Could the Next Hot Spot for Outsourcing be the US?

Nancy Anderson
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Technology companies have been relying on outsourcing to reduce costs while improving efficiency and focus since the 20th century, and traditionally these outsourced positions have been sent offshore to countries with low labor costs and a large pool of skilled workers. Domestic outsourcing has been a far less common phenomenon, but this may not be the case in the future. Trends in 2017 point to an increase in domestic outsourcing in the technology field.

Reasons for Outsourcing in the United States

Domestic outsourcing companies, such as Nexient and Catalyte, set up shop in areas that have a low-cost of living but significant unemployment rates. Many skilled workers who live in the Midwest and the Southeast are unwilling to move to more expensive areas, such as New York City or the Bay Area of California, where jobs are more plentiful. By creating outsourcing centers in these areas, companies pull in qualified workers fully immersed in American culture at a lower pay rate than that required to live in costlier urban centers. As wages increase in more traditional outsourcing areas, including South Asia, the lure of domestic outsourcing becomes even stronger. Tech companies also know that domestic outsourcing is good for the American economy, and in line with governmental goals to decrease unemployment by keeping technology jobs at home.

Advantages of Domestic Outsourcing

The biggest advantage of keeping your outsourced operations in the United States is having a team that is fluent in the same language and living in the same culture. It also helps when everyone is in a similar time zone, making impromptu meetings and collaboration easier. Team leaders in American-based outsourcing centers can easily report in in real time every day for immediate feedback. Also, mobile apps and website development are essential to modern businesses, and domestic teams best know the needs of American consumers. Domestic teams have easier access to potential customers for the continual research and product development that is necessary in the fast-change environment of contemporary technology.

New Models for Outsourcing

A steady supply of qualified workers is essential for the growth of domestic outsourcing. Techtonic Group has managed to reduce its offshore outsourcing by creating its own technology training program. A five-week course feeds workers into an official six- to nine-month apprenticeship program in software engineering. Techtonic goes on to hire the vast majority of the graduates from its program, which is free to qualified individuals. Other outsourcing companies are following suit, providing in-house training for programmers to help keep their outsourcing operations on U.S. soil.

Domestic outsourcing gives companies many of the advantages of offshore outsourcing, most notably lower labor costs and better efficiency, while increasing the number of technology jobs available for local talent and building development teams that understand and have immediate access to American culture. Look for the growth of domestic outsourcing companies as they work to build more centers across America.


Photo courtesy of duron123 at FreeDigitalPhotos.net

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