It is highly unlikely that software engineering will be entirely outsourced because so many startups rely on the intellectual property of the code they create and aren’t keen to hand this over to third parties.
Outsourcing is nothing new. It came out of the skills shortage in the IT sector during the 90s and many people thought the industry would go the same way as manufacturing, where a lot of jobs were outsourced to countries like India and China.
Fortunately, homegrown talent and the rise of hubs like silicon valley have prompted enormous job growth in the tech sector.
It has kept many big companies in the country as they fight for the attention of the best developers in the world.
So no, not all software engineering jobs are going to be outsourced. The craving for domestic talent and the growing number of U.S. unicorn companies mean these jobs are here to stay.
Let’s take a deeper look into IT outsourcing and why we shouldn’t be worried about programming roles anytime soon.
Will software engineers actually be outsourced?
No, software engineering is not going to be completely outsourced.
The need for software engineers is set to grow by 22% over the next decade, and there is already a shortage of nearly a million IT jobs in the United States.
You shouldn’t be concerned about software engineering being outsourced but whether the supply of domestic workers can keep up with demand!
IBM is the largest outsourcer of IT jobs in the world. With a company that size putting so much effort into outsourcing you can understand why people are asking if domestic development is dying.
However, companies outsourcing their jobs to cost cut and try to improve efficiency is nothing new.
The current value of global outsourced services comes in at $92.5 billion with an enormous $66.5 billion of that comes from IT outsourcing. Not chump change to say the least.
The trend for outsourcing web development and programming is on the rise. So should we pack our bags and turn the light off on the way out? Not quite.
The sheer speed of digital transformation means that we are only getting started in terms of demand for high-quality software engineers.
There are also a host of other practical reasons why outsourcing makes no sense for some companies that we will cover below.
Why are software engineers outsourced?
Each company has its reasons for outsourcing talent and pulling in teams from around the world. Let’s take a look at why some programming jobs are being outsourced.
Software developers cost a lot of money.
Companies in silicon valley are willing to pay programmers $150,000+ a year. In the lower cost of living area, this figure falls, but software engineers are still among the highest earners in the country.
When discussing the outsourcing of software engineering, the cost is arguably a prime factor.
Before the tech boom of the last two decades, expertise was a lot harder to come by. Outsourcing your development means immediate access to the skills that you need without a long-term commitment to the employee.
Access to a larger talent pool is a top reason why businesses opt to outsource their developers.
After all, if you need people who are good at math it’s easier to buy them in than train them from scratch.
What if you only need extra development capacity during a large project? Or need an experienced software engineer for a short period.
It’s easy to see why companies choose to outsource development in the situations above. It offers them the opportunity to scale up or reign it in at a moment’s notice, without having to train or upskill new staff.
Focus on core strengths
If you run a small product-focused business and your strengths lie in marketing, then building a software development team from scratch is a difficult prospect.
Outsourced software engineering solutions take the pressure off and allow companies to focus on what they are best at.
If you have a big project that needs to be completed quickly, hiring and training scores of the staff aren’t the way to go. Getting people up to speed can take quite a lot of time.
Outsourcing your development means the work goes to an engineering team that is incredibly cohesive and familiar with one another. Overall this gets the job done faster.
Why software engineering won’t be outsourced
We’ve taken a look at some of the reasons why software engineers will be outsourced. Many of the reasons make practical business sense in the right situations.
Outsourcing does have its place but in general, companies benefit from keeping things in-house. So let’s discuss why programmers won’t be outsourced.
1. Talented Local Software Engineers
The talent of local software engineers has improved dramatically over the past twenty years. It’s one of the reasons why the U.S. is so prominent in the tech industry.
Whether it’s someone wondering whether React is worth learning or battle-hardened technical leads, the overall quality of programmers has increased.
It means the need to look abroad in search of quality has declined.
2. Project Quality Assurance
Companies building customer-facing apps or products need to make sure they work correctly.
