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About outsourcing

Has anyone ever considered to outsource to the inner states of the USA?

I mean I hear a lot of arguments about that US programmers can't compete with Indian saleries as life in India is way cheaper. And programmer saleries in SF and NY can't go down by much due to the cost of live.

But what if you would start an outsourcing company in lets say Alabama or Tennesee? You as a company hire unemployed NY,SF programmers and ask them to move to one of those states.

I think this how manufacturers did it. A lot of assembly work is in one of the not so doing well states that give you major tax breaks and a cheap housing/living cost for your workers.

somemorone
Tuesday, June 15, 2004

In India you can live like a king with $12000 per year.

Indian
Tuesday, June 15, 2004

Softward Development magazine did a story on this very thing in January. It was called "North Dakota: Is This Near-Shore Enough?"

http://www.sdmagazine.com/documents/s=9001/sdm0401c/sdm0401c.html

CF
Tuesday, June 15, 2004


>In India you can live like a king with $12000 per year.

Says who?

A more 'Indian' Indian aka "Pure Indian"
Tuesday, June 15, 2004

The reason why manufacturers built plants in certain Southern states was because of the following:

- cheaper labor than other parts of the U.S.
- no unions
- using your brain wasn't a requirement for many plant jobs
- out government sort of required certain industries to do so (i.e. although Japanese automakers chose to build some plants in the South they only did so because they didn't have much of a choice)


While I am not knocking your "cost of living" suggestion, you need to keep in mind that companies already have access to a "cheaper than an American" IT labor pool via body shops located throughout the United States. The practice of putting several bodies into one small apartment still occurs just not on the scale it once did.

One Programmer's Opinion
Tuesday, June 15, 2004

I wasn't aware there were masses of ultra cheap qualified developers lining the streets of Alabama and Tennesee. Thx!

Just me (Sir to you)
Tuesday, June 15, 2004

I know that Indian/Chinese are still cheaper but there must be some advantages for working with Americans not? Or else the whole IT industry would have been outsourced. But now you can also compete on cost.

<>keep in mind that companies already have access to a "cheaper than an American" IT labor pool via body shops located throughout the United States.<>

Are they legal? Anyway I'm not thinking of competing with sweatshops but with international outsourcing companies.

Also rural areas may be a better place to raise you kids.

somemorone
Tuesday, June 15, 2004

>> "You as a company hire unemployed NY,SF programmers and ask them to move to one of those states. "

Why in the hell would you bother moving people when there are already a gazillion qualified candidates in all 50 states even the "inner" states you speak of.  Let me guess you think the midwest is just a bunch of farms?  Think again.

Anon
Tuesday, June 15, 2004

Actually, TIAA-CREF moved their company headquarters from New York to Charlotte, and from friends who have applied with them, no one from New York wanted to move to Charlotte, so they are having a devil of a time hiring qualified programmers.

So, even if you did set up a company, you might have a hard time hiring New York programmers. And you might have a hard time hiring local programmers because you might not be able to find them. At least with factories you could train them on the job relatively rapidly. Not always the same in IT.

CF
Tuesday, June 15, 2004

Yes, by all means outsource to Tennessee.

We'll do software right for ya'll.

Actually, there is still a fair bit of tech support phone bank type jobs here in my area.  Verizon and Sprint both have call centers here, and I when I was a college freshman I worked for a company that handled tech support for IBM, AT&T and Prodigy (remember them?) dial up services along with credit card processing.  Supposedly we southerners are cheap and polite and all you yankees find our accents charmingly quant and tend not to yell at us as much as you would each other. Unfortunately, that hasn't seemed to really transform itself into a lot of the better paying tech jobs.

So, if anyone's ready to insource to the smoky mountains let me know, I know plenty of folks that are under employed.  And before you ask, yes most of us could get jobs somewhere else, but we don't want to.  We like it here.

Steve Barbour
Tuesday, June 15, 2004

Yep, ussuns down he-yah ain't got the edification you'uns in 'dem dare cities gots. Hell, you'uns prob'ly let yo nigrahs run 'round widout collahs!

I've never understood why so called educated, open minded individuals continue to foster the same sort of bigotry that they claim to decry in everyone else.

