Is outsourcing (offshoring) disloyal? [closed]

Question

I ask this from everyone's perspective. If you are in America and you outsource to offshore programmers, are you disloyal to your countrymen? If you are in India and you outsource to offshore programmers, are you disloyal to your countrymen? This question applies to all programmers and people in a position to hire programmers.

I happen to be American, and so for me this means outsourcing to other countries like India and Mexico. With unemployment so high here at home, am I being disloyal to my fellow programmers, my countrymen, by outsourcing to other countries?

This is a real dillema for me. Yes, either way I am providing for someone's family (either the American's or the Indian's). But if I outsource to offshore programmers, am I contributing to the problems here at home?

As my business grows, hiring questions like this are becoming more urgent for me to figure out. I want to do the right thing.

Also note that this question is NOT asking "Is outsourcing effective". This question is "all things being equally effective, is it disloyal" . . .

Also note that disloyal might not be the best word, but you get my meaning. Feel free to edit or make suggestions to make this question better.

Answer 1

Use the Right Tool for the Job

Loyalty and patriotism are irrelevant - and be suspicious of people that use such arguments to get you to change your business decisions, chances are they are just trying to sell you something!

My company does not offshore. Not because there aren't fantastic programmers in other countries, but because we prefer to 'keep it local' as much as possible, for three reasons:

1. less of a culture/communication/time gap

2. provides experience so that today's entry-level programmers can get the experience to become tomorrow's senior developers

3. convinced that the cost "savings" of offshoring are illusions

Answer 2

"Patriotism is your conviction that this country is superior to all others because you were born in it" - George Bernard Shaw

People are people and people starving in India should be no worse or better than anywhere else. If your company fails because your not going with the best option you're not helping anyone. If the options are equal feel free to go ahead and use the one that feels best.

Answer 3

Tough question. Luckily I'm not in a position where I have to make such decisions.

To me the country I live in (Germany) has only a very abstract, nearly virtual meaning. It's borders where historically created by a series of random events, more often than not based on the decision of one robber (later to be called aristocrats) to invade his neighbor. So my patriotism is very limited and I see such things in a very pragmatic way.

There is an economical system in which I work and I have of course a personal interest to keep this system stable. So hiring workers locally instead of outsourcing will help with that. But as much as there is a German economy or an European economy, there is a world economy as well and we have seen often enough now, that no country can successfully isolate itself from worldwide events. If we want our children to live in peace, we must provide a stable economy worldwide anyway.

On the other side if somebody is responsible for a company, he is responsible for the financial decisions he makes. Outsourcing (assuming, as you say, all things are equal) will save some resources for this company. That way it may make the already existing jobs of your colleagues and employees safer and may even allow to hire new people locally later on. So the positive results of saving money should have enough positive local results to balance the overall outcome even if you have a more patriotic view than I have.

Answer 4

First of all, you deserve a lot of credit for even considering this. Sadly, I know a lot of people would just think in terms of profit and consider ethics and affect on society as a secondary factor.

That said,

I do not believe that it is disloyal to outsource. In fact the threat of outsourcing increases the competition and drive in workers.

Furthermore, by outsourcing you are helping to benefit the company by getting tasks done more cheaply. A profitable company means you can hire more FULL time employees from your own nation. Thus being loyal.

It is good for the country you outsource to:

most countries that have work outsourced to them are poor and thus really benefit from the jobs.

Answer 5

Offshoring is not limited to the IT industry alone Richard.Its present in all fields and this is something that we cannot ignore. Its a dog eats dog world and for us to survive, sometimes we have to take decisions that are hard to digest. A guilt trip will not get us nowhere! But I understand your predicament. From what I understand, companies keep a set of developers/analysts/managers since they understand the business and offshore most of the development work. So this way, you do your bit for your people and at the same time you can reap the benefits.
There is another intersting aspect to this whole offshoring business. I'll take the liberty to share it here. All the money actually comes back to you guys. I'm from India and almost 70-80% of my wardrobe, most of the stuff at home are all from companies in America or other countries. You'll also find most of the companies have set up shop here. So I guess its a win-win!

Answer 6

It's possible for it all to work out good for everyone. If outsourcing is done effectively, then of course it helps some family in a faraway land. It would allow you to reduce the price of your product. If it's the kind of product in the kind of market where a small reduction in price leads to a marvelous increase in sales, your company will earn more money and so you and your employees are better off, and your customers are happy to find a good product at an acceptable price point. A win-win-win-win (you, the Indian coders, your employees, your customers) situation.

In a simple-minded way, that could be considered loyal. But loyalty is a more complex idea, and is more a matter of intent, passion, and goals of well-being for others, and less so a matter of how things actually work out.

Now, in real life, just how likely are all these factors? I've heard that on occasion an outsourcing process doesn't work out. Sometimes, oh it's rare, but maybe a reduction in production costs doesn't lead to a proportional reduction in cost to the consumer. And believe it or not, demand curves in real life aren't always the nice smooth curves in economics textbooks.

Actually, a totally win-win-win-win situation isn't likely. I'm not enough of a business economist to give any odds, but for sure it's a gamble.

If you have the business/marketing/technical/outsourcing skills, talented people, the right market and you as an experienced businessperson are confident, through logic and gut intuition, of win-win-win-win then sure, you have a good case for being considered loyal.

OTOH if you don't have accurate forecasts, market data, previous outsourcing leadership experience, etc and it takes some guessing and hoping, you are gambling, at least in some sense, and experimenting to find a way to make better profit, or at least avoid losses. Sure, that's how most business is done all around the world - we humans are inherently ignorant. A case could be made equally well either way, loyal or disloyal, depending on perceptions of intent and probability of success.

