Sep 12, 2012

Does GM's reversal of IT outsourcing indicative of a wider trend?

General Motors is doing something that I didn't expect; ending IT outsourcing and opening four new IT centers in the US. This means hundreds of IT jobs in the near future, and could mean multiples of that further down the road. Is this an outlier event, or is this part of a larger trend to move away from outsourcing IT (many times to other countries) and instead bringing it back under the roof here in the USA? I obviously hope so!


I think that it is a little to early to proclaim the end of IT outsourcing, but I think that GM's move probably does indicate the start of a trend reversing the outsourcing trend.  For one, having IT back in-house gives the company greater control, which is pretty much always a positive.  In addition, the cost of outsourcing, whether to India, China or the Philippines (the major destinations of former US jobs), is going to trend towards more expensive, while the cost in the US is more likely to stay stable.  Another point, which is frankly a reflection of my own bias, is that American companies SHOULD employee American workers where possible.  I attended a well-known private university for grad school (new ACC member - hint, hint), and literally 50% of the grad students were foreign students that were attending gratis while I had to pay tens of thousands per year.  Almost all of them intended to return to their native country, so we subsidized people who would be competing for the same positions as US students, while charging the American students tuition that resulted in massive debts.  My student loan payment is more than my house payment...how am I supposed to work at a competitive wage vis a vis someone who has zero student debt thanks to their not being required to pay tuition?  I'm all for intentional students, don't get me wrong, but I think the playing field should be equal.  

I certainly hope so, it would be nice for more jobs to return to these United States. Given that wages are increasing in China and other countries, at some point it's not going to make much sense to keep outsourcing to these other places. So that bodes well for American workers over the next decade or two, or at least I hope it does.
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