Jobs and the Job Market

Top 55. Apr 22, 2005 6:38 PM

» Bill_Duffy - Outsourcing close to home

Taking technology jobs offshore could create a sweatship
By Gerard Wright in Los Angeles
April 23, 2005

For the young, single, non-American computer geek, this could be the job of a lifetime: work on software development on a cruise ship, a half-hour water-taxi ride from the manifold delights of Los Angeles.

Granted, the pay won't be American, and the delights of LA will only be accessible on a temporary and circumscribed basis, but these are mere details in a project that aims to revolutionise the multibillion-dollar IT outsourcing industry.

Roger Green and David Cook, a pair of southern Californian entrepreneurs and veterans of the outsourcing industry, aim to return outsourced jobs to - or at least near - the United States by refitting a cruise ship, stocking it with 600 of the best software engineers they can hire, and working them in continuous 12-hour shifts, via the internet and microwave communication.

But rather than being based in or near Bangalore, Mumbai or Chennai, the usual locations of the 80,000 IT jobs that have left the US in the past four years, the ship will be anchored five kilometres off Los Angeles.
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SeaCode Inc, based in San Diego, intends to have its ship in the water and its employees at their workstations by the end of the year. The two entrepreneurs would not reveal the cost of the venture nor the identity of their investors, other than to say the ship would cost between $US10 million and $US30 million ($12.8 million to $38.7 million).

Their project has attracted a frenzy of interest on internet tech sites like Slashdot, where the common refrain was that SeaCode would be running "a sweatship" of captive tech-heads working day and night.

It was one of the first thoughts that occurred to Professor Omar El Sawi, of the University of Southern California's Marshall School of Business.

"There are two scenarios to this," Professor El Sawi said. "One, what a great idea: it's like a free trade zone. Two, there's potential for a sweatshop there. It's almost like finding loopholes in the laws ..."

Mr Green dismissed the sweatshop comparison. "These will be highly skilled, highly educated people competing for these positions," he told the Herald. "They will be treated with dignity and professionalism.

"We're a Californian company and we're going to manage this in the way that made America great. This is not going to be an under-the-covers, renegade operation."

But with their official location, 160 metres past the state line of territorial waters, the workers lose the legal protection of land-based employees.

If they were onshore, Mr Cook admitted "they would have to be paid at the legal rate in the United States". But as offshore workers and residents, the 600 workers can be paid at a lower rate, while also saving SeaCode the $US800,000 cost of appropriate visas. Instead, they will be allowed to use the shore passes granted to any visiting seamen.

Outsourced IT jobs typically pay a quarter to a third of their US equivalent. An Indian software engineer with six to eight years' experience can earn $US18,000 to $23,000 a year; the same US worker could expect a salary of $US70,000 to $US80,000.

The lost tech jobs are part of a larger exodus of white-collar employment out of the US. In 2002 Forrester Research estimated that 3.3 million US service industry jobs would move offshore by 2015. A report by the Information Technology Association of America says the savings from outsourced jobs will reach $US21 billion within the next three years.

Mr Green said people tended to underestimate the cost of distant-shore outsourcing.

The belief "you could turn over everything to people who speak a different language on the other side of the world" was too good be true.

Professor El Sawi said: "The benefit of face-to-face contact and proximity in development situations is very important."

-- posted by Bill_Duffy

Top 56. Apr 22, 2005 9:42 PM

» Normxxx - Re: Outsourcing close to home

In response to Outsourcing close to home posted by Bill_Duffy:

Are they going to screen people for tendency for seasickness?

-- posted by Normxxx

Top 57. May 10, 2005 7:33 AM

» Bill_Duffy - Working 24/7, what fun!

Engineering today: Another reason to pick a different career.

Globalization's endless workdays
Outsourcing's side effect: U.S. managers work around clock with overseas colleagues
By RACHEL KONRAD
ASSOCIATED PRESS
SANTA CLARA - The traffic jam ended hours ago, the parking lot is nearly empty and fluorescent lights are dimmed at PortalPlayer Inc., where the nightly brainstorming session is about to begin.

