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United States Software Engineers
The Difference has Always Been Innovation. (or Why US Engineers Cost More)
One of the ongoing trends in Computer and Software Engineering in the United States is the ongoing migration of many jobs overseas. As I have mentioned many times before, the actual threat of offshore labor to Unites States Software Engineering field is minimal, and in many cases, has actually increased demand for local US engineering. There are many website online that continue this debate. But, I felt it was time to really lay out the facts and make a case for one very interesting point that has been ignored when making the case for hiring Unites States Software Engineers over engineers from China, India, Cost Rica and other sources.
Many IT "Rags" have for the past 10 years made "assumptions" that in many fields in IT in the US and Western World, that as much as 25% to even 50% of IT jobs by 2010 would be offshored or replaced by overseas labor. In actuality, that number currently hovers around 11% last I checked, and in some fields as low as 2%. That is not even true in the case of those jobs showing that they actually caused US engineers to lose jobs because of Offshoring, which last I read may be around 6%. Very small indeed.
In looking at what is really going on in technology and jobs in the United States currently (2009), one has to look at the facts. First of all, the average salary of an IT software engineering professional in the United States remains around $75,000 to $85,000! That is almost
double the average job in the United States for all other professional, which averages around $40,000, more of less. If you look at unemployment for all jobs in the US right now, with the recession its closing in on 8-9%, and as high as 12% due to the global recession. Yet, IT jobs and
US software engineering jobs have one of the lowest unemployment numbers of all professions, averaging around 4.5-5.5% currently. What do these two facts say? They say that clearly, business in the United States, despite offshoring and even the recession, cannot find enough local software engineers and that in terms of salary, despite the obvious assumption that lower offshore labor should reduce local labor IT costs, it has had little if any influence, as local software engineering jobs remain high and in some markets continue to climb to around $85,000. What does all this say again? It shows clearly that many IT trends do not favor a replacement of United States programming and software engineering jobs by foreign labor, despite the cheaper costs of offshore labor. I guess quality wins in that case and favors the more talented and innovative US software engineer. That statement is also an assumption, so let me now get to the point of my article.
Why United States Software Engineers Remain Increasingly Valuable in the Global Economy...
When you look at the current trends, as well as past trends, in the evolution of software engineering in the United States, you can see a new reality unfolding. That trend is simply that US engineers will continue to lead the world in terms of innovation, salaries, career advancement and leadership in the world of software engineering for many years to come. Is that really true and why? The simple fact is, is that current new business trends towards cheaper labor in software engineering don't hold up as a barometer for succees or best practices in driving the business of software development in the US or globally. Offshore labor has NOT solved the IT problem, of high failure rates, high cost, and lack of innovation talent in the field. Current articles in the industry show, that despite some increases in offshoring of software and programming work, that the US continues to suffer from the lack of supply and limited number of talented US software engineers needed to grow the field. That explains the fact that salaries seem little affected by offshore labor costs and unemployment numbers. The fact remains that despite business assumptions that software engineering is a commodity, US engineers have, in the past and currently, created a reputation for driving innovation and successful project implementations that have created the software world we have now and will have in the future, despite third world engineering achievements. Why else would demand for US engineers continue to outpace so many other professions here in the United States?
One of the continuing problems in the United States that causes this "bipolar" love-hate relationship between US Businesses and US Software Engineers is the fact that IT Managers have lost their way and lost favor with so many IT professional in fulltime IT Service companies in the United States right now. Much like General Motors, their management, CEO and investors are ultimately to blame for the demise of that industry (not the employees who make the cars). Even if the unions are a cause or factor in labor cost issues, the people that build the cars didn't create the problem....its was management and their inability to create a successfully managed company that could also deal with the union. So too, in the Unites States today, technology managers continue to offshore valuable IT jobs overseas trying to "simulate" successes in the past with US engineering achievements, yet with failure, return to hiring back US engineers at even higher salaries than before. I know, as I see this everyday in our field. What this shows is that there is a trend to move jobs overseas, but when poor quality work comes back, or mismanaged IT work returns with even less quality and unrealized innovations and expectations, many US businesses re-hire the same IT engineers as contractors to save these projects. This has happened many times in my career, and I see this continuing at a rapid rate in the future. In the end, this means increasingly positive job opportunities for many US software programmers.
