IT jobs are easier to outsource than many other jobs who require physical presence. Yet, we are still earning a fairly decent salary and the outsourcing seems to have stopped at the lower end of the IT value chain. Why have we not been outsourced yet and will this change in the future?
This is why engineers who can communicate effectively make several times more money than engineers who can't.
If your client just views you as the person who writes a code function they need, it's pretty easy to outsource you. If your client views you as a trusted person who can take their requirements, work with them in a pleasant way to clear up any vagueness, and then recommend and deliver a technology solution that just fixes their problem ... your gold.
I was doing research at a large European bank that has a lot of development outsourced. The project management primarily located at their HQ in Europe while the development is mostly in India.
They have had to resort to moving over a fair few people from India to their HQ as the communication just doesn't work as well otherwise. There is simply no replacing face-to-face communication.
The Communication has the be incredibly specific when outsourcing, not to mention the time difference which carries another set of issues. Both contribute to communication issues, at which point it may simply be better to do it locally, or at least move contractors over from outsourcing location to your HQ.
Remote work is popular right now but the value of just being able to walk over to a colleague to discuss a problem should not be underestimated.
Outsourcing to a different country in a different time zone with entirely different management styles is asking for communication trouble.
A company built on remote work from the start seems to be more likely to succeed with remote work than one who has adopted it kind of ad hoc.
A stop gap method is getting the whole team together for a couple of weeks, so you get to match faces with voices and learn manners and habits of your overseas team members. This helps a lot with further communications.
Still, the amount of information you miss can be staggering - not just from decreased deliberate communication, but from not getting ambient information about your team members knowledge.
Which is actually one of the positive points of Open office spaces. Despite many engineers disliking them, they do force employees to communicate more.
There are of course other negative things about open office spaces but that is a big win.
Big spaces are ok if you can concentrate in the middle of the jungle and to casually chit chat to someone, but that's it.
Whether to outsource or not is an important strategic decision that depends on how important the task is to your core business, what kind of expertise you've got in house, and how well you can guarantee the quality of that expertise. But in the right circumstances, having this in your own company gives you more control at a lower cost than if you outsource it.
Then there's offshoring, of course, which is outsourcing to a cheaper country. This was popular 10 years ago because from a management perspective, because of the lower cost per hour, it seemed to be cheaper. But if it takes more time, you lose that advantage. Most companies have finally come to understand that offshoring means you import a big communication overhead, and you hand over quite a lot of control over the quality of the project to a party that is not always capable of delivering the quality you need. Fixing the mistakes takes a lot of time and money.
– Security: possible to do background checks on citizens of your own country, easier to hold them responsible, less chance of rogue employee, etc.
– Communication problems: both in terms of poor communication skills being more apparent in limited telecommuting communication channels, and cultural differences (different norms of subordination, etc.). Language barriers and time zone differences also go here.
– "Outsourcing" is a misnomer for what you describe, and has a poor reputation for a reason. Turns out hiring cheap incompetent sweatshop workers using an intermediary/broker is apparently not a good idea if you want a decent result. And quality workers are not as cheap as you'd expect in their home countries because they are a rare breed globally.
– Telecommuting on the other hand, by which I mean hiring individual contractors to work remotely, can work out pretty well if you do quality control in-house. It will surely become more popular.
I see that Europeans are now increasingly outsourcing more: likely driven by cost pressures.