Outsourcing and IT

The recent economic challenges that the United States and the rest of the world is facing has effected more than the loss of jobs.  Organizations that were dependent on Indian community out sourcing are now faced with a new dilemma, inferior talent.

About 60% of India’s IT outsourcing business comes from the United States and 40% of the work is in the banking, insurance and financial service sectors.  To ensure that they can maintain or at least keep pace with the downturn, these firms are taking steps to protect themselves from the problem.  One of the first steps they are taking comes in the form of reduced hiring of entry-level engineers and looking at second-tier cities with lower labor costs.  The Washington Post recently published an article on the effects of the economic downturn and the steps that the Indian community it taking to combat the downturn.

The outsourcing of IT has been driven by the insatiable appetite of the United States that will continue to drive the practice in hopes of reducing headcount.  A word of caution would be advisable for the future.  If outsourcing means getting second and third-tier resources what will that do for an organization that is seeking a competitive advantage?  Clearly it will be hard to justify the economic benefits of untested staffers.

My organization, STAR BASE Consulting, Inc., tests and pre-screens every candidate that we place.  We believe that a poor candidate is a reflection on our firm.  My suggestion is that regardless of which firm your organization uses to produce IT staffing, do not choose a firm that does not test and who does not pre-screen.  In this day and age of identity theft it appears easy for a person to represent themselves as someone they are not. 

Do you want to risk the success of your projects and the reputation of your IT department to an organization that promises more with less?