earned in a prior IT job, the article notes.

In some cases, that’s offset by lower living expenses – but not always. Jerry Jensen, who works as a team leader for CrossUSA, says some costs like groceries are actually higher in rural areas. Jensen describes lifestyle adjustments such as clipping coupons and shopping sales. Another CrossUSA employee mentions that he’s already saved enough for a comfortable retirement so was willing to take a pay cut.

According to the article, CrossUSA “generally recruits older, experienced workers approaching retirement.” (Guess that’s one way of using age discrimination in IT to your advantage.)

Rural outsourcing providers also recruit young workers willing to work for lower salaries than more experienced IT pros. The article mentions Alex Ross, a senior technologist with Onshore Technology Services, who “was working as a fry cook at a KFC restaurant before joining the outsourcing firm five years ago.” He now develops coding standards and best practices, leads group training courses, develops pilot projects for new clients and mentors other technology employees.

Tennant recently wrote a post about his interview with the SVP of skills certification at CompTIA, who said high school dropouts with IT certifications may make good job candidates. This is certainly true of some dropouts and presents a great opportunity for them, but that doesn’t change the fact that one result of dropouts entering IT may be a reduction in salaries.

The article does mention that rural outsourcing companies give both rookie and veteran IT pros opportunities to work with a variety of technologies. The same cannot be said for some other IT employers, who seem unwilling to consider hiring folks who don’t possess specific skill sets. A reader named Scott M. commented on another of Tennant’s posts about IT employment Catch-22s. After noting he was an IT contractor familiar with a wide variety of platforms, he wrote:

In the past, all I had to do was to learn a new language and I could leverage my past experience to move to a newer technology. Unfortunately, software development has become such a commodity that most companies are now demanding experience in a particular skill. This means that it has been almost impossible to move to newer technologies, as they are demanding experience with it. Entry-level positions are almost a thing of the past, and most companies do not allow mentoring anymore. It has gotten so bad that some firms will not even tolerate a two week layover time to learn their system software and methodologies.

Perhaps rural outsourcing companies can provide the kinds of training opportunities that will open up more employment options for IT pros.

Source:http://www.itbusinessedge.com/cm/blogs/all/rural-outsourcings-impact-on-it-employment/?cs=43854

Corn isn’t the only thing they’re growing in rural America. There’s also an abundance of IT talent waiting to be harvested. Increasingly, companies large and small are finding they don’t have to go offshore to find IT employees at reasonable costs. Rural sourcing lets them hire the talent they need in their own backyards.

Rural sourcing is a fancy name for what is, in essence, domestic labor arbitrage— sending jobs from high-wage areas to areas where salaries are lower. Also known as “rural outsourcing” and “onshoring,” rural sourcing farms out IT work, such as software development, to parts of the United States where wages are lower than the total cost of shipping jobs overseas.

Businesses that outsource jobs to workers in rural areas find they can achieve a savings of 30 percent to 60 percent from what they would have to pay workers in major U.S. metropolitan areas.

“Rural sourcing offers cost, marketing, language and cultural benefits, making it an attractive alternative to offshore and other onshore models for some organizations,” according to a recent study by Gartner, an IT research and advisory company.

The concept is gaining traction with U.S. companies. Nearly two-thirds of chief financial officers at technology businesses say they’ll outsource services or manufacturing this year, but more plan to outsource in the U.S. rather than abroad. A survey by accounting and consulting firm BDO Seidman LLP showed that 22 percent of CFOs say the United States is the outsourcing destination they were most likely to consider last year, compared with 16 percent for China and 13 percent for India.

One of the pioneers in rural sourcing is the fittingly named Rural Sourcing Inc., based in Atlanta. Its strategy is to open its centers in midsize cities near colleges and universities that have a concentration of workers with IT skills.

“We look for places where there is a low cost of life and a high quality of living,” Monty Hamilton, Rural Sourcing’s CEO, told BusinessNewsDaily.

Rural Sourcing, founded in 2004, employs 70 people, the majority of whom are in Jonesboro, Ark. The company has another center in North Carolina and is in the process of finalizing the location of a third center scheduled to open in October. Clients include such marquee names as Glaxo SmithKline, Harte-Hanks and R.J. Reynolds.

Win-win situation

This approach is beneficial both for the companies that turn to rural sourcing and for the communities that provide the workers. For companies, it’s an economic and competitive advantage.

For the communities, it’s a new lease on life and the ability to retain talented workers. Much has been written about the “brain drain” affecting rural America. Students graduate from colleges and universities in these areas but can’t find work in their fields. Feeling marginalized, they are frequently forced to move to larger metropolitan areas to find work. Rural sourcing gives these workers the opportunity to stay where they are in an area with a high standard of living and make a decent salary in their chosen career.

“We take the work that’s out there and give people an opportunity to not move away,” Hamilton said. “I’m very excited about the potential. It’s a wonderful win-win situation.”

The cost advantages of rural sourcing compared with hiring talent in high-cost metropolitan areas are transparent. Not so transparent are rural sourcing’s advantages over historically low-cost offshoring centers in the $60 billion outsourcing industry such as India and China. How does Rural Sourcing stack up?

“We are certainly in a competitive price position when you factor in the hidden overhead of offshoring,” Hamilton said.

Cheaper than going offshore

Those costs, he said, often get lost in the translation. That hidden overhead includes such things as cultural dissonance, language problems, the cost of transportation and supervision, lack of understanding of American business practices and the inevitable problems that come from trying to communicate and coordinate across multiple time zones.

When those costs are factored in, Hamilton said, rural sourcing offers a very competitive total cost of ownership (TCO). TCO is the universal standard for looking at costs in the software world.

Hamilton hopes to continue to expand his company. It is currently profitable and is experiencing an annual growth rate of 300 percent.

“We hope to be able to cover all U.S. geographies,” Hamilton said. “The toughest one is the Northeast. There’s a great talent base and high quality of life, but it still has a high cost of living.”

If the fledgling rural sourcing industry could capture 10 percent of the jobs currently being sent offshore, Hamilton said, it could keep 50,000 to 60,000 people employed in this country. His company’s goal is to open 30 centers and create 3,000 new U.S. IT jobs.

Source:http://www.businessnewsdaily.com/onshoring-it-jobs-small-businesses-0571/a