Many US Corporations have begun to show cracks in their architecture of systems based on offshore labor combined with proprietary open source libaries and cookie-cutter black box applications. The fact remains, that for many businesses to remain competitive, they HAVE to design new, cutting edge, proprietary "custom applications" in order to compete against other businesses online and in our current global market place. The assumption by many CIO's and IT management has been add bigger architectures, less management, and more expensive so-called "software architects". They thought that managing a sea of offshore engineers could solve the problem of custom application development, by throwing more bodies at projects and cheaper labor costs would compensate for the added labor. Management assumes that because there are open source alternatives to many custom projects, that these tools combined with cheap labor solve IT problems. (Assuming an open source web site CMS, for example, solves the need for a customer that needs a highly custom website CMS system, is very naive. What happens when you plugin these architectures and they dont have the needed parts? You have to hire an innovator to custom build it. And thats where the failure rate comes in. The cost of a failed project is much more that a higher cost to build a lean and mean custom solution using a few innovation professionals!) This has been a clear assumption by your typical IT business, that a few "talented" US developers at higher salaries could be replaced by a a poorly managed architect and an army of cheap labor. In fact, in many cases I have seen, and read about online, the failure rate of those strategies has been very high, and has not resulted in better software development or innovations. In fact the opposite has occured. There have been, long term, a higher cost due to poor oversite of managed offshore projects and poor IT results, especially in the field of IT "innovation". This isnt measured as far as long term ROI, so has been missed in many more projects, but exists and known by team leaders around the wrold. Why is that? Surely business must be learning this lesson now...
They have, in fact begun to see this trend. What we now see is a trend back to what we used to have in software development. We see a higher demand for a small experienced, and highly innovative core group of US software engineers, working under a higher salary and bonus contract (as Indepenent IT Contractors) in virtual companies in the United States. Where US Companies used to maintain a core talent base in US engieering that gave them a competitive edge, now that has been lost to them because of the achitect/offshore model, and the replacement of even that group by a core group of highly paid US engineers via a virtual organization. The cream has once again risen to the top again. The US talent base has fled the full time employment trend and instead has turned around and re-invented itself as a self-employed contractor base. Because of the high failure rate in offshore and architecture designs, these same US engineers have come back into many of these companies as highly paid engineers and team leads and "cleaned up" many of these failed projects. What I have seen is the value of my "IT innovation" increase as I work independently free from full time employment.
In addition, its ironic that as wages increase for US engineers because of their experience and creative and innovative talents, so too does the prospects for United States engineers increase globally working under foreign companies in China and India and Costa Rica. Current trends for US engineers now in China, factoring in the cost of living overseas, US engineers can make even higher salaries working for a Chinese company directly on foreign soil! This has been documented by many US programmers on blogs all over the Web. Why should the Chinese hire US engineers when they can hire their own cheap labor? The reason is simple....Americans offer a unique produtivity, innovative, skilled, and cultural edge that companies all over the world (unlike US companies) demand. That is the paradox of the US software engineer....that despite what many US companies and managers assume...thats its simply a cost game to get IT costs down and get the same quality work, the facts show, it is not the same. US software engineers remains highly prized participants in the global and even US economy. If they cant get the work and respect and salaries as full time employees, they can and do get that respect and money by working independently under virtual American companies or for foreign companies directly.
