The content below arrived in my mailbox recently from a correspondent with extensive tech industry experience. He graciously granted permission for its publication here.
I have worked for tech companies as a developer and manager through the years and I have seen H1Bs and outsourcing cause a lot of damage. H1Bs are a total scam only used to drive down wages and boost company profits at the expense of American workers. Outsourcing also damages wages, but also opens companies up to lower quality products and intellectual property theft.
H1Bs were brought into large tech companies in droves starting in the late 1990s to early 2000s and it has just accelerated since. Where H1Bs couldn’t be used, the chic thing to do was outsourcing. The Ivy League MBAs, who have never coded anything in their lives, thought it would be a great idea to use outside coders to do development work and save some money. To top it off, there has also been a big move to overseas manufacturing, which has resulted in intellectual property theft of grand proportions.
These ideas have caused a lot of damage to the U.S. tech industry and are killing us competitively.
Outsourcing is a total disaster. You take a bunch of people in another part of the planet in a time zone almost exactly opposite of yours so nobody can communicate in real-time. Then you throw in a language barrier and cultural issues. Chaos ensues.
Big Tech Company I worked for did this with large parts of their Quality Assurance (QA) apparatus starting in the early 2000s and it was a train wreck. The process of coding is something most MBAs don’t understand because they have never done it. Often when there is a bug in a piece of code, you want QA people to be able to walk over to the developer that wrote that part and show what is going on and replicate it. That is impossible to do when QA is in Chennai, India and sleeping when you are working or awake when you aren’t at work.
MBAs thought it would be more efficient to have coding done during one 12-hour time zone and QA in another. That way when developers got to work in the morning they’d have this nice list of bugs that QA found. But this isn’t how it works. Bug resolution under this model takes forever and quality falls off because of the communication issues.
1) India QA finds a bug and it takes 12 hours for development to see the report.
2) Then development fixes it and it takes 12 hours to get an answer if it passes QA.
3) Then QA reports back it still has a problem.
4) Repeat for days on end.
This makes something that should have taken a short amount of time with face-to-face contact take days or weeks. Plus, Indians are not very good at abstract thinking in my experience and will only do exactly what you tell them to do and nothing more. They are just there for the bucks and honestly don’t care about anything else. It’s a cultural issue. The Indian QA clicks a button to say it works or not. They don’t poke around to help isolate what is going on.
Same thing goes for outsourcing development. Big Tech Company started doing this at one time and I knew it would be a disaster and it was. Horrible code, no real creative thinking, and everything took much longer to complete because it often needs to be re-done by people that know what they are doing.
There was zero money savings in it I’m sure, but the MBAs just kept pushing it. Again, they don’t know what’s involved and think developers are interchangeable cogs vs. what it really takes to code a product that works reliably.
The next step was bringing in H1Bs. The way it works is that their visa is tied to the employer sponsoring them. They cannot move jobs easily so they are basically indentured servants. They can be paid lower wages and cannot leave without jeopardizing their sponsorship. They are, in other words, the perfect corporate worker drone for the MBAs and executives.
Of course, even their lower wages are better than they would get working in India so they flock here for jobs. They will stack up 4, 5, 6, 7 to a house for cheap rent and just work for a few years and go back to India. Or, they will try for the Holy Grail green card. They will often have degrees that I suspect are mostly worthless or fraudulent. They also often are being sent over from a bodyshop that has heavy nepotism.
The point about nepotism is not a joke. They are sometimes cousins or distant family members getting work for each other. Working in the U.S. is very high status to an Indian male and they know if they save money for a few years and live cheap they can go back to India and get married and have a good life after. Because of this, they have no real dedication to the company or work. And really can you blame them? They know the game and are playing it as they can.
But the thing is that Indian workers mostly suck. They again have something culturally where I find them very limited abstract thinkers and will largely do only what they are told and that’s it. My experience (and that of others) is that they are not going to be the guys to come up with a creative solution to a difficult problem. They will be the code monkeys that can get basic stuff done, but not really to what I’d consider a high standard original thinking that an innovative company probably needs. They are warm bodies pumping out code. Again, I don’t think companies are saving any money because you probably need 2-4 H1Bs to make up the work of one good American employee.
To a certain extent I find the Chinese also not terribly creative problem solvers even though they are smart in other specific areas. But I have less experience working with them. However, I think Chinese nationals are a huge intellectual property theft risk as I discuss below and shouldn’t be hired either.
Next up of course is that when you bring in foreigners it destroys the culture of a development shop just as it does a community. You can’t communicate between groups easily, the jokes are not shared, you have different languages being spoken, etc.
It’s a very bad environment for white workers to be put into and is isolating. Who wants to work around people speaking languages you can’t understand and they need to stop to translate for you constantly? For all you know, they are talking about you right in front of your face.
What companies see then is when white developers are in the minority the resignations seem to accelerate. The teams will go nearly all H1Bs/Indian/Asian as you get developer white flight (is that a new meme: Developer White Flight?). It really is no different than a neighborhood transitioning from all white to all diversity over time. Your best people will leave first and will be replaced by lower skilled imported workers.
Also, we see ethnic nepotism come in again. Ethnic nepotism is *very* strong with H1B Indians and Asians. I know one executive for instance that banned any Indian manager from making final hiring decisions. They found that the Indian managers were only hiring Indians and clearly not the best people. They were likely cashing in favors for people back home.
The above is why you see many development teams in the states going full Indian or Asian in many cases. The managers are hiring only their own co-ethnics in a way that whites won’t do out of guilt and potential punishment. White people, even if interviewed for the job, would likely not get it or even remain on the team. They just won’t fit in.
All of this discourages American workers from going into tech because they know that at any moment they could be asked to train their helpful Indian replacements. It’s disgraceful and companies that do this should have the crap sued out of them.
Intellectual Property Theft
Many companies underestimate the risk of hiring foreign nationals in terms of intellectual property theft. The reality is that if you are hiring, for instance, a Chinese national there is a chance they could steal from you. One Chinese worker I knew explained the way it could happen:
1) Chinese worker is in the U.S. doing their thing. But where is their family? China.
2) Chinese security agencies approach them either in the states or in China on a visit. They say we just need you to copy whatever you can and give it to us. It can be anything, but just do it.
3) “Why should I comply?” says Chinese national employee.
4) Because if you do your brothers/sisters can get into that good school or get that good job back home and your family will do well. But if you don’t, well your family could have some bad luck. Really bad luck, you understand?
And really this isn’t rocket science and is obvious to everyone except MBAs. The Chinese have deliberately sold tainted baby formula in the past. They are not known for their high ethical standards.
I know one company where the exec was saying their trade secrets are protected in a particular way with limited access, etc. He said they had some Chinese workers that he felt could have been compromised when they went back to China, but that they secured their trade secrets and limited access to them so they were “safe.”
I thought that this was foolish beyond words. If you think certain employee prospects are going to steal, you’re better off not hiring them at all. Don’t hire them to see what they can pilfer that you didn’t think about.
To top it off, companies send their manufacturing to China and then act surprised when nearly identical products show up on the market under a Chinese brand in six months. It is a completely idiotic business plan to trust these people.
When you deal with corrupt backwards cultures you are going to get corrupt backwards cheating. But these companies doing these things just care about short-term bucks. They don’t think very long-term and now they are paying the price. Now, U.S. companies are now seeing Chinese tech catch up to them based on manufacturing know-how they sent there. They are fools.
Those are just some of the problems with outsourcing and insourcing. The tech industry of the U.S. is gutting itself and it makes me angry thinking about it at times.