Rural America has a lot more to offer than produce. That being said, your overall point about the lack of suitable employees is valid.

Now if you need a computer programmer that can shoe a horse...

...you're still probably better off looking in the valley or NYC.

Robbie Walker
Tuesday, June 15, 2004

Are you telling me that there are people living in the middle of our continent?!?  I thought that between New York & L.A. there was just a huge parking lot.

anon
Tuesday, June 15, 2004

I wouldn't call Wilmington, NC (SE North Carolina) a high-tech meca but we do have some medium to large tech based companies here.

GE Aircraft Engines
GE Nuclear
Corning Fiber
3 Pharma R&D (PPD, AAI, Pharma)
Verizon Wireless Call Center
VisionAir - public safety software

Combine that with a lower then national average cost of living and location near on the Atlantic coast / Cape Fear River its a fairly attractive place to open up shop and live.

Not to metion a very low unemployment rate (3.4%)

Yo
Tuesday, June 15, 2004

Actually, there are plenty of qualified programmers here in the south.  We've had colleges for at least a decade now.  We got them right after they installed the 'lectricity.

As for TIAA CREF's issues...I might think about sending a resume (dammit, what ascii code is the accented e?) if I could get their careers page to open.  Looks like they really need a web admin.

It's also entirely possible that they aren't offering a decent rate for the Charlotte area.  Charlotte isn't a little town, and the cost of living there while lower than NY isn't as cheap as many other places.

Steve Barbour
Tuesday, June 15, 2004

Steve,

From what I've seen offered, TIAA-CREF is about comparable with the market rate here which is about $35 - $40 per hour (equivalent salary). Probably a huge drop from NY rates, but decent for here.

CF
Tuesday, June 15, 2004

Ah, well if they ever get their "JRun Connector Protocol Error" fixed I'll take a look and see what they're looking for.

Although frankly, $30 - $40 in Charlotte isn't terribly attractive.  With cost of living factored in that would be about the same earning power I have here in the sticks, but with a reduced quality of life.

Here, $30 - $40 would have people all over it, but cost of living here is pretty much non-existant. $20 -$30 is market average, but I've seen folks hired as low as $12.

Steve Barbour
Tuesday, June 15, 2004

My experience:

Programmers in rural midwest or mid-south locations will work like "bastards" - VERY hard, VERY long hours - for relatively low salaries or rates compared to coastal or tech belt locations. In flyover areas, most techies actually feel somewhat grateful to have ANY job that isn't bagging groceries or delivering pizzas. Underuse of smart people is a chronic problem in rural areas. There just aren't many places that a smart person can work out there.

The real "problem" with 'outsourcing' into the rural US, however, is corporate-cultural and technical-cultural. What you tend to find in flyover country are (generally) locally based employers who are used to a cheap blue collar wage scale, hiring locally, who accept the fact that their people have some myopia from limited exposure to diverse ways, and who are somewhat xenophobic and so actually prefer this. You don't often see some large corporation from Silicon Valley opening a location outside fashionable parts of the western states.

One big issue is that flyover country in the US and the big coastal cities don't generally trust or respect each other very much and a lot of that mutual contempt is bred by supposed familiarity.

IE: for whatever reason, a large corporation based in a large US city feels that it is getting "better value" outsourcing to supposedly better educated Indians 12,000 miles and 1/2 day's worth of time zones away, than it would if it outsourced to a team of programmers in, say, Arkansas, all of whom had BS degrees and all of whom were 50-75% cheaper than NYC metro based developers.

A lot of it is discussed locally in the form of cliches. IE: you can't trust New Yorkers. People in the mid south are undereducated and stupid. Etc. And what feeds this is some degree of reduced self-esteem on the part of flyover country residents combined with the opportunistic tendences you have to develop for survival's sake in the big city. Generally, people from big cities think disproportionately more of themselves than they should, while the reverse holds true for flyover country residents.

I do find some general unifying tendencies in each area, though. The main thing is this: people in rural areas are not waiting to make a windfall off some single opportunity, instead they expect their rewards to be incremental and gradual. Whereas developers in larger cities automatically think IPOs, partnerships, and big jumps in pay for relatively trivial contributions. This is interpreted as slowness and stupidity by the big city "types" but is a reflection of a more natural pace of life in rural areas.