Where the dividing line is can be ascertained by considering examples. Money-grubbing moves by a business owner to enhance their own take, without passing any of the benefits of increased sales to the employees, would be disloyal. Honestly trying to keep the business going and customers and employees happy in face of uncertain markets, is loyal.

Answer 7

Yes, it is disloyal. However, it's excusable if you are not "gaming the system" by only offshoring to hire cheap foreign workers instead of paying a reasonable wage for local talent. There is nothing inherently wrong with offshoring; the problem is that corporations have turned to offshoring only to avoid paying decent wages - that is disloyal.

If you offshore because you get the better service or support or whatever, that's fine. However, if you offshore only because you can pay five programmers in India $10/hour instead of paying five programmers local to you $35/hour, then you're disloyal.

Answer 8

There is another point of view here. Only working people pay taxes, and when you employ someone from another country, that country is at loss. THAT country most probably had to pay certain amount for his education. You are therefore doing good for your country by bringing in already educated workers.

My country (Slovenia) is paying almost everything for me. Studying is for free, they provide campus (kind of) where i live for only 100€/month and they even pay a certain amount for food we eat in restaurants. Yeah, it's heaven.

So, if i went to work to let's say United States after i finished university, you wouldn't be really disloyal since you did good for your country, but i would be, since my country invested in me, and they didn't get anything in return.

Answer 9

Outsourcing can be cheaper, but it is very much a you-get-what-you-pay-for market. To find devs that will consistantly put forth the same quality as an average $60k dev in the states (average salary in the Midwest) will cost ~ $60k overseas. If you hire one for $10/hr you will very much get $10/hr code. Outsource the things you don't want to do, and there are plenty of local 'outsourcing' companies.

Answer 10

Loyalty is a two-way street. You should also consider which group of employees is more likely to be loyal to your company.

Roughly 5 to 10 years ago my previous employer began outsourcing software development to India because the salaries were much lower than in the U.S. We brought a group of 4 or 5 employees from India to the U.S. for several weeks so we could train them on the software and bring them up to speed on the details of the code. About three months after they returned to India, one of them began receiving a lot of pressure from his family to quit the software job and return home to run the cotton mill so his grandfather could retire. His manager (in India) advised him to help his family.

I heard reports of other companies having a hard time keeping employees in India because the workers could job-hop to get substantial raises.

Note that I'm not trying to trash India or Indian workers, I'm just sharing actual experiences that demonstrate the business cost of offshoring can be hard to predict.

Answer 11

I think there are two points:

• In the eyes of the ones you are trying to outsource it is certainly a sort of disrespect or something alike.

• But what about your other employees? I assume you are not going to outsource everyone. So when you can save other jobs with outsourcing some of your employees, it might be the better solution.

Answer 12

I believe outsourcing only works well with big to medium sized companies as managing someone 10000miles away is also a costly thing and then dealing with other issues such as renting real estate and dealing with a completely different system altogether. So rather than worrying about disloyalty maybe you sould if it is beneficial to set up a facility in another part of the world.

Answer 13

It sounds like what your question is, is what is the best way for you to organise your companies work to maximise its benefit to your country.

On a wider scale work per se is meaningless to a country. What is important is the added value that that work brings, e.g. digging and refiling holes is work, but it brings no value. Following this line of thought countries should focus on the activities they are capable of undertaking which bring the maximum value. So according to this outsourcing developmenty work is fine as it frees up locals to work on higher value activities. The crunch comes if there are no higher value activities for the replaced workers to move to, or they lack the skills to do so. Meaning they move to lower value ones, which has been a problem in some industries and is normally where the outcry about shipping jobs overseas happens. This situation can still be a plus to the country though as the money saved will remain in the local ecomonmy and be recycled into other possibly more useful areas.

Answer 14

Let me address this as an American. There are LOTS of jobs for developers in the US. The problem is we do not either want them, are not willing to move to where they are, or have the skills needed for them. This is beyond programming skills. What is really in demand are programmers who can be professional and work effectively in a business enviroment, deal with existing drama, and not create to much new drama.

If you do not fit into that package there are still jobs out there but you have to be willing to move and accept pay that is probably less than the top tier. Only 10% of all developers can make money in the top 10% bracket. That does not mean that the lower 90% is bad money it is not. It may not be what you were used to in the .com days and pre2k8 economic implosion but they reasonable and will provide a comfortable living if you pair back your life style.

But it seems that we have forgotten that sometimes to get going forward again we need to take a step back and sacrifice. So a number of these jobs go offshore. And once they are offshore its hard to get them back here. The reason is they will work really hard, and bend over backwards to keep their customers happy. I think we have forgotten how to do this too.

Answer 15

Disloyal - maybe (loyal means you had a binding/relation to the persons, so when you are in a company you are disloyal when they get fired, on a country level you could it consider disloyal when offshoring. But if you get real: What have you in common with the rest of the 100 million people in your country besides the flag).

What I would consider more interesting in the ethic aspect (I leave the commercial point out, already enough people pointed out that is most often far more expensive than the first figure):

Do you really help them when you hire them? What see, is that either the offshored workers does not see much more than the usual salary (e.g. children make T-Shirts), or just a small group (I.E. the programmers) get over average money. Both leads in the poor country to just widens the gap between the (great) poor group and the (small) rich group. So in my eyes you dont do the other country a favor when offshoring.