In tracking what’s been pulsating through the outsourcing world recently, what rose to the top of my list are a few choice words in quotes that shaped the news and come under the category of “just when I thought it couldn’t get worse” –

• chop shop
• whipped cream and cherry on top
• discrimination

U.S. Senators Charles Schumer and Claire McCaskill proposed a Border Security Bill to collect $600 million to fund beefing up security at the U.S.-Mexican border by increasing fees that inevitably will penalize some outsourcing service providers. The proposal seeks to increase fees for H-1B and L-1 visa applications of companies operating in the United States that employ 50 or more foreign employees.

If Congress enacts the bill, the largest of the Indian outsourcing firms will foot much of the bill – to the tune of $200 – $250 million increase in their operating costs. But here’s why this issue is on the Outsourcing Pulse list:

Infosys, which derives over 66 per cent of its revenue from North America, employs around 12,000 people in the US. However, while discussing the Immigration Bill on the US Senate floor on Thursday, Charles Schumer, the Democrat Senator from New York, likened Infosys Technologies to a “chop shop” — the place where stolen parts are dismantled and sold.

I’m all for funding the border security initiative from some source other than government “stimulus money,” and I’m all for ensuring Americans have jobs. I’m also for outsourcing (if it’s done right) and offshore outsourcing (even though I personally lost work that was sent to an Indian firm to save money.)

Most of all, though, I’m for cooperating and collaborating. I believe better outcomes can be accomplished that way rather than through battles. Senator Schumer’s words sparked responses of discrimination and non-compliance with the World Trade Organization. He started an unnecessary battle with another odious comment.

Senator McCaskill, responding to comments that the outsourcing companies would have to hire more Americans, said, “That is the whipped cream and cherry on top of this sundae.”

Whipped cream, yes; but the cherry would have been collaborating with the Indian firms on a win-win way to achieve the end result of hiring more Americans without resorting to raising the visa application fees. And there would have been two cherries on top if Schumer had stuck to the facts instead of making a slanderous remark.

American businesses are not going to stop outsourcing — it’s a valuable tool to achieve important business objectives, far beyond reducing costs. So in the end, Americans will pay the Schumer-proposed visa application penalty fees if the outsourcing providers raise their rates to cover the increased operating costs.

I wonder why he didn’t propose penalty fees on “pork-barrel spending” as a way to fund the Border Security Bill? Maybe because he has a track record in that arena, having squeezed in $2,192,000 funding for the Center for Grape Genetics in Geneva. 

Since 1998, freelance writer Kathleen Goolsby has studied outsourcing relationships’ successes, failures, trends, and best practices. She has interviewed more than 860 executives at buyer and service provider companies and is the author of “Critical Requirements for Building and Sustaining a Successful Outsourcing Relationship,” a chapter in Global Outsourcing Strategies: An International Reference on Effective Outsourcing Relationships (December 2006, Gower Publishing). As a freelancer, she also currently serves as the Senior Writer for Outsourcing Center (whose parent company is sourcing advisory firm, Alsbridge) and has authored dozens of articles as well as white papers. In a past role, she was editor of Outsourcing Venture (a former print publication). You can contact Kathleen at ksgoolsby@gmail.com.

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