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Another Perspective

"Outsourcing" -- For Real

The development of real outsourcing makes up one of the major threads in the story of business from the 1980s onward.

(Page 2 of 2)

There are drawbacks. "We're dealing with technicians (in India) who don't even know what a bond is," Tom says. Byte has to work harder training the programmers.

When I asked Tom whether the incentives to hire abroad were mainly positive (i.e., subsidies or tax breaks) or negative (high U.S. costs and regulatory burdens), he had to think about it.

"The regulatory hurdles we face are visa quotas," Tom says. "We could bring over more people under other visa options. The only (tax) benefit might be that we don't have to pay matching FICA (Social Security) contributions for those people (in India)."

Without the economic advantage of hiring Indian programmers, Byte Consulting might not have created its dozen U.S. jobs at all. Prudential fired the entire structured investment department in 2000 three months after Tom left. And, as Byte develops a track record and attracts more business, the company expects to hire more U.S. employees, mainly in client service.

Benedict Arnold? Yeah, right.

p> Lawrence Henry writes every week from North Andover, Massachusetts. br> /p>
Page:   12

topics:
Business, Social Security, Law

About the Author

Lawrence Henry writes every week from North Andover, Massachusetts.

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