Vol. 49, No. 4
Some companies have found they don’t need to go offshore for lower labor costs.
Jon Carson, CEO of Cambridge, Mass., start-up cMarket Inc., an online auction platform for charity fundraisers, recently fought pressure to offshore IT jobs by advertising positions at roughly the same rates he would be paying in India.
Carson needed four contract programmers when he was approached by a Boston intermediary, offering access to the Indian labor market, who told him he could hire programmers for $40,000 per year—less than half the going rate for U.S. programmers.
Carson recalls being surprised at how even his small enterprise could tap into the offshore market for cut-rate services. “It was very compelling,” he says. “But I know a lot of unemployed programmers, so it was kind of disturbing because the theory of globalization became really practical.”
With those unemployed programmers in mind, Carson decided to “replicate the Indian thing.” He ran an ad for two days in the Boston Globe, offering the equivalent of $45,000 annually. He received more than 100 resumes. He hired four contractors and eventually brought two on board full-time at full salary—about $80,000 per year.
Carson says practicality and emotion guided his decision.
“When you are in the innovation economy and bringing new products to the market, you don’t often get a second chance, and first impressions are critical,” Carson says. “I was picking up that there was a ton to be gained by having your developers physically near your sales and marketing people so they could really understand what the customers are asking you to build, and you just can’t gloss over that when you think about outsourcing to India. The emotional side was just the notion that if you could keep these jobs here, that would be better for everybody.”
Carson won’t vow he’ll never go offshore for labor. “I will resist it as much as I can, but I have venture capitalists and have to make a pragmatic argument,” he says. Meanwhile, he says he’s received nearly three dozen “uniformly heart-wrenching e-mails” from workers around the United States praising his decision to hire locally. “A lot of them are unemployed, and [offshoring] is a very scary issue for people.”
Carson knows his low-wage pitch is not looked on favorably by everyone, particularly programmers presently employed in the United States. He’s heard the story has widely circulated through Microsoft and has shown up in Hewlett-Packard newsletters and on dozens of blogs. “If you’re employed, this is threatening because it clearly shows the scary downward wage pressures being driven by off-