When Done Ethically, Offshoring Tech Jobs Is Good For The Local U.S. Economy

By Matt DeCoursey

A U.S. employee asked to work remotely from another state, and instead her job was sent to India. This anecdote in The Wall Street Journal has, understandably, generated some backlash.

This recalls a familiar wound for Americans. When U.S. corporations turned their back on millions of middle-class manufacturing workers and moved operations abroad, it left many communities and families unable to recover.

But offshoring doesn’t have to be this way. Companies can leverage the global talent pool to solve business problems without heartlessly casting their U.S. employees aside. In fact, when done right, strategically offshoring can benefit a company’s local economy and team.

Despite Recent layoffs, Tech Talent Shortage persists

Technology has driven a golden age of entrepreneurship in recent decades. Through ups and downs, the constant bottleneck restraining the U.S. tech sector has been a lack of available IT talent.

But what about the thousands and thousands of tech layoffs that have been in the headlines for months? While there’s more domestic tech talent available now than there has been in previous years, the number of open tech positions still far outpaces the number of available candidates.

Plus, there’s a mismatch: While startups certainly value experience from bigger firms, those employees are often accustomed to a salary startups can’t afford. A developer at Meta can earn north of $300,000. For a startup, that could be their entire pre-seed funding round.

Software developers have cultivated an in-demand skill and deserve to be well compensated. But developer salaries have skyrocketed, rising as much as 32 percent in 2022 alone. Offshoring hard-to-fill tech jobs can both allow startups to continue building their products, and bring these salaries back down to Earth, creating a more sensible tech labor market in the U.S.

Offshoring For Growth, Not Greed

When key tech positions get filled — even by overseas talent — it allows companies to grow and hire locally for other positions. The ability to add roles such as marketing, sales, legal, accounting, product support, product management and the C-suite is often constrained by vacancies in the tech team.

The software-startup world moves fast. If you’re lucky enough to get investment in this climate, expectations will be even higher than usual. If you don’t build a product or you can’t attract users, then you don’t grow revenue, and with no revenue growth you won’t get more funding and your startup will fail.

Ask any tech entrepreneur — even with the tech giants shedding thousands of employees, the idea of hiring five U.S. software developers quickly is laughable. Offshoring for tech expertise fixes a critical breakdown in the process of building and scaling a company. It can be the difference between a small business with 10 U.S. employees, or a good idea that fails to launch.

Could Offshoring Discourage Young Americans From Entering Tech?

If you’re wondering how this plays out in the long term, filling skill gaps with international talent is nothing new. One of the strongest paths to U.S. immigration is to be hired by an American company that can demonstrate it’s unable to find the skillset it needs locally.

This longstanding policy exists to help companies avoid getting stuck with key roles they can’t fill. Sound familiar? And amazingly, this type of hiring also remains uncontroversial in a country where immigration is always a hot-button issue. 

The reason is because this approach comes from a place of driving growth, not ruthlessly cost cutting. Business leaders can do the same with offshoring. This will create a future in which becoming a developer is still a very attractive career path to earning a great living, and employers can find and afford the talent they need to grow.

Ultimately, entrepreneurs live by the law of supply and demand. With about 4 percent of the world’s population, the U.S. is home to a small fraction of the global tech talent. With remote work now the norm, startups will increasingly tap the other 96 percent of the global population to fill tech talent gaps. As long as they go about it in the right way, their future American employees will be glad they did.

Matt DeCoursey is the CEO and Founder of Full Scale and host of the Startup Hustle podcast.