Instead of gathering the few remaining souls from their cubicles, three managers move into a conference room to dial India, where engineers 12½ time zones ahead are just arriving in Hyderabad.

As colleagues on opposite sides of the globe discuss circuit board configurations and debugging strategies for a project code-named "Doppelganger," it's just the start of another endless day for the company. Within 12hours, Indian workers will end their day with calls and e-mails to Santa Clara, where managers will just be waking up.

"We keep passing the baton between California and India, and that way we can cram a lot more work into a 24-hour period," said Jeff Hawkey, vice president of hardware engineering, who conducts evening meetings from the office or on his laptop at home. "A lot of nights, I go home, tuck the kids into bed and then get on the conference call."

Executives at PortalPlayer, which makes chips and software for portable music devices such as the iPod, say having 90 employees in Hyderabad nearly doubles the amount of engineering work that gets done in 24hours. That shrinks production cycles and lets the 6-year-old company stay ahead of bigger rivals.

Thousands of other tech companies have similar baton-passing rituals. "Offshoring" - the migration of jobs to lower-cost countries such as India, China and Russia - remains politically sensitive because of the tepid U.S. job market. But executives insist that cheaper labor and faster work flow have made offshoring a fact of life for everyone in the industry.

Even the most unapologetic globalization proponents acknowledge offshoring has resulted in longer, stranger hours for U.S. white-collar workers. Some business experts worry the trend could result in massive burnout.

Silicon Valley workers grumble that communicating with colleagues overseas requires midnight teleconferences, 6 a.m. video meetings and the annoying "pling" of instant messages and twittering cell phones all night long. Although many techies swapped social lives for 80-hour weeks during the ephemeral dot-com boom, the 24-hour business cycle seems even more stressful than the caffeinated '90s: Today's long hours are less likely to result in windfall bonuses or stock options, and there's no end in sight.

"It's definitely a case of work creep - everyone in this industry is working harder right now because of e-mail, wireless access and globalization," said Christopher Lockhead, chief marketing officer of Mercury Interactive Inc., a Mountain View-based consulting company.

Some executives who ask workers to burn the midnight oil offer flexibility - longer lunch breaks, telecommuting privileges and complimentary dinner if they work past 6 p.m. Others dismiss complainers as spoiled or provincial. The staunchest advocates say whiners should find new professions.

Richard Spitz, with the recruiting firm Korn/Ferry International, says corporate clients want employees who embrace a 24-hour business cycle.

At what cost, however? Some worry the extra hours and unrelenting pace could have dire consequences - namely, widespread fatigue and brain drain in the technology and financial services industries, the most aggressive exporters of white-collar jobs. Steep turnover among sleep-deprived managers could eventually lead executives to re-evaluate offshoring.

Staffing challenges may already be taking a toll. According to a study released in April by Deloitte Consulting LLP, 62 percent of senior executives interviewed at 25 large corporations said offshoring required more management effort than they had originally thought. More than half said they couldn't free up enough managers to supervise projects.

Marcus Courtney, president and organizer of WashTech, the Seattle-based branch of the Communication Workers of America, said few employers pay overtime for midnight meetings or red-eyes to Shanghai.

And while many techies are proud workaholics, dawn teleconferences and 9 p.m. meetings have stretched shifts to absurd lengths.

"In today's global economy, employees are seeing longer working hours, greater job insecurity due to job exporting and fewer rewards and opportunity," Courtney said.

-- posted by Bill_Duffy

Top 58. May 10, 2005 10:04 AM

» Kirk - Re: Working 24/7, what fun!

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In response to Working 24/7, what fun! posted by Bill_Duffy:

Engineering today: Another reason to pick a different career. Globalization's endless workdays Outsourcing's side effect: U.S. managers work around clock with overseas colleagues

I remember the pressure to stay late for meetings with people in Singapore. My reply was "I come in early (7AM) to have meetings with people in Europe so if you want me to stay for a late meeting, you have to give me notice so I can sleep in like the rest of you who get here at 10AM."

