With new initiatives to keep jobs in America, President Trump intends to impose a border tax on companies that move their operations overseas. Scrutiny from the current administration has kept car manufacturers of likes of Ford, Toyota and Carrier to keep manufacturing jobs in the US, rather than moving to Mexico. But in all the chatter about manufacturing jobs, a lot of us have overlooked an industry highly serviced by offshore workers: offshore IT outsourcing.
If You Offshore, You Will Pay a Border Tax
President Trump made very clear in a technology meeting in his first 100 days in office that businesses considering offshoring options will have to pay. Trump specifically stated that “It you go to another country… we are going to be imposing a very major border tax”. Many experts in the technology sector—including the likes of Dell founder, Michael Dell, consider IT infrastructure and IT support as industries as prime targets for border taxation.
How much will your business be taxed for offshoring your IT Help Desk?
The numbers are yet to be seen. But the reality is that much of the Managed Service Provider (MSP) and IT Help Desk Industries—both of which rely heavily on offshore solutions would be affected. Rather than develop and cultivate an in-house team of expert IT Support Desk and Help Desk workers, many companies have opted to outsource part to nearly all of their help desk support services abroad. Many help desks have found cheap around-the-clock workers in places such as Northern Ireland, India and the Philippines—places where English is commonly spoken (though not necessarily American English!).
The problem these IT Help Desk and IT Managed Service companies face now is a potential premium for use of foreign workers. Indian IT Services firms have been bracing for an anti-outsourcing sentiment ever since Trump’s inaugural speech. The 150-billion dollar industry is bracing for protectionist measures from the Trump administration. While IT offshoring to India has been a common punching bag by past US presidents, the Economic Times of India feels that this time “things are more serious to be dismissed as just election rhetoric”.
Most Importantly: Your Outsourced Help Desk May Be Impacted
Since many MSPs and IT Help Desk solutions have been offshore friendly for many years, they lack sufficient trained technicians within the United States. If your company is relying on an American firm that outsources all or part of its IT Help Desk services abroad, you should expect either (1) reduced quality of service if offshoring becomes too expensive and since there aren’t enough American technicians available to fill their demands for cheap labor or (2) you should expect to pay a premium for the offshored service you’re currently receiving. (Just to be clear, Zog, Inc. hires technology professionals exclusively within the United States.)
A few things to think about when considering your IT Help Desk Options:
IT Help Desk Technician Demand May Increase—with more protectionist policies eliminating the viability of IT offshoring in the near future, IT departments and help desks have been investing more in recruiting talent within the US.
What does this mean for your business?
If you are planning on maintaining an internal IT Help Desk, you will likely have a much harder time hiring and maintaining qualified workers as demand for their skills increases. This means excessive costs to manage, compensate and recruit for positions critical to your organization’s operations.
If you are currently outsourcing your IT help desk—if your outsourced help desk offshores its workers, you will likely foot the bill for raising offshoring costs from new offshore taxation. That may mean that cost savings seen from offshoring may diminish and your organization may be much better served using outsourced solutions that are committed to hiring American help desk technicians that are fluent in American English and American business culture.
The demand for IT professionals is at an all-time high— with growing restrictions to H-1B visas for foreign professionals and a nearly completely utilized pool of technology workers, your business may have trouble competing for IT professionals in the future (and that includes IT help desk technicians). With a growing demand for skilled workers and a possible imposition on foreign and offshore workers, IT help desk roles—especially in-house positions—will be exceedingly hard to fill and retain. Now might be a good time to figure out your IT options and weigh the pros and cons to internal, offshored and US outsourced help desk solutions.
Are you offshoring your IT help desk? Are you content risking your entire internal IT help desk leaving simply because there are many other opportunities for them? Will you be able easily hire and maintain new workers? Contact me TODAY to for a FREE help desk consultation from a leader in IT help desk outsourcing within the US.