I know, it sounds like I’m talking in circles. If you want to keep your job, shouldn’t you create more work rather than eliminate it?  Let’s start by addressing the question about why organizations send jobs offshore. Sometimes the rationale for overseas staffing is related to acquiring unique expertise, implementing a follow-the-sun development model, or providing night-time support when it’s daytime on the other side of the globe.  But by far the overarching reason is simple – to save money! Let’s explore if this actually works. 

Say you can replace a $60/hour IT worker in the U.S. with a $30/hour worker overseas (the difference was greater 5 years ago, but the gap is closing).  A 50% cost reduction looks quite enticing, especially when multiplied by 100’s of staff.  The real benefit is less since there are some extra costs that erode the savings.  Costs such as network and systems infrastructure, diseconomies such as mis-understandings and rework resulting from imperfect communications, and operational risks from security issues or political unrest. If you add it all up, maybe the savings are just 40%. Fine – it’s still a big number. 

So here’s the problem – what does the CIO do in year two when the pressure comes to reduce the IT budget again?  Does (s)he offshore more staff?   Or find yet another corner of the world where the labor costs are even lower? Labor arbitrage (replacing expensive labor with cheap labor) is a short-term strategy and is not sustainable.  In fact it makes things worse.  As mentioned earlier, the gap between U.S. and overseas salaries is closing; primarily because overseas salaries are increasing faster than U.S. salaries.  So while the CIO might see a one-time decrease in costs, (s)he may get a surprise a few years later when the new baseline costs start to increase faster than the old baseline.

Let’s get back to the title of the article – how can you stay employed by eliminating work?  If you are doing routine repetitive work such as software development, testing, or application maintenance, then to senior management it looks like a simple solution to use cheaper labor to do the work.  But if instead you work to eliminate or minimize routine work by developing re-useable components, automated testing procedures, leverage metadata to reduce maintenance efforts, and other similar productivity improvements, then this drives two benefits.  First, you end up doing more value-added work that is hard to send off-shore. It may seem counter-intuitive that you can keep your job by automating routine work, but the reality is that every enterprise has more work than available resources.  So if you streamline the routine work, you then have more time for high-value activities.  It is much less likely that your organization will send creative and innovative work to off-shore teams.

Second, automation is more sustainable for achieving continuous improvement.  Organizations that have implemented Lean management practices for example (as per my blog 10 Weeks to Lean Integration) have demonstrated year-over-year improvements in productivity by continuously finding ways to eliminate wasteful activities. There are tremendous opportunities for improvement in organizations that are working in functional silos – you can actually reduce costs more by optimizing the end-to-end processes than by hiring cheaper labor.

In short, by automating routine activities, you end up making yourself more valuable to the organization and you establish practices that support continuous improvement.  There are of course no guarantees of employment in the modern workplace, but doing value-added rather than routine activities is one of the best ways to maximize the odds.