by Julie Hanson

Labor – An Offshore Alternative

May 15, 20042 mins
IT Strategy

In May 2003, Jon Carson, chairman and CEO of Cambridge, Mass.-based startup cMarket, had just landed a big contract. The National Parent Teacher Association hired cMarket to build an Internet auction platform for fund-raising. Carson’s company, which builds such platforms, had to develop something fast?and on a shoestring budget. He needed to hire three reliable programming contractors, but he had some concerns surrounding offshore outsourcing, the cheapest option presented to him. “In product development, there are very tangible benefits to having your developers literally sitting next to the project manager and marketing people because they can get the nuances of product demand,” Carson says. Plus, in tech-battered Boston, he didn’t feel right outsourcing valuable jobs.

So Carson decided to advertise in The Boston Globe. The catch: He offered the positions at a relatively low salary of

$3,500 per month (or $42,000 annually), an amount comparable to offshore programmers’ rates but considerably less than the $80,000 to $100,000 typically commanded by Boston-area talent. Yet despite the lower wages, cMarket found no shortage of interest?in three days, Carson received

120 rŽsumŽs. He hired three people, two of whom have since become full-time employees with higher salaries.

Carson says his experience hiring locally rather than outsourcing was quite positive. The three contract employees helped cMarket ramp up for the PTA project and also contributed to new product ideas that eventually increased business. The end result: The company grew from a six-person startup to an operation with 30 employees.

Carson says he investigated offshore outsourcing, but decided that it wasn’t the best option for cMarket. He was particularly concerned that offshore programmers wouldn’t be able to help cMarket get off the ground given that he had to communicate his business strategy and goals to distant programmers with no stake in his entrepreneurial dreams.

Because of the success of his approach, Carson has been touting it to other CEOs in similar situations. And executives seem to be interested. Carson has received numerous phone calls and hundreds of e-mails inquiring how he was able to grow his business without having to hire expertise abroad.

While cMarket’s stance won’t stem the tide of companies going the offshore route, it does offer an interesting alternative. “As corporate America is outsourcing, they are throwing good talent overboard,” Carson says.