Fair Trade on Jobs?
It's easy to see why offshore outsourcing makes U.S. businesses feel like kids in a candy store. Hourly labor costs run $25 to $40 for Indian technology workers, compared with $150 to $200 for U.S. contractors. Gartner's rule of thumb is that enterprises cut between 25 percent and 40 percent from project costs when using the offshore model.

Once U.S.-based companies turn to offshore outsourcing, it's rare for them to bring jobs back. United States Cold Storage Inc., a refrigerated storage company in Cherry Hill, N.J., for example, turned to Cognizant's offshore services in 1999 to help it upgrade from an outmoded IT infrastructure to a Web-enabled environment. At the time, its 11-person IT staff was running 30 separate IBM S/36 minicomputers and had no e-commerce or Web skills. And the company was having difficulty finding and retaining IT staff, said Director of Transportation Larry Alderfer. Cognizant, through its offices in India, helped USCS deploy a new Web-based transportation system that uses AS/400s, IBM's WebSphere application server and a Java interface. The systems are now the foundation of the company's e-USCold business-to-business site. In all, Cognizant took over 95 percent of USCS' development and support activities.

But that was 1999. This is now. Finding and retaining IT workers with all but the rarest skills is hardly an issue. Why, then, doesn't USCS reverse course and hire domestically?

"It's an ongoing debate," Alderfer said. "It's a great market to hire people in now. There's a lot of well-trained technical people now available, in all aspects, whether it's Web-based or traditional programming. But we still have the situation where we have to manage those people. With the outsourcing, we don't have all those headaches. We tell them the cost and when it's required, and they deliver when they're expected to."
http://www.eweek.com/article/0,3658,s=25210&a=26941,00.asp