Quality Assurance has become a huge part of the software engineering world, and you lose control over this step when you outsource.
If you have outsourced to a contractor serving multiple customers who are to be sure they are paying your product the attention it deserves. Keeping QA in-house means a company gets more control over the finished product.
Quality is king, and it’s one of the reasons software engineers will not be outsourced.
3. Intellectual property rights
Countries outside Europe and North America don’t have the same laws regarding intellectual property rights. As a start-up with a big new idea, keeping your code away from prying eyes is imperative.
Outsourcing the coding adds another layer of risk that most companies in search of unicorn status aren’t willing to take.
4. Rising Costs
Homegrown software developers still cost more than contractors from developing nations. However, gone are the days of pennies to the dollar-type salaries.
While you are still going to save money it is important to remember that a lower hourly rate does not mean lower total cost. The other issues that arise from outsourced code can increase costs significantly.
Before a single line of code is written most stakeholders will have understood the needs of the business, elicited requirements and completed designs. At a minimum. Not to mention use cases, client interviews, and workshops.
When working in-house, there is usually a well-defined process and, changing things must go through this process. However, when something is outsourced things can easily grind to a halt if changes are made.
The lack of direction also causes a drop in quality and increases the length of a project.
Clear, concise communication is a key reason why the outsourcing of software engineers is unlikely.
Having the same people work on a codebase over a long period has fantastic advantages. They understand how and why things were written and can make changes accordingly. The longer they work on it, the more efficient the entire process becomes.
When outsourcing your web development, you give up this control which can eventually cost you a lot of time. You simply don’t know who is being added and removed from the project.
Also, echoing the sentiment from the last point, poor communication is an incredible time sink.
7. Business Support
Most applications are not built in isolation. They serve the business purpose of helping a team achieve a specific goal.
If your programmers are in a completely different time zone to your administration and support teams, then there can be a serious lag between an issue being reported and fixed.
It’s important to have a team on hand to support the business. You don’t want a 2-minute task turning into a two-hour ordeal.
Does software engineering have a future?
As we discussed earlier, tech is one of the fastest-growing industries across the globe. It is without a doubt that software engineering is here to stay, with or without outsourcing.
The internet has been around for a few decades now, but many industries are still in their infancy regarding technology. We’ve seen a massive shift online in recent years and this trend is set to increase.
It means that there are fantastic opportunities in the Health Tech, eLearning, eCommerce, and FinTech sectors to name a few.
Automation is a big concern in other industries. Thankfully the very nature of programming means that software engineering isn’t going to be engulfed by AI anytime soon.
Benefits of outsourcing for software engineers
Companies aren’t the only entities that benefit from outsourcing. Software engineers can benefit from outsourcing if they capitalize on it correctly.
By marketing yourself right you can work for companies right across the globe.
In a short amount of time, they have landed themselves gigs with small companies in other countries to get onto the job ladder.
For more experienced developers, it gives you the opportunity to freelance and travel while maintaining a job for a business abroad.
Cost of living
If you work remotely as a contractor and live in a low-cost living area, you could be in for a real treat. You get the positives of a good salary while avoiding overpriced and busier parts of the country.
It gives you the opportunity to earn a fantastic amount of money while keeping your costs low.
Project & Team Diversity
Working on new things is always interesting. People who enjoy the thrill of diving into new situations would love contracting work. You get to experience new teams and projects all the time.
If working for one company isn’t your thing, then the ability to contract yourself out and work as a resource for another company is invaluable.
Software engineering is unlikely to be outsourced because communication and team bonding often matter more to a project’s success than purely technical skills.
Thankfully software engineering isn’t a zero-sum game. If a job is outsourced, that job does not simply disappear domestically. There is, and always will be ample opportunity.
Nathan Britten, the founder and editor of Developer Pitstop, is a self-taught software engineer with nearly five years of experience in front-end technologies. Nathan created the site to provide simple, straightforward knowledge to those interested in technology, helping them navigate the industry and better understand their day-to-day roles.