Recruiters and Outsourcing

A recruiter called me in today to talk about a potential contract for project management. The requisition wasn’t unusual at all. Looks like a fun assignment. I’d love to get back in the saddle again.

What was unusual about this was that this was not a technology recruitment firm. This is the first time they have done anything of this sort. They usually specialize in executive recruitment. The project request from their client was specific and outside of their area of expertize. In fact, the recruiter needed much of the tech stuff interpreted for her.

I offered to translate, and an idea sprung to mind. I suggested that perhaps they could use me to develop a tech recruitment side line. I explained that this was the perfect time to get into that market. Just look at the forces that are aligned to move the market.

1. There are a vast number of IT jobs outsourced overseas. The IT unemployment problem is real and well documented.

2. Kids are shying away from the IT and computer science discipline. The job market isn’t there for them. And they watched their parents give up their lives in IT only to watch their futures get crushed by lay-offs.

3. Outsourcing is a pain. It involves turning control and trust for your core processes to people you do not know, and frequently have trouble understanding. The understanding is as frequently cultural as well as in accent. Your staff frequently resents the folks overseas. Your customers frequently have difficulty dealing with technical support with an accent and lack of sleep from being up long hours into the night to conform with our time zone.

4. Outsourcing returns on investment start to decrease sharply after the first two years. This is the result of interest turning to other problems in the organization. Pam says that American companies suffer from organizational AD/HD. I tend to agree. The next quarter is the only reality. Whatever affects that period of time gets all the interest. Once outsourcing show initial savings, it is pushed off the big priority list, and gets shuffled down to lower tiers to maintain.

5. Outsourcing causes problems in the countries where it is in place. Skilled workers there do not like to be thought of as cheap replacement labor. A rising middle class pushes prices up, and salaries must rise accordingly. Sweat shop conditions are being tolerated less and less.

6. Many outsourcing contracts are coming up for renewal. Quite a few of
them are going to be not renewed or scaled down. There already is a silent
insourcing movement. It is silent because no-one wants to be the first to admit
they are backing off from outsourcing until everyone admits to it.

7. Planning for a contract renewal or cancellation should take place 18 to 24 months before the contract comes up. Organizational AD/HD prevents planning for this length of time. The cowboys in the executive offices are once again going to be forced to “shoot from the hip.”

8. The economy is bound to start up its engines once we can get Iraq and hurricanes behind us. That just adds a multiplier effect.

If I were a recruiter, I would be gearing up to get all the IT geezers in line that I could find. Can I help you?