CXO

Onshoring vs. offshoring is the wrong way to think about IT hiring

If you find yourself asking whether to shift your company's development activities onshore or offshore, you may be asking the wrong question.

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In IT, offshoring has become a loaded term. For some, it's a magical cure-all whereby high-quality developers can be acquired for pennies on the dollar compared to local talent. For others, offshoring is a borderline conspiracy to destroy high-end, local IT talent. IT leaders generally fall somewhere on this spectrum, and at some point in our careers most of us are faced with a decision on whether to outsource talent.

Separate location from quality

In many cases, discussions about offshoring vs. onshoring are really discussions about balancing quality and cost. While geography certainly factors into cost of living and salaries, the best talent commands rates commensurate with that talent regardless of where in the world it exists. IT work in particular can be performed half a world away; talented resources know this and charge what they're worth compared to resources around the world. Even if it were once true, the myth of PhDs in Computer Science charging sub-minimum wage rates has vanished. Whether it's a massive global firm making these promises, or your own HR department, resources with that level of talent are surely smart enough to realize what they're worth.

There are other benefits to geographic diversity. Augmenting local talent with resources in other locations can provide the legitimate and obvious benefit of driving productivity around the clock, or supporting multiple languages or technical environments. If these are the primary benefits you're seeking by considering offshoring, then your head is in the right place. However, if you believe the myth that offshoring is shorthand for the impossible promise of top talent at bargain-basement prices, then you're likely setting yourself up for future disappointment.

Onshoring isn't a panacea either

Just as location isn't a perfect indicator of talent or cost, deciding to source talent only onshore will not protect you from low-quality resources, or the myriad other issues that can arise when you bring on a new employee or contractor. Just as talent in far-flung geographies can provide certain advantages, so too can local resources that can regularly interact with key staff and provide "feet on the ground." For companies that struggle to integrate telecommuters a dozen miles outside town, keeping talent local may provide a better cultural and logistical fit than companies with decades of experience working with employees around the world.

Starting with location is backwards

In all but a few limited circumstances, starting your search for talent by making a binary decision between offshore and local talent is going about the decision backwards. Start with a clear understanding of what you're trying to accomplish by adding additional talent, and considering the skills and experience that would best fill that objective. Only when you have a clear understanding of what the new employee or contractor will do, and what skills are required, should you consider whether the role would best be served onshore or offshore. For some roles, skills and experience may be more important than location. Ideally, this role could also be performed remotely, allowing you to source talent from anywhere in the world.

As IT leaders, we've been conditioned to consider the location of our talent too early in the talent acquisition process, as if geography were the ultimate driver of cost and quality. As many IT leaders can attest, this is a misguided notion. Like hiring shortcuts ranging from certifications to personality tests, making assumptions about onshore versus offshore talent may seem attractive, but it's one shortcut that's ultimately doomed to fail.

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About Patrick Gray

Patrick Gray works for a global Fortune 500 consulting and IT services company and is the author of Breakthrough IT: Supercharging Organizational Value through Technology as well as the companion e-book The Breakthrough CIO's Companion. He has spent ...

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