IT Outsourcing and the "Unemployable" US Tech Professional

Tuesday Apr 20th 2010 by James Maguire
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Does the rise of IT outsourcing threaten American tech professionals? What's perception and what's reality in this highly charged issue?

American dominance of technology continues unabated, as giants like Microsoft, Google and IBM shape the landscape with big ideas and big dollars. Yet one species in this thriving landscape is clearly beleaguered: the American IT worker.

His challenges are numerous. A brutal recession makes hollowed-out companies hesitant to hire. Wages are stagnant. Well-educated H1B visa holders are happy to work for less. A multi-year trend toward IT outsourcing means emerging market talent is just an email away.

Worst of all, word on the street is that US IT workers aren't keeping up with the global competition. The stereotypes, regardless of truth, have gained a degree of cultural credence.

The US tech professional is (according to lore) educated in a dysfunctional school system and distracted by an indulgent American lifestyle (March Madness betting pool, anyone?). In contrast, his Third World counterpart (probably Indian) lives to work and focuses like a laserbeam on his training – which never stops.

A remark by Vineet Nayar, CEO of Indian outsourcer HCL Technologies, encapsulated this attitude. Speaking in New York City in 2009, he opined that the majority of US college grads are “unemployable.” They’re focused only on getting rich, and have less patience than their global counterparts on learning critical IT processes.

His attitude is echoed from within the US. Robert Dewar, a professor emeritus in Computer Science at New York University, told me in 2008 that college CS programs have been dumbed down to the point that graduates are essentially incompetent. Bjarne Stroustrup, designer of the C++ language and a professor at Texas A&M University, said to me that he’s heard of employers – from Microsoft to Apple to IBM – bemoaning the poor quality of CS grads.

If you were the worrying type, you might think these negative perceptions and the IT outsourcing trend places American tech professionals on eroding ground. But tech outsourcing is an emotionally charged issue, touching upon combustibles like national identity and job stability. What’s perception and what’s reality?

IT Outsourcing (And Differences of Opinion)

Robin Borough, EVP of Omnikron Systems, an IT consultancy for Fortune 500 companies, is often involved with hiring decisions, typically for applicants with 5+ years experience. Yet she has frequent contact with college grads and strongly disagrees with the assessment that they’re lacking.

‘These guys were so sharp, and so eager and well mannered – they were phenomenal,” she says, of the tech students she knows from Penn State, CalTech and other top schools. “I’m not finding an attitude of entitlement.” She sees these new grads as socially conscious. “They have no desire to make money – they all want to save the world.” Many are learning foreign languages to enable international careers.

Her positive experience, however, is not universally shared. “I have a very good friend and a longstanding client [an IT employer] who is continually frustrated,” says Bob Lewis, president of IT Catalysts, a consultancy that deals with hiring and other IT issues.

“Most of the people he interviews don’t seem to want to work very hard and seem to be far too open about their career aspirations compared to what they can do for him.”

These candidates’ problem may less a matter of actual ability and more a case of projecting a less-than-stellar attitude. And this lackluster spirit may reflect an undeniable reality: Today’s grads are all too aware of the job market’s limitations.

“When those of us in senior management were growing up, the standard model was: One employer for your career, the employer showed loyalty to employees, which was reciprocated.” Those days are forever gone. Mergers and acquisitions, reorganizations, downsizing – today’s IT professional navigates an exhausting churn.

Lewis once even heard a CEO baldly state, “All of our employees need to understand that from here on in, they’re fungible commodities.” So much for employer loyalty.

For a young IT job candidate to muster an attitude of humility and gratitude in this atmosphere can be hard.

“I think a lot of the hiring managers resent that because, frankly, they’re less realistic than the people they’re hiring.” These managers are unwilling to admit that even today’s “permanent” jobs may be short or mid-term engagements.

“Members of this generation have a far more accurate picture of the nature of the work place, that no one is going to look out for their interests other than them,” he says. “What they haven’t learned is how to disguise that so that they can have an effective interview.” He’s even heard horror stories of young job applicants demanding, “Here’s what I want you to do for me.”

However, what some perceive as a weakness in young applicants may actually be a strength, says Nick Corcodilos, a longtime IT headhunter and owner of Ask The Headhunter.

“Maybe a lot of our new grads tend to be entrepreneurs, and so interested in creating something new that they’re not going to want to fool around with the nitty gritty,” he says.

“But I think a lot of overseas students are so focused on the nitty-gritty, and they grow up in cultures that are not so entrepreneurial, they’re a lot more willing to do the grunt work. But does that say that our grads aren’t employable?”