A good team leader can delegate and have different members on the team responsible for different parts of the World, but with the crunch on costs and compressed cycles, the pressure now is to get two engineers and first level manageers worth of work from each warm body then hire a new one when they get old and need medical care from burn-out.

The solution for this from a stockholder point of view is to increase the number of H1B Visa's so you can keep the flow of fresh bodies with no life ties to the area running. It becomes like the days when they built the Alaskan Pipeline and trades people went there to work and make a fortune in a short time then return home. I hear oil platform workers lead a similar life.

If engineers want better pay and better hours, then they have to vote against H1B's... but the solution could be that the companies tell the managers "tough luck, move your ass out of the country and manage your workers in Asia or go work at Walmart!" So, eventually, like all jobs, you need to keep your skills so high that they can't easily outsource your job. The thing is, this is not new.

-- posted by Kirk

Top 59. May 10, 2005 10:13 AM

» Bill_Duffy - Re: Re: Working 24/7, what fun!

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For my last 2 years at A, many days started at 7AM with a teleconference with Boeblingen, Gemmany, and ended at 8PM with a teleconference with Tokyo or Panang. Because I was the manager, I had to attend both. It got to a point where my life was just work and sleep. The implicit threat was "either you or your sucessor will attend."

Glad it's not me anymore!

-- posted by Bill_Duffy

Top 60. May 10, 2005 10:20 AM

» Normxxx - Re: Working 24/7, what fun!

In response to Working 24/7, what fun! posted by Bill_Duffy:

Not altogether bad! Some companies are 24/7 per employee!

-- posted by Normxxx

Top 61. May 10, 2005 3:36 PM

» Kirk - Re: Re: Re: Working 24/7, what fun!

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In response to Re: Re: Working 24/7, what fun! posted by Bill_Duffy:

For my last 2 years at A, many days started at 7AM with a teleconference with Boeblingen, Gemmany, and ended at 8PM with a teleconference with Tokyo or Panang. Because I was the manager, I had to attend both. It got to a point where my life was just work and sleep. The implicit threat was "either you or your sucessor will attend." Glad it's not me anymore!

I sure picked a good time to leave and try a new career in 1998. My friends who were managers and working their way up to high level managers were so happy I was out and doing well enough to not come back. They said it was stressful in 2001 through today with all the layoffs where the people left often felt worse than those being sacked! They had to do their own jobs plus the jobs of those who were "downsized."

I miss the TYPE of work and the brilliant people but not the stress and politics. I may go back someday as a consultant where you get paid by the hour. Then you don't feel bad working extra hard. Now I'm enjoying some completely different work related to investment banking so who knows where that may lead. The main thing is to not be bored and to enjoy life. I don't think many enjoy life when they are in meetings from 7AM until 8PM where their family wants a divorce and their Dr. says lose weight and exercise and reduce stress or you'll die early making it all a worthless expenditure of time.

-- posted by Kirk

Top 62. May 10, 2005 4:04 PM

» Bill_Duffy - Re: Re: Re: Re: Working 24/7, what fun!

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"I don't think many enjoy life when they are in meetings from 7AM until 8PM where their family wants a divorce and their Dr. says lose weight and exercise and reduce stress or you'll die early making it all a worthless expenditure of time. "

There were times when I thought it would be a good day to die. I think the companies are under such pressure to make money that they don't really care if they are burning out the staff. Nobody should have to work hours like that.

I too, love doing engineering, and if I could do it part time, I'd jump back in. But I will not do 12 hour days. It's too bad companies cannot figure out how to be more flexible.

-- posted by Bill_Duffy

Top 63. May 12, 2005 11:02 AM

» dancooper - Re: Working 24/7, what fun!

In response to Working 24/7, what fun! posted by Bill_Duffy:
Finally!

I have finally been given some legitimate reasons to be glad I didn't go into engineering!

Dan Cooper
CE, Vintage and Classic Cars

-- posted by dancooper