The Rise of Socially Responsible Outsourcing

Michael Vizard
Slide Show

Outsourcing Fundamentals

Eleven tips on completing a successful outsourcing project.

Within some IT circles, Indian outsourcing firms have become the poster child for everything that's wrong with globalization and the H-1B visa program.

But blaming a certain set of companies for taking advantage of business opportunities created by the American companies that use the services of these firms to lower their IT costs seems a little hypocritical. There's no doubt that these Indian firms enjoy a cost advantage by primarily leveraging labor resources in India, but that's not all that much different from all the manufacturing jobs that U.S. companies outsourced to China. Businesses shift work to where costs are lower unless other outside pressures are brought to bear.

According to HCL Technologies CEO Vineet Nayar, that's exactly what's starting to happen. At the company's Global Meet 2011 conference this week, Nayar noted that the Indian outsourcing provider has created 1,200 jobs in the U.S. The company has been working in cooperation with local universities and state governments to ensure that there is a supply of IT talent for those projects. The reason for this, Nayar says, is that "socially responsible" companies in the U.S. want to make sure that IT work performed on their behalf is done in the U.S., so even though HCL Technologies is not sure how profitable these projects will ultimately prove to be, customer requirements are driving the company to invest more in U.S.-based IT talent. That effort, notes Nayar, is also part of a larger effort to have greater local presence in the U.S. market because HCL Technologies is getting involved in more complex projects that require more than just the availability of low-cost IT skills. In fact, the goal is to have 10,000 employees outside of India by 2015.

IT jobs are, of course, a hot-button issue. But Nayar says that between companies in the U.S. insisting that jobs be performed in the U.S., and the fact that more than half of all H-1B visa requests are being rejected, fundamental change in the way IT projects on a global basis are being managed is starting to take place.

Long term, the real question shouldn't be so much about rolling back globalization as much as it should be about advancing the skills of the entire IT community in a way that promotes enough work for all concerned. But in the meantime, forces other than pure economics are starting to have an impact on where IT jobs are being distributed.

Add Comment      Leave a comment on this blog post
Nov 16, 2011 9:29 AM Some Guy Some Guy  says:

These offshoring companies built a business out of abusing the H-1B and L-1 visa laws.  They have been defrauding the united states and its workers for a long time.  The Infosys lawsuit alone should bring these practices into light.  It's a disgusting practice and it needs to end.  H-1B isn't about immigration, it isn't about offshoring, it's about human trafficking.

Nov 17, 2011 4:06 AM P Revere P Revere  says:

It would be refreshing for a change if the corporate, cheap labor shills at itbusinessedge would interview one of THE FIVE MILLION UNEMPLOYED AMERICAN IT WORKERS instead of the people responsible for the problem.

Nov 17, 2011 10:24 AM weaver weaver  says:

"Nayar noted that the Indian outsourcing provider has created 1,200 jobs in the U.S."

Why do I suspect that temporary immigrants are included in this statement?  The rise in H-1B rejection rates is welcome news.

Nov 17, 2011 12:19 PM the B the B  says:

H1b and L1 are here to stay. sure HCL create job in america, they create for H1b

we even get stimulus bailout fund to displace american worker

Nov 18, 2011 3:57 AM John80224 John80224  says:

The cynicism in the comments preceding mine is hard to miss - and hard to blame.  It's taken 20+ years of layoffs and stunted or even abandoned careers combined with an extended shaky economy to finally see some progress.  We've been written off as racist, xenophobic, myopic, ignorant and selfish while age and race discrimination is practiced on us.    The same foreign industry the US has played the lead role in creating now projects having more jobs than the US within a few years.  Things have finally gotten bad enough that the common sense argument isn't being completely set aside.

Against this backdrop and with their demand for visas not being met with increased supply and/or lax enforcement I suspect this is FAR more about their hand being forced rather than some noble sentiment.  Referring to it as "socially responsible" is like commending someone who simply can't get a car for being environmentally conscious when taking the bus.

Nov 22, 2011 1:58 AM IAmNumber813 IAmNumber813  says:

June 22, 2009, HCL CEO Vineet Nayar: "Tired of hearing stereotypes about Indian tech grads, Mr. Nayar, speaking before an audience of business partners in New York City, blasted American tech grads as "unemployable"."

Since HCL CEO Vineet Nayar believes American tech grads are unemployable, those alleged 1200 "jobs" must be for converted Indian green card holders. Or was there a specific date that HCL CEO Vineet Nayar changed his public stance about American tech grads being "unemployable"?

Nov 25, 2011 5:22 AM Zain Zain  says:

I think These big giants are not taking serious " Occupy Wallstreet" Campaign!! H1b is all about human trafficking

Jan 4, 2012 2:13 AM Clay Williams Clay Williams  says:

There are so many countries that we can outsource our business. It's not only in India that pioneers in BPO services anyway. If anyone here got a problem with that, why not try other neighboring countries, right? And I think why Northern Countries opt to outsource their business to other accommodating countries it's because its cost-efficient.


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