Digital Talent Unavailability in US Raises Need for Offshore Talent


There is a clear talent shortage in the US, and this is particularly true of specialized skills (engineering and IT), which are at the center of the competitiveness of the US economy. The current Administration is intensifying this skills shortage by restricting companies’ ability to import talent through H-1B visas. The unintended consequence of the Administration’s strategies to constrict offshore workers is that the skills shortage is forcing US companies to go back offshore for the necessary talent.

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At the center of the transformation that is happening in American business is partly a move to the cloud environment and to services underneath that. There are simply not enough American engineers and IT talent to understand the AWS services environment to satisfy the need for these skills in the marketplace today. For example, our research at Everest Group shows the US currently lacks the following (just a few among many) skills:

  • 25-40% unmet demand in talent base: skills in AWS IoT, Cloudera, Docker, Kubernetes, Pytorch
  • 20-25% unmet demand: skills in Apigee, Azure IoT Edge, Cassandra, MuleSoft Anypoint
  • 15-20% unmet demand: Automation Anywhere, Black Duck, Blue Prism, Microsoft Azure API management, TensorFlow
  • <15% unmet demand: Cucumber, Jasmine, Keras, UiPath

The intense talent shortages are for critical skills in AI and ML, automation, IoT, quality assurance and data analytics. These skills are now essential to the competitiveness of American industry.

Whether your business is a tech company, Google or Amazon, or a battery firm moving from lead assets to lithium iron, or a retail company trying to meet the challenge of Amazon, or a pharmaceutical company looking to take costs out of your supply chain, for example, you need these skills.

Many firms are getting frustrated with their HR department. They have active recruitment for these roles; yet, every month there are more roles to fill. They are not only unable to attract and find talent, but they also can’t keep the talent they have because it’s being poached by other companies.

Setting aside the obvious advantages for society of investing in American workers and great jobs in the US, there is no doubt that US companies would prefer to have many of these jobs done onshore because there are clear productivity benefits. When the workers are located in country (even service providers’ teams), they can have the maximum impact on a business. Better productivity, better effectiveness. But if you can’t hire them, you can’t take advantage of this productivity benefit.

Moreover, the current Administration is constraining the number of H-1B and L-1 visas and making the ability to apply for them much more difficult. The Administration’s actions dramatically increase the visa denial rates, significantly increase the processing times, raise the cost of the application process and make the process far less reliable and more difficult to manage. Many of the H-1Bs are not granted, even after a protracted period of time of questioning. This further intensifies the skills shortage in these critical spaces.

Thus, we effectively have unintended consequences of the Administration’s strategies. They are creating exactly the opposite of the intent of political biases and driving exactly the opposite behavior they intended by constricting offshore talent.

Consequently, we’re seeing an uptick in offshoring where the offshore service providers that can build this talent in cheaper locations such as India, the Philippines and Eastern Europe are rapidly increasing their hiring in those locations. Even though they would like to hire in the US, they are unable to because they simply cannot hire talent in country with the specialized skills to satisfy the needs.

Although the reduction of the ability to import workers is frustrating and costly, the Indian IT services industry can acquire and train onshore resources – at a higher cost. Indian firms are investing more in IP and automation.

Although a few years ago, it looked like we were going to see a reduction in US companies’ dependency on offshore talent. But now, at least for the time being with this severe talent deficit, we’re seeing offshore services flourish aggressively again, as it’s the only way to address the talent deficit.


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