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By David E. Gumpert U.S. Programmers: Bargains Go Begging Mark Jennings finds work for Americans at rates not much more than those of India. Corporate America's response has been underwhelming Are major U.S. corporations ready for a homegrown alternative to offshore outsourcing? Mark Jennings is betting his 18-year-old boutique info-tech placement firm that they are. He has committed his business, which boasts about $4 million in annual revenues, to offering the services of American programmers at rates competitive with those in India, the Philippines, and other Asian countries. Jennings has been at it for seven months now, and he has discovered one thing: U.S. corporations aren't rushing to get a good deal by hiring American. He has pitched his concept to more than 100 corporations, many of which he has dealt with over the years of handling traditional outplacement. So far, all he has to show for it are a total of two American programmers working on a pilot basis at a pair of corporations. EXPORTING KNOWLEDGE. Based on my conversations with three of his customers and prospects, I'd say he has a tough nut to crack. The reality appears to be that major American corporations are addicted to the financial savings they're gaining from outsourcing IT work overseas, and an appeal to a combination of economics and patriotism is an uphill battle. Not that Jennings is discouraged -- in fact, he's still pumped, saying as many as 20 of the corporations he has contacted are seriously considering his approach. Jennings' proposal, which he refers to as "insourcing," is simple: His outfit, Synergroup Systems of Aliso Viejo, Calif., will make available to corporations highly experienced programmers for $38 an hour or less. This is around half the going price for contracted U.S. programmers, he says, and only slightly more than rates available in Asian countries. That said, Jennings figures the small premium is offset by savings in travel, oversight costs, and management expenses. Jennings took on his mission partly because Synergroup Systems has been decimated by the down economy and the exodus of IT jobs from the U.S. His outfit's current revenues are down by a third on what they were in 2000. SAFE AT HOME. That's one reason. A second is that Jennings is convinced a real opportunity exists to beat the Asian outsourcing firms at their own game. "Jobs are being created en masse," he says. "They're just being created overseas…. We have phenomenal people [in the U.S.] being cast away." The keys to his eventual success, he says, are twofold. First, there's the newfound willingness of American programmers to work for a lot less than once was the case. Since he put out the word late last summer, he has been inundated by responses from programmers -- many of whom were earning $90,000-plus salaries and generous benefits not so long ago. Today, they are willing to work for less than $30 an hour, which translates into $50,000-$60,000 annually, with no benefits. Second, there is his own willingness to accept significantly lower margins in the expectation that volume will make up the difference. Before that volume picks up, however, he needs to convince U.S. companies that local programmers really do represent a viable alternative to looking east across the Pacific. Here the future grows hazy. The prospects and customers I spoke with have all had extensive experience outsourcing programming work overseas and, frankly, they like the results. (Though with offshore outsourcing at the center of controversy and political debate, they are reticent to brag on the record.) Here are the concerns I heard:
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