Next Page: The Cowboy Attitude

The Cowboy Attitude

What about the most damning perception of US tech grads, and US tech pros in general: Are they indeed lagging behind the international competition?

“I think there’s a pretty strong sense of that,” Lewis says. “Of course a lot of this is, folks abroad have lower expectations. They expect to work more hours for less pay. Whereas folks here look at the ultra-wealthy and think, ‘Why not me?’”

This perception may not match the reality. “I suspect that, once on the job, American tech grads will work just as hard, produce code that’s just as good, with maybe a little bit more of a cowboy attitude,” Lewis says. Cowboy, in this sense, meaning freely inventive rather than submerged in a strict team approach.

This cowboy ethic casts the tech hiring question in a new light. While Vineet Nayar of HCL may think of American grads as unemployable, his firm may in fact be a poor option for US developers.

“The entire conversation is apples and oranges as to whether or not an American developer would work out well in HCL. Probably not – HCL is far more regimented,” Lewis says. “Americans don’t generally deal well with regimentation. I tend to think of it as one of our cultural virtues.”

For offshore outsourcers, their development model’s sheer predictability – the exact opposite of the “cowboy” mode – is central to their sales pitch.

In contrast, “If you are an [American-based] employee programmer, you’re more likely doing Agile development, you’re doing Scrum, you’re doing high interactivity stuff where the quality is just a quarter of the story,” he says. “Your ability to interact with other human beings to understand what they need is a bigger part of the story. So it’s fundamentally different.”

Mature IT Pros vs. H1B Tech Workers

Foreign-born tech experts with H1B visas have long been viewed as competent and inexpensive alternatives to American talent. But Borough says that over the last 5-7 years, companies have changed their view on this group.

“We used to hire lots and lots of contractors with a visa, no problem. We were never going to hire them permanently, we wanted them to do a job,” she says. “This is really dominant on the East Coast, in the insurance, banking and healthcare sector.”

Tech employers are now shying away from this, Borough says, because sheparding foreign workers through the Byzantine green card process is just too expensive and time consuming.

This isn’t, however, good news for American IT staff. “More and more of my customers are outsourcing to third parties in India, Argentina, and Manila. They would prefer to outsource than hire H1B candidates here.”

There is a ray of hope for US IT staff. As the recession’s deepest dip recedes, firms are now willing to consider permanent, domestically-based hires. “It’s not contract – they want one perfect guy to add back to the team,” Borough says. Because of the tight job market, that one hire “has to be exceptional, has to be almost walking on water.” As the economy keeps improving, a cohort of contractors will then be hired; only after that cycle is completed will more fulltime staff be brought on board.

When that long awaited period of fulltime hiring happens, will it favor the American-born IT professional, those with years on the job?

Again, a nagging perception challenges these US staffers.

The [Indian] folks came over with more training, with more education,” Borough says. “The education system in India is amazing, and it is in their deep, deep value system that education and intelligence is the top value, not money.” These immigrants “kept a good work ethic, and they did not overspend. Therefore they’re not overpriced in the market.”

In contrast, “My 35- to 45-year-old homegrown American citizens have settled in, and they haven’t continued their learning,” she says. Not that there’s any problem with their work ethic. “They do work, they’re working a good 10 plus hours a day – some more than that, since we’re all virtual now.” Yet they’re burdened by the classic hyper-busy American lifestyle, including kids’ sporting events (practically a “part time job,” she notes) and countless other obligations. “They’re not going on for their advanced degrees or reapplying themselves as a whole into recertification – until they get unemployed.”

Their Indian counterpart has somehow been able to continue his education even while churning through a marathon work week. “I believe they stayed curious all the way through and I don’t believe they got themselves so wrapped up into the culture,” Borough says.

Of course, as Borough conceded, any comparison of American and Indian IT staff resident in the US must acknowledge a key demographic trend. Indian-born tech pros who immigrate to the US tend to be among the most professionally advanced in a country of one billion people. Only the better Indian IT workers tend to make it to this country. So comparing these elite staffers with the general US tech workforce is necessarily limited.

IT Outsourcing, Everywhere

The point, ultimately, isn’t that one group or another dominates the IT job market. It’s that the market over the last ten years has changed profoundly and is now fully international. That means that the American educational system must operate at a higher level if the US is to keep up. It also means that for those workers already in the IT workforce, the global footrace runs a little faster every year.

Workers in New York compete with workers in New Delhi. IT pros in downtown Chicago must be ready and able to work (virtually) with staffers in Poland or Vietnam or Manila.

“Every American – no matter what their field -– needs to understand that they are competing in a global labor market place,” Lewis says. “I suspect that most Americans entering the work force now haven’t completely figured that out.”

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