Outsourcing Software Jobs

Topics: Computer, Software engineering, Unemployment Pages: 5 (1502 words) Published: April 6, 2013
Outsourcing Software Jobs

Outsourcing Software Jobs

For the past two decades, U.S. companies have been experiencing an era of tremendous economical growth, largely due to the rapid developments in technology. Consequently, to ensure survival in a capitalistic market, U.S. companies have tried to keep pace with technological changes and competitive pressures by various means, including outsourcing software jobs. With increasing competition both domestically and internationally, U.S. companies have sent many software jobs outside the United States. This paper focuses on the outsourcing of jobs and analyzes the "Global Workforce" a growing trend among U.S. companies to not only do business globally, but also employ people globally. Trends in Outsourcing Jobs

The Internet glory years as we closed the decade could not get enough of software engineers. New graduates from American colleges and universities found themselves having multiple job offers even before graduation. Today, that phenomenon is long gone. The degradation of the U.S. economy, the lack of supply of new American engineering graduates, and the positive impacts of outsourcing have forced U.S. companies to look overseas to enhance company talent and maximize cost efficiency. Many studies have shown that U.S. companies, especially the high-tech industry, have been outsourcing jobs overseas to countries such as India and China. For instance, IBM, the largest computer company in the world, announced that they would move up to 4,730 programmers from U.S. to India (Sayer, 2003). According to a November 2003 report by the American Electronics Association, the United States lost 540,000 jobs in the high-tech industry in 2002 (Platzer, 2003). The software sector experienced a job loss total of 150,000. Additionally, the number of software employees in the U.S. will eventually be matched by other countries. Andy Grove, Chairman and Former CEO of Intel, once predicted that by 2010, India may have the same number of software and service employees as the U.S. (Grove, 2003).

In addition, the infrastructure to support these trends show that communication between the U.S. and other countries is virtually free. This means the overhead of information transfer is almost non-existent, a very enticing factor for companies to consider outsourcing.

Moving forward, statistics show that 1 in 10 U.S. technology jobs will go overseas by the end of 2004, and in the next 15 years, more than 3 million U.S. white-collar jobs will be outsourced, representing $136 billion in lost wages, according to Forrester Research (Pink, 2004) Supporters and Opponents of the Trends

Many of the largest U.S. high-tech corporations such as Microsoft, IBM, Dell, and HP have found that software jobs in the U.S. can be performed by other engineers abroad for lower wages for the same quality of work. By doing so, these companies believe outsourcing lowers its overall operating costs, thus maximizing its return on investments and earnings. For these companies, it makes the best business sense to get the productivity at a lower cost. Furthermore, U.S. companies that outsource feel that by hiring a global workforce, the company reflects the world's best talent.

In contrast, advocates against outsourcing believe otherwise. It does not benefit the U.S. economy, the workers abroad are exploited, and outsourcing is simply un-patriotic if there is adequate supply of American engineers. In addition, there are also privacy issues of overseas workers handling "American" data. These advocates argue that American software professionals continue to lose their jobs, new American graduates are struggling to find jobs, and the U.S. economy continues to lag despite the trends.

Another main ethical issue is patriotism. Supporters against outsourcing believe there is already a good supply of software professionals and new college graduates in the U.S. Looking elsewhere and outsourcing jobs is...
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