If there is something the onshore / offshore model at ExxonMobil has proved it is that it is not working and is not efficient
Be it HR, admin or IT related tasks it takes weeks and months of back and forth efforts to get an answer where it would take only 3 minutes with a local staff
In fact it proves that the so called expensive local workforce is underpaid in relative productivity term!
If a workforce let us say in India (as an example) is paid half of the salary of his equivalent in a higher salary workplace but it takes 10 times more effort to get a service the higher salary local workforce is still 5 times more competitive
And by the way we tried to recruit an Indian directly from India in Western Europe last year and after having been proposed a job and explained the salary package he declined the offer saying he was better off in India
Has someone ever seen a real study about the efficiency of onshore/offshore models? I mean outside of the consulting firms being paid to tell management what they want to hear?
9 replies (most recent on top)
The guys in India May be getting 10-15% of a US based employee but what is their bill rate. I’ve seen bill rates of US based vs Indian based resources doing the same job from the same company. The India based employee is 60% of the US based employee.
As was said before, these guys are like anybody else. You get the cheap rate because they lack experience. When the experience increases you either need to pay them more or they’ll find a better job.
The problem is those who get kudos for this initiative don’t have to deal with the pain.
I agree we go through these cycles of offshoring work. We spend a lot of time transferring knowledge. It takes a while before the new folks get the hang of it. Then people start leaving.
It is frustrating when new management sponsors the same efforts expecting different results. You’d think there would be some learnings from past efforts they can review. Those who have been here a while don’t want to keep doing this over and over. The amount of effort given decreases with each new cycle.
Offshoring is just one activity that fits this model where we don’t learn from past mistakes. We have others.
And the company continues going ahead with the outsourcing model, there are hundreds joining the Bangalore office in the next 1-2 months alone.
The local pay for places like India are more like 10-15% of comparable US pay. With that payroll difference, XOM is very willing to accept far less quality work.
My experience with offshore IT support at EM was horrific. They could never fix the problem, and often could not even comprehend what the issue was and what had already been tried. After days or weeks, the "ticket" would end up back at the local group housed in my building. At that point the US contractor employee (that I already knew) would then be allowed to come over to my office. The issue was typically resolved within an hour, and sometimes in just a few minutes. When confronted with this information, management would just shrug and say there was nothing they could do (and would then be frustrated with me that it was even mentioned or brought to their attention). Offshoring is a classic case of "Penny Wise and Pound Foolish".
Was part of this type of real life nightmare. Management was expecting the rate to go down and was perplexed it was actually going up. Not surprised considering local employees were spending more time to coach the offshore or providing offshore with the completed work to claim credit. The skill level is just horrible - garbage. Once someone is good enough, they realize their marketability and leave. Cycle repeats.
Concept does not work in practice. Maybe if can maintain a skilled workforce, it would look different.
So leadership felt we had to pay insane amounts of money for consultants to tell them that they will need to cut a percentage of the workforce and to stop wasting so much money?🙄
The consulting firms are a joke. Whoever xom hired should be fired immediately.
Similar patterns happened in tech like 10 ish years ago. Cycle is: offshore for cheap development.... realize it doesn't really work after 5 years.... begin to use local contractors because you have no local in-house expertise.... eventually decide to hire these folks on as FTE. Wait 5 to 10 years and the process begins again because the new person in charge never experienced the cycle and is lured in by the short term gains.
I had to work with it directly for almost two years and it was two years of he-l. It took days to get one thing accomplished that should have taken all of ten minutes and that is if you get an answer at all. Many times we are left on hold for hours or simply hung up on. I have never seen anything like this.