My last point is this....there are two facts that need to be said. First one is the following.....WHY are American software engineers MORE EXPENSIVE, and have such GREAT CAREER opportunities, and are overall BETTER than foreign engineers in many many ways as far as software engineers. The reason is NOT because of greater skill, brain power, race issues, training, knowledge, or even work ethic. The reason is simple....INNOVATION! Creativity, risk-taking, fierce independence, and superior problem solving abilities are all parts of the American culture. It is unique to this country. The minute you are born into US society and culture, you are bombarded with change, multiple cultures and ideas, freedom, and free thought, and surrounded by creativity and innovations beyond anything any culture on the globe has at this time. We also attract and in many cases keep the brightest and most talented foreigners from all over the world. Everyone here, once indoctrinated into our rich culture, is required to think on their feet, take risks, and best of all compete fiercely in the realm of problem-solving and improving products and services of all kinds. Combined with hugely competitive business demands, your average software engineer is required to constantly solve and fix errors,bugs, issues and at the same time, create new innovative programs and web sites that go beyond what your average third world software product is required to do. In this rich innovative melting pot, we have created Apple, Intel, Google, The Internet, Space Exploration, Best Military in the World, Microsoft, and even offshore-crazed IBM. Without US engineers and innovations, none of those things would exist today. Today's innovations in software engineering continue to pour from the minds and imaginations of US engineers and remain, despite the growing influence of third world programmers, the source for the next generation of software. That is a fact, but sadly US businesses do not see that, so continue on a downward path in terms of global success. In fact, I predict, if fulltime employment and value of local engineers does not occur again in the US, despite the growing job numbers and salary trends, US businesses will be out of business, replaced by Chinese and India IT companies that come to the US and snatch up prized US engineers. This is actually happening now.
That leads me to the second and last part of this article. US Software Engineers remain the IT innovation leaders and will do so far into the distant future because of the culture of innovation and ideas that surround your average engineer in the United States right now (despite offshore and labor trends, positive or negative). Thats a fact. But I now see a downward spiral for US IT Services companies the next 10 years, as foreign companies hire back US engineers lost by US companies who have devalued them and continue to do so (despite the fact so many rehire these same people at even hire rates as contractors). The reason.....its simple. POOR IT MANAGEMENT. It is the CIO and IT managers who, like so many companies in the US, devalue US employees and have cut the legs out from under your average IT employee. Offshoring those jobs, despite its minimal impact, has demorized US software people and left many out of the earned success they have brought US companies over the years (like Intel, IBM, and Microsoft). The fact remains, that its IT managers that lack the vision, training and experienced to measure and accurately weight the cost of commoditizing IT software engineering labor. By devaluing the "innovators" or men and women who make a company successful using technology, many of these companies with simply have to learn the lesson of those decisions in the global marketplace where poor quality and poorly implemented IT solutions translates into loss of business and lack of sales over time. Anyone can manage and anyone can learn to manage people and projects. Very few can hire the best and brightest, pay the higher salaries knowing the true measurement of that decision will be in higher innovations in IT, higher quality, company loyalty and global success and growth. Just look at SalesForce.com. They have succeeded as they are lead by inspired managers and a CEO who intentionally keeps 2/3 of its IT software engineering force in the United States. They know to be successful they have to hire the best and brightest, and thats in the United States right now. It also involves security concerns and braindrain and corporate secrets kept in the local loyal talent pool. US Companies that refuse to pay wages, give bonuses, reward local success, and value US employees will lose their innovative edge over time. Poor management is the reason and the cause. I say, lets fire management and hire local US engineers as the new management, as they have the vision and knowledge to know what is valuable in local talent and results for failing to hire the best in IT right now. It is a global world, it is true and "flat" as well. But its also flat for US companies who will certainly lose in the global arena over time as they have lost their best and brightest.
All this matters not to US software engineers like myself....I have moved on and as an independent engineer, I am now selling my innovation talent and skill to the highest bidder and helping those who need innovation move their companies forward. My future is bright, whether I work here in the US as a contractor, a highly paid employee for a smart US company, for a global virtual company, or a foreign IT company, new opportunities and offers abound! But, I feel for (and fear for) the United States corporations and CEO's who's businesses will die a slow death if they cannot realize once again the value of the talent pool that exists in their own backyard, and somehow recapture the spirit and innovative talent and value once again of our US Software Engineers. We will be fine....but they may not.
-Mitchell Stokely, USA