Mainly, the reason that the mid-south, great plains, and midwest aren't exploited more for high-value labor is a series of snotty cultural prejudices. Presumed familiarity ("Green Acres" reruns, anyone?) breeds contempt. Few US citizens have been to India so execs will tend to believe whatever bullshit they're fed. Even representations of MIT graduate level expertise for $3/hr.

How's that?

Bored Bystander
Tuesday, June 15, 2004

That was great.  Now outsource all your development to us.

;-)

I don't know if it's spot on or not, but it fits with my experiences.  The funny thing is, is that in the town in which I'm working we have Eastman Chemical Company's world headquarters along with headquarters for a few other largish corps and still no respect.  Oh well, I knew all of this when I moved back here, so I don't really have any reason to grouse.

Alright, I feel the muse upon me.  I'm going back to work.

Steve Barbour
Tuesday, June 15, 2004

As a high tech worker who lives in Jackson, Mississippi, I can comment on this.  Cost of living is definately much lower in the south than NYC, Silicon Valley, and so on. 

The lifestyle is completely different - if you want to live in a place where pretty much everything is dominated by religion - and the Southern Baptist fundamentalist brand at that - this is the place for you!  The first question people will ask you when they meet you is not "and where do you work?", but "and what church do you go to?"

For those peopel use to the culture, facilities, and attitudes of a large, cosmopolitan city, expect a large dose of culture shock.

Ken Ray
Tuesday, June 15, 2004

I think the question is, why don't companies outsource work to remote parts of the US?

It doesn't mean that anyone from the outsourcing company *has* to relocate to Tupelo, Mississippi - just as they don't have to relocate to Mumbai.

I submit that big city business culture scorns and overlooks  the US bible belt due to presumed familiarity. No matter what the numbers or the worth ethic say.

Yet a *substantially* more backward and rural/agrarian culture in a remote country, one that is riddled with fundamental religious conflicts to a degree not seen anywhere in the US, is deemed more amenable to high tech development because people are supposedly smarter there.

Hypocrisy.

Bored Bystander
Tuesday, June 15, 2004

I live and work in Huntsville, Alabama. Average salaries here are only slightly less than Atlanta. Land is relatively cheap and property taxes are low.

DigDoug
Tuesday, June 15, 2004

> A lot of it is discussed locally in the form of cliches.
> ...
> people in rural areas are not waiting to make a windfall off some single opportunity, instead they expect their rewards to be incremental and gradual. Whereas developers in larger cities automatically think IPOs, partnerships, and big jumps in pay for relatively trivial contributions.

Thats not a cliche or over generalization?

ed
Tuesday, June 15, 2004

I've lived and worked in both types of areas. I've lived and worked on the east and west coasts.

The thing that happens in a metro area is that there is usually a fairly large community of developers and also of business types who supply their employment. So people working in this industry  will hear at times about an ordinary local developer who (for instance) lucked into a lucrative partnership or was offered equity, etc.

Whereas, in more rural locations, there may be exactly one or two companies in a 50 mile radius that have any tech jobs to speak of. With limited mobility and employers that aren't in abundance, there is a lot more likelihood that programmers will settle for "plain old jobs" with no upside.

Bored Bystander
Tuesday, June 15, 2004

"Yet a *substantially* more backward and rural/agrarian culture in a remote country, one that is riddled with fundamental religious conflicts to a degree not seen anywhere in the US, is deemed more amenable to high tech development because people are supposedly smarter there.

Hypocrisy."

Remember, the primary motivation for offshoring is not the actual saving of costs.  It is to create the *illusions* of savings in a manner that allows management to collect bigger bonuses.  Even if they can save more money by relocating to Idaho, they can still make the savings in India or China look bigger by hyping the smallness of Indian/Chinese salaries and keeping quiet about the hidden costs.

T. Norman
Tuesday, June 15, 2004

T. Norman - well, of course. That was my whole point, the hidden costs don't add up, so there is more to it than just how little someone works for.

Bored Bystander
Tuesday, June 15, 2004

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