Several years ago, in the land of milk and honey, when my biggest challenge was finding qualified staff (do you remember those days?) I heard that a competitor was outsourcing their civil engineering design work overseas. I shared this knowledge with my fellow managers at the time and we all shared a laugh. “How can you make money if somebody else is doing the work!”, “Their phone bill must be bigger than any profit they could make!” “I didn’t know anybody at that office spoke a foreign language.” We all had a great laugh and went on with our business. And it’s been a downhill ride for awhile!
Well who is laughing now? Many firms have downsized, the economy has impacted some firms more than others. Staff levels decrease and many employees have taken a reduction in salary. Everyone is fighting to stay alive in the current economic situation.
My competitor has not been exempt from this by any means, but they are certainly in a different situation than most firms. Several years ago, while utilizing the capabilities of the outsourcing firm, or “subcontracting” firm, they were able to focus on building relationships. The shift in the work dynamic allowed them to increase their focus on their clients, the review agencies and the community at large. This focus has certainly placed them in an advantageous position in the current economic climate. They have also been subject to downsizing; the largest downsizing has been the elimination of the connection with the outsourcing firm. While this is certainly a strain, I’m sure it has been more palatable to the remaining staff, than a reduction of a coworker in the next cubicle.
I also find it odd how people react to the thought of “outsourcing” as compared to ‘subcontracting.” Subcontracting seems to be fine, we do it all the time when we don’t have a particular skill set in house, or to meet a temporarily heavy workload. Outsourcing is viewed as taking work away from current employees. I was always taught that work flows in ebbs and tides, and that you should set your staff level for just above the ebb and utilize overtime to meet the high tides. Right about now staffing levels with a majority of firms are at “critical mass”, and probably staffed utilizing overtime for the ebb and even more overtime for the high tide. This has a huge impact on staff morale, which I’m sure is not on the radar screen while companies are struggling to survive. Outsourcing is a means to staff up for the temporarily high workload, just like subcontracting is. Why should it be viewed differently?
With my apologies to Elisabeth Kuber-Ross, M.D. the way others react to the thought of outsourcing reminds me of the 5 stages of dying from On Death and Dying. I think anything can be explained with this formula, with the possible exception of the detailed plot lines of a “3’s Company” episode (they’re too easy).
• Denial: “We can’t make money with someone else doing the work.” This is the easiest stage, which is why it’s first. We can always find what is wrong with something. The challenge is to take a true analytical look at staffing options, explore the details, see if you can utilize anything and then determine if you can derive benefit from outsourcing.
• Anger: “Farming work out could work, but you should buy American!” This is a step in the right direction, but falls short of an adequate analysis. We do jump from there to “no way it will work” to “it will work but it’s still wrong”. By the way don’t assume that all outsourcing firms are overseas. There is an ample supply of talent in the good old U.S.A.
• Bargaining: “Outsourcing could work for us if….” OK now we are getting somewhere. This is where the mind kicks in and the emotions in the analysis start to fade.
• Depression: “Subcontracting will never work for us.” The “Eeyore” stage. This seems like one step forward and then one step back, but it is not. We have thought about some of the reasons why outsourcing will not work for us, now we have to think about why they won’t work for us.
• Acceptance: “Outsourcing could work.” Now that we have explored both the positive and negatives of outsourcing we can finally get our heads out of this box and start to truly look around. In times like these we all need to think differently. For you Matrix fans, just think, “There is no box.”
• HOPE: “Outsourcing will work!” Here is where the champions step forward to show others, with enthusiasm, the benefits of outsourcing and start to look for opportunities to implement this type of solution.
Outsourcing/subcontracting is a viable option for meeting staffing needs. It is something that every firm should have in its toolbox to face the economy. Outsourcing has a positive impact on your revenue stream. As you do not have to have full time employees to meet this interim need, you have a reduction in costs, and stress. The stress and aggravation of “feeding the beast” is lessened. That is the management of staff solely by meeting billable hour goals, instead of meeting the needs of your clients and of the project. Remember you don’t manage a subcontractor by 40 hours per week for 52 weeks a year. You manage them by their performance of a task, within a certain budget and within a certain timeframe. It allows managers to focus more on important relationships. Technology is no longer a barrier. With cloud servers and web meetings all the old excuses of “It can’t be done” are virtually gone.
So take the time to see if outsourcing can help your current situation. If you are currently experiencing an upswing in work, but are apprehensive about hiring back full time staff, consider outsourcing as an option. Don’t forget to consider outsourcing as an option in the future, when we are back to the days of milk and honey.
CivilEngineeringCentral.com contributor Bryan Burke is the G.P./Owner of Millennium Resource Engineering, LLC. Bryan has over 25 years experience in the professional services industry. He has worked on a wide variety of Civil Engineering projects, and in multiple roles and in various locations both domestic and abroad. Millennium Resource Engineering, LLC was established to meet the needs of the land development community by utilizing the power and expertise of the Millennial Generation in an non-traditional setting. Bryan currently serves as the Chairperson of the ACE Mentoring Program of Frederick Maryland. You may contact him with any questions, feedback or comments at (240) 344-1510 or bburke@MRE-Eng.com or www.MRE-Eng.com
Outsourcing always seems like a great idea to the short-sighted. It is analogous to a simple pump system with a leak. Eventually the system will run dry and the pump will seize. If you are a US based engineering firm, chances are you are engineering something that is paid for with revenue generated within our own borders. Outsourcing very clearly limits the available revenue, whatever the means of generation employed, and given a long enough time line will inevitably reach a point of equilibrium. This point of equilibrium is reached when the quality of life of a US citizen matches the quality of life of the foreign counterpart, whether it be India or China, both enjoy a substantially lower quality of life than most of us would consider “comfortable”. The only real question is, would you like to reap short term benefits or long term benefits?
Why don’t you hire some young American engineers who can’t find work instead of outsourcing? Think with your brain, not your wallet.
I agree with that assessment. But from the perspective of an executive who is trying to give the shareholders the best returns, I see how on would be inclined to go with cheaper labor. Or what do you think?
This is an engineering website? I thought engineers were supposed to be detailed oriented? There isn’t even a date on this post.
What about the section right below the recommended links? Is that the date you are referring to?