Outsourcing and the Effects on Technical Value
Over the past 5 years the face of IT has been going through some dramatic changes. What was once a highly specialized field is now becoming more and more common place and less valued by big business. Since we provide technical support services related to hardware, software, and networking this article will concentrate on that aspect of technical services, but keep in mind that this phenomena has spilled over into almost all areas of IT.
In recent years the cost of getting someone to support your network and do installations was around $100-$300 an hour, and it still is for business who employ vendors and third parties to provide technical support for them. For many years providers teamed up directly with second or third parties to complete work on a contract basis. The customer would hire a company directly who would then employ a third party who would contract the technician, the technician would do the work and get paid. This worked out well for all parties involved.
Then something happened. These new companies starting emerging with all sorts of names, but their business plan was the same to put themselves in between the consumer and the third party contractor in order to make money. So now we had a 4th party hiring a technician contractor to do the work, which lowered the pay of the technician, by about 40%. Many technicians, at this point, opened their own business’s and storefronts attempting to deal directly with consumers and business’s. The technicians who were left started taking jobs at a lower rate of pay. Then something else happened. A new breed of technician was born, the person who has little or no training and experience realized that they could get work by doing it even cheaper. Some of us in the business call these persons “pizza techs.” Meaning they do the jobs for some extra money to buy pizza.
Realizing that the cost of labor was getting even cheaper, even more new business’s started to emerge creating 5th and sometimes 6th party chains from the consumer to the end provider. The result of this was even lower pay until what we see in the current market emerged. Quality technicians became harder and harder to find, so companies devised ways of training and instructing less technical people to complete jobs, thus were able to pay them rock bottom prices. Many consumer do not know how many hands their work orders have passed through, because these companies work hard to make it all invisible to the consumer. The bottom line, although, is that customers are still paying the same costs or more, but receiving lower quality service.
Some ways to avoid poor service is to go directly to a local provider for your IT needs, avoiding any business who is almost strictly in retail. How do I know all of these things? Because I have been on both sides of the pendulum and dealt with these third and fourth parties directly. For instance, when you buy a warranty on your new TV or computer, you expect good service if something goes wrong, but in reality you are forced to call customer support, located overseas, it is time consuming and hard to communicate with non-English speaking people and when someone finally shows up to fix your problem, they are unprofessional, possibly close to literate, and do not care about your ordeal. Why? This person is the equivalent of a warm body often times, and if you are lucky a somewhat concerned individual. We have to ask ourselves this question, “if I was getting paid $30.00 to fix something that was $75 or more, how well of a job would I do?” This is by no means an exaggeration, I have seen work orders go out for these prices and quietly sat by and watched while they were accepted at face value.
The point of this article is to caution consumers and make them aware that the IT services they are paying for have often times been greatly reduced in quality so a few fat cats can make a buck off of them without them ever suspecting a thing. There are ways to help avoid becoming the victim of these unscrupulous companies and one way to hire someone local to do the work. Not only do we help our local economy by hiring local reputable computer and TV technicians, but we can be certain that the job we hired someone to perform has not gone through multiple vendors before reaching the person who is going to provide service to us.
Just like in many other things, until consumers demand better service for their money, these companies will exist. They have sucessfully circumvented the minimum wage law by not hiring W-2 employees, and often times are paying the equivalent of slave labor to complete the service contract agreements. There are still some good third party companies out there who pay a fair wage and hire quality technicians, but they are becoming more and more rare.
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