Goodbye India Outsourcing, Hello Rural America Insourcing

[Yavin4]

Now, this is a brilliant, innovative alternative to overseas outsourcing which achieves the objectives of lowering costs, keeping jobs here in the U.S., and paying workers a good wage for the areas that they're living in:

Smaller towns need jobs, and they offer a cheaper cost of living than urban centers. So businesses that outsource work to these areas can expect to pay less -- rates are often as much as 25% to 50% lower -- than if they were hiring urbanites with comparable skills.


Meanwhile, CrossUSA in Burnsville, Minn., recruits experienced, older IT workers who are nearing retirement for its 100-employee operations in Sebeka, Minn., (population 700) and Eveleth, Minn., (population 3,000).

The draw for workers is the chance to make their money stretch as far as possible prior to retirement. "They're trying to figure out the best way to finish their careers, and some people want a small-town quality of life," says John Beasley, CrossUSA's director of business development.






http://money.cnn.com/2010/07/08/smallbusiness/rural_onshoring/index.htm

[Subdivisions]

1. I love this idea, BUT...

Though there is sure to be some 25% to 50% discount advantage, that's still WAYYYYY more than a person in India would cost.

I love the idea of small ITs locating in small towns. It is indeed a brilliant strategy in CrossUSA's case.

[Yavin4]

3. True, But Pay A Little More

And your projects have a smoother chance to completion. No language issues. No security issues. No massive time zone differences.

[DCBob]

5. +1

spot on.

[Dawson Leery]

6. True.

Northern Europe pays a little more in order to allow economic security for their societies.

[pipi_k]

7. Makes sense, but...

how many companies care about language and security issues, and time zone differences...

I mean, really care?


Especially, as it's becoming more and more common, when they're about the only game in town...



PS...I live in a rural area where the taxes are very high because there is almost NO business here. An IT center would be so cool, but I don't know if we'd ever be able to convince any company to do such a thing here.

[Yavin4]

12. In The Article, That Genome Company Cared

As would companies in healthcare, financial, national security, etc. would also care. Being able to speak to developers in your own language and in your own time zone can make a critical difference to a project's success.

If more and more companies do this, it would reverse the IT outsourcing to India trend that we've seen in the past 10 years.

[Dawson Leery]

2. Why not? Americans are the world's hardest workers.

Sure Americans are shortsighted and impatient, but lazy, NEVER!

[Brickbat]

4. Another IT company doing the same:

http://www.saturnsys.com/offshore-to-the-north-shore.aspx

[corpseratemedia]

8. my brain just melted from the good news

I'd forgotten what it was!

my s/o will look into this

[berni_mccoy]

9. Awesome. K&R

[leveymg]

10. Insourcing and Nearsourcing are the next wave in global services

The overall compliance costs for outsourcing companies that have significant numbers of foreign nationals working in the U.S. are becoming so high that there may soon be cost parity for IT firms that have a three-tier business model:

Lower-skilled technical work, such as basic programming, will continue to be done off-shore. That is unlikely to change, as these skills are plentiful worldwide and the work can be done virtually anywhere by a relatively large number of people in many countries. The conventional wisdom is that outsourcing lower-skilled operations has net benefit for U.S. companies, and there is no practical way (except imposing an elaborate national-origins certification and tariffs system) to penalize or prevent it.

Middle-skilled work and essential customer-service functions are likely to be near-sourced to North American locations, including rural U.S. offices. There is already a strong customer preference for native English-speakers, and this offers a competitive advantage. Most of the larger telecoms, for instance, have moved this function back to the U.S., to places like Oklahoma. The trend toward moving mid-level production work in the services industries to offshore locations continues. This is a problem for which there are few easy, workable answers offered on any side of the issue.

Highly-skilled IT R&D and applications will continue to be done on-site or at large corporate and university campuses in the U.S., Europe, Hong Kong and other choice locales. There's a strong preference by high-salary globally-mobile workers for attractive urban and high-end amenity locations in developed countries, including the U.S. That, also, is unlikely to change anytime soon.

If the U.S. finally gets smart, we'll offer incentives to start-ups so that smaller global firms -- which generate U.S. jobs and attract Foreign Direct Investment (FDI) -- can be established here.

[Yavin4]

11. Agile Software Development Is The Hottest Flavor

Basically, it means developing, testing, correcting, developing, etc. IOW, software development has to be done as rapidly as possible.

Having the development work located within your time zone and within your own language, provides an advantage that India cannot offer.

[leveymg]

16. Agile also has to include high quality, low hassle post-delivery product.

Works right, first-time, out of the box. That's also something we can do well here in the US.

[OneGrassRoot]

13. K&R and a request:

Anyone reading who finds other examples of this, please post here! This is really good news, IMHO. :hi:

[elehhhhna]

14. Lookie: housing is cheap in Eveleth MN...

http://realestate.overstock.com/real_estate/residential/location-Eveleth--MN/range-city

[a kennedy]

15. ah, dah......

IT JUST MAKES SENSE!!! but then, that's way to simple for some folks..... :eyes:

[Mimosa]

17. Thanks for this topic! n/t

[lumberjack_jeff]

18. I've been saying this for decades.

In 1980, fresh out of high school, I went to work as a draftsman for a contractor building a nuclear power plant in Satsop, WA. (which is where I grew up and is the definition of ruralsville - the Satsop Post office has like 50 boxes)

In 1984, construction was "mothballed" because it wasn't economically feasible. In 1996, they decided to terminate it. The decision to terminate construction was a trigger for the Energy Facilities Site Evaluation Council (EFSEC) to force the owner to return the site to its natural state. This would have been cost prohibitive and wasteful.

A coalition of local governments stepped in and proposed to Bonneville Power, EFSEC and the owner that if they were to give us the site and a few million in startup funds, we could turn it into an industrial park.

They agreed, and it was a big win for the community, but the jobs have been slow to arrive. At one time, there was a call center with 200+ employees, but that business has dried up.

http://www.satsop.com/

The rent is cheap, the people are skilled (and hungry) the area is beautiful and the infrastructure is unparalleled. I think the main reason that businesses haven't set up shop here is because it's hard to convince the CEO's wife that living beyond a 30-mile radius from the nearest Macy's is survivable.