You may have already heard or read about the controversy surrounding RBC’s decision to outsource technology jobs to an Indian firm.
I must admit that when I read the article I thought to myself, why are they only speaking of these 45 jobs? As a technologist I have seen may “organizational redevelopments” as they are called, and I do see why RBC and hundreds of other employers would be looking at outsourcing certain jobs.
While I was abroad a few years ago, I met a Canadian from Vancouver who started his own company that manages online medical records for Americans. He needed to develop several applications and was considering using offshore workers.
He had looked at three different countries for software developers, here’s what he found to be the cost of a developer:
- Canadian: $65,000
- Argentinian: $17,500
- Indian: $7,000
He explained that he couldn’t afford the $65k for a local developer and the India based ones didn’t deliver the kind of quality he was looking for.
He decided to use Argentinian coders as a middle of the road solution and ended up basing his whole operation in the country!
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Without employing people in a country with lower wages and a lower cost of living, he never would have gotten his company off the ground. Since his company is based in Canada, he pays corporate taxes in Canada which then benefits the country.
Jobs are mobile
The fact is, many technology jobs are mobile and can be done from just about anywhere. Reforms to the Temporary Foreign Worker Program may limit some of the losses, but the trend will continue.
Companies are in business to make a profit, so they will take advantage of any legal way to increase their profits.
Since a computer is a computer no matter where you go, the technical skills someone learns in Canada are identical to those taught in other countries.
So if certain technology jobs are the same in Canada as they are in India, then the jobs will go to the county with the cheapest labour due to cost.
However, if Canadian employers need special skill sets that are only available in Canada, then employers will pay a premium and hire Canadians to fill these roles.
Companies can’t offshore everything
Some technology jobs are much more suitable to outsourcing than others, with expertise playing a big factor. A company might be able to offshore a 1st level support role but would have great difficulty with a highly skilled Network Architect role.
There is another major factor to consider when it comes to outsourcing jobs; soft skills. Giving presentations, writing management level reports, and managing people are all tasks that are best carried out by people locally.
When I was in college and learning about networking, coding and system administration, I didn’t care much for my mandatory arts classes. I just wanted to bang away on the keyboard.
Isn’t it interesting that many years later, the arts classes are the ones that help protect a job from getting off-shored?
A book I read recently, 23 Things They Don’t Tell You About Capitalism has a great chapter on the effects of immigration on jobs and wages.
What to do if you are concerned about your job
For those that feel their jobs could be at risk of getting outsourced, here are a few things you can do.
1) Build relationships
I heard an updated version of an old saying, “it’s not what you know, it’s who knows what you know”. Not only should you build lots of relationships with people that can potentially help get you a job, but you should also make sure they understand the skill set that you have.
Building relationships takes time, simply attending a couple of networking events isn’t going to cut it.
2) Differentiate your skill set
A larger skill set makes you more valuable and difficult to replace. In the technology world, if you’ve only ever worked with Windows, learn and master Unix!
Even if your job does get off-shored you can use your new found skills to get another job. You will also differentiate yourself from other local candidates.
Remember that employers look for well-rounded employees; knowing a different language, having hobbies and being in good health are advantages too.
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3) Get closer to the business
It’s easy to outsource a back office job that is far removed from the actual running of the business. By moving closer to the front office staff in a consulting role, your job will be more secure.
Companies don’t want to offshore critical parts of their business or those that work closest with them.
Remember, outsourcing isn’t going to go away, it is a fact of life in today’s modern world. This cycle has happened before and will happen again in the future, just try to keep up!
Andrew Martin is a Canadian personal finance and investing blogger who recently moved to London, England. He has a background in technology and a passion for travel. His blog, She Thinks I’m Cheap aims to help Canadians build wealth by sharing facts, stories and advice.