Why Onshoring Manufacturing Requires Offshoring IT

Tags: Manufacturing, Logistics, Technology , Supply Chain

Murray Horwitz is senior vice president, SenecaGlobal

Despite a slowing economy, U.S. manufacturers continue to add capacity stateside. According to a 2015 Boston Consulting Group survey, 31 percent of U.S. manufacturing executives said they were most likely to add capacity within the U.S., compared to only 20 percent opting to do so in China. This marks a stark reversal from 2013, when 30 percent cited China as their most likely market for future expansion and only 26 percent said the same of the U.S.

As manufacturers reshore, however, they encounter a pronounced challenge: a growing IT skills shortage. The success of modern manufacturing operations, such as lightweight metal and LED development, is closely intertwined with the availability of IT talent. But with the domestic skills gap widening and H-1B restrictions tightening, manufacturers will be pushed to look overseas for qualified people.

This is especially true for mid-market manufacturers that need to compete with larger, more established manufacturers for tech talent. These large enterprises have the upper-hand when it comes to recruiting tech talent, as many can offer higher compensation and more opportunity to grow within the organization. Unfortunately, mid-sized manufacturers need technology resources just as much as the next guy, which is why it’s so important that they consider looking overseas for support.

A Growing Need for Support

In the past, manufacturers simply kept their IT staff in-house, but the skills shortage is making this more difficult than ever. Code.org estimates that there will be one million more computing jobs than employees to fill them by 2020.

Industrial organizations prize quality in their IT services, but most of the top candidates have already found employment. Manufacturers don't exist in a vacuum; rather, they’re competing against tech startups, Silicon Valley behemoths and countless other industries for tech-savvy staff. As a result, many IT professionals seek out work in more glamorous industries and urban markets.

While quality is the primary concern when filling IT roles, cost is also a factor. A manufacturer could theoretically continue increasing its salary offer until a willing applicant is found, but this is no guarantee of their skill level. Further, this creates an unsustainable dynamic which undermines the cost-saving and efficiency benefits of onshoring. Rather than waiting for skilled IT professionals to change jobs or enter the workforce, it’s more productive for manufacturers to cast a broader geographic net. By seeking IT professionals from elsewhere in the U.S. or even overseas, manufacturers aren’t constrained by the availability or cost of talent.

Flexible Talent Sourcing

Far beyond basic helpdesk needs, outsourced IT services span a range of capabilities, from operations to software development. By blending in-house, nearshored and offshored IT resources, manufacturers can match their needs against the skillsets present in the global IT market – not just in one country. For example, a manufacturer might choose to offshore basic development tasks and level one helpdesk support, while choosing to use nearshored teams for operations support in the event of physical equipment malfunctions.

Most manufacturers may continue to keep the most sensitive, complex, and mission-critical tasks (such as system architecture and project management) in-house. This allows organizations to maintain high standards of quality and reliability while meeting their IT needs on-demand without succumbing to the skills shortage.

Employing a Global Workforce

While managing an international workforce was once the sole purview of large conglomerates and the Fortune 500, today all manufacturers can and should take advantage of the resources available to them. Nearshoring and offshoring provide organizations with the flexibility they need to quickly locate talent while maintaining a high standard for their development and operations needs.

Rather than struggling to locate skilled IT professionals amidst a domestic talent drought and tightening H-1B restrictions, manufacturers, especially those in the mid-market, must go global in their search for the right IT reinforcements.






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