Outsourcing to India creates at least one American job

When a U.S. company opens shop in India, someone has to teach the two sides how to get along

Latitude News staff By Latitude News staff

Workers sit beneath clocks displaying time zones in various parts of the world at an outsourcing center in Bangalore, February 29, 2012. (Reuters/Vivek Prakash)

In 2011, American companies outsourced 2,273,392 jobs. Destination number one: India.

And while much mud was slung on the presidential campaign trail over whom we should blame for outsourcing, one thing is clear: there is money to be made in helping American companies set up shop abroad.

When opening an office in India, or subcontracting work to an Indian firm, an American company may be saving money; but it is also inviting a host of communication problems due to gaps in language, culture, time zones and the complexities of transferring knowledge from, say, Minneapolis to Calcutta.

That’s where American Vicki Flier Hudson comes in.

Hudson is Chief Collaboration Officer for Highroad Global Services, a consulting agency that helps streamline the information divide between Western companies and their outsourced employees.

Hudson is uniquely qualified to fill the communication gap that is inevitable when jobs are outsourced, or “offshored.” She spent 10 years working in corporate America, but that time was punctuated by extended periods when she quit her job in order to travel the world. Latitude News sat down with Hudson to talk about how she builds bridges between American companies and their Indian employees.

Communication breakdown

Communication underlies most of the problems Hudson confronts in corporate America.

“The U.S client,” Hudson says, “has the advantage of what I call hallway conversation knowledge,” or the ability to casually share information in person. Whereas the Indian counterparts are “thousands of miles away.”

Vicki Flier Hudson (Credit: High Road Global Services)

And not knowing what exactly is expected of them, Indians “might not know the right questions to ask,” or they might not speak up because they are eager to impress their American counterparts.

“So you put those two things together,” Hudson says, “and it often drags out the learning curve.”

Hudson says she frequently walks into situations where an “us and them” mentality has developed over months or years. She commonly works with companies that are meeting their goals on paper, but still lack trust between continents.

Hudson essentially provides a structured format for Americans to vent about their Indian counterparts, and vice versa. Workshops, surveys, classes, group discussions: all are designed to open the lines of communication and, hopefully, get each side to empathize with the other.

Communication often breaks down along cultural lines. But, Hudson says, she more commonly confronts resistance from the Indian side.

“I can understand that. I think there’s still a sense of mistrust that there’s going to be an American my-way-or-the highway mentality when India is now a world player on its own. And I think that there’s concern that the West doesn’t yet recognize that.”

It’s not all about the Benjamins

But many American companies do recognize that India is a growing source of talent. India’s workforce is four-and-half times the size of the U.S. population. And while many U.S. companies cut costs by paying Indians to do the same job at a cheaper rate, increasingly American companies are setting up shop in India to capitalize on talent.

An employee works on his computer at the office of CloudFactory, a Canadian startup that based itself in Kathmandu, where it hires teams of Nepalese, October 5, 2012.(Reuters/Navesh Chitrakar)

“One company I worked with,” Hudson says, “decided to offshore mostly for access to global capability. In other words people in India with certain expertise that they just couldn’t find in the U.S. And also they use the follow-the-sun cycle. They said, ‘Hey, while we’re sleeping, these guys are working.’”

That doesn’t mean the bottom line is not still a big driver for “offshoring.” Hudson says that a Chief Information Officer or VP of Finance typically make the decision to offshore. The numbers look good on paper, but that’s a far cry from training, employing and managing staff in another country.

“So you’ve got CFO Ms. X,” Hudson says, “and she decides we’re going to transfer 20 percent of our engineering over to India. She sees that the competitors are doing that. That’s a solid decision. But then she tosses that decision to the rest of the organization and says, ‘Make this happen.’ But nobody necessarily knows how to do that.”

Still, Hudson says most companies understand they won’t just start making money as soon as they open an office in India.

I think the average company now knows that it just doesn’t work like that. You have to assume that you’re in it for the long haul. If you look at it as a multi-point strategy, you’re going to be more successful.”

Bridging the culture gap

As more American and Western European companies open outsource jobs to India, China and elsewhere, changing technology has made it easier to communicate across oceans.

“What has not changed,” Hudson says, “are the cultural differences. I still feel that we’re not quite there yet in terms of building a bridge across cultures and creating a shared culture where there’s really team spirit and mutual understanding.”

And while the reasons for offshoring shift in an increasingly globalized world, Hudson sees one trend that will stay the same.

“I still see India as being the number one offshore destination for at least a decade,” she says.

And while that might not mean job security for many American workers, Vicki Flier Hudson will have work for some time to come.

Michael May interviewed Vicki Flier Hudson. Jack Rodolico wrote the story.