Companies look to “reshore” IT workforce
SIOUX FALLS, S.D. (AP) — Ken Behrendt had already had his fill of the hidden costs of offshoring, but the Eagle Creek Software Services chief executive was having trouble finding enough qualified consultants to expand the company’s development and technical support business in the Dakotas.
So the Minnesota-based firm turned to the University of South Dakota to help home-grow new tech talent through a customized four-course certificate.
“If we have a jumping off point from the university system, then that allows us to bring that consultant even faster to the market,” Behrendt said.
As tech giants such as Google and Microsoft lobby Congress for more H-1B visas to bring skilled workers from overseas, a small but growing number of public-private endeavors are trying to spark an IT reshoring trend by developing the nation’s next generation of tech experts.
IT consulting and development firm PlanetMagpie made “The Argument for ReShoring American IT” in a white paper published late last year.
Doreyne Douglas, vice president of the Fremont, Calif.-based company, said wants the concept to spread throughout information technology as it is in manufacturing.
“It’s really just a baby, and we need to get it out there and we need to really start spreading the idea,” Douglas said.
Douglas and Behrendt say the true cost of hiring programmers in India far exceeds the promised $15 per hour advertised by many overseas firms.
In addition to avoiding language, cultural and time-zone issues that arise with overseas support teams, U.S.-based project centers work better when a company wants better interaction with its customers, especially through mobile apps and social networking, Behrendt said.
Douglas said U.S.-based project centers improve data security, increase worker productivity and encourage teamwork, brainstorming and creativity. Companies who continue to offshore need to start connecting the dots to see the effect on the U.S. tech industry, she said.
“What it has gotten us is dependent on other countries for labor in IT, which is crazy,” Douglas said. “We had the best technology of any country in the world.”
Eagle Creek, which provides Web and app development and technical support to large health care, financial services and other companies, is now focused on setting up project centers in lower-cost U.S. areas such as South Dakota and North Dakota. The company says it can competitively provide consulting services out of South Dakota as opposed to an overseas location because it’s a business-friendly state with no corporate or income tax.
Students opting for the IT Consultant Academy certificate at the University of South Dakota will take two software engineering courses, project management and data management. The academy also offers paid internships with Eagle Creek that can lead to potential employment in IT consultant jobs that pay $40,000 to $45,000 per year.
Such public-private partnerships are gaining in popularity.
P-Tech in Brooklyn, N.Y., a collaboration between New York Public Schools, the City University of New York and IBM, is a six-year program allowing students to graduate with both a high school diploma and an associate degree in computers or engineering.
Principal Rashid Davis said the associate in applied science is a “workforce-ready degree,” as educators team with company executives to identify the needed problem solving and critical thinking skills.
“The credentialing is being informed by the skills that are needed in industry, as opposed to just earning a degree,” Davis said.
President Barack Obama praised the P-Tech model during his State of the Union speech in February.
New York city is opening two additional Pathways in Technology Early College High Schools, and New York Gov. Cuomo announced in February that the state plans to open ten new schools based on the model.
Chicago is planning to open five P-Tech-style schools, and the J.A. and Kathryn Albertson Foundation In Idaho is offering $5 million in startup money to create a similar school that would partner with a company and a university.
Douglas said it will take 5 to 10 years to rebuild the nation’s IT workforce.
She suggests a work grant program similar to efforts of the Works Projects Administration in the 1940s. The grant would cover a year’s salary for a young, inexperienced graduate who could get on-the-job training with no cost to the company.
“At least they get that all-important first job and training, and then they can kind of get on their way,” Douglas said. “I know that a lot of U.S. companies would totally get behind that if they meant that the U.S. was behind rebuilding its IT workforce.”