More companies that once might have been tempted to pack up and move to cheap labor markets overseas are examining options closer to home.
Typically, they wind up paying a bit more to “onshore” the positions -- siting IT staff, support centers and the like in Missouri, Arkansas, Minnesota and Mississippi, for example -- but reap hefty benefits by avoiding the hassles of managing remote workers, often many time zones away.
IT labor costs in small communities can run up to 35% less than in urban labor markets and traditional tech areas such as Silicon Valley, Calif., according to the McKinsey Quarterly report.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Uncle Sam is helping rural communities become attractive options for IT backroom operations. The U.S. Departments of Agriculture and Commerce are administering a $1.8-billion investment fund targeted to bringing broadband technology to rural communities with poor or no access to high-speed Internet service. Making broadband accessible to more Americans in rural areas will lead to additional higher-skill jobs in many other parts of the country.
Companies putting IT operations in rural U.S. areas run the gamut from large to small. Among them are GlaxoSmithKline, Blue Cross Blue Shield and RJ Reynolds Tobacco. Small and midsize companies are the likeliest candidates to locate all of their IT back rooms in the U.S., according to Monty P. Hamilton, CEO of Rural Sourcing Inc., which provides recruitment, training and management services to businesses looking to set up domestic sourcing operations. Many large firms will probably continue to maintain some overseas locations while setting up others in the U.S.
Besides Rural Sourcing Inc., companies that can assist businesses seeking rural options include N.E.W. Customer Service Cos. and Onshore Technology Services.
-
You Don’t Want to Retire in Portugal: Here Are Three Tax Reasons WhyRetirement Taxes With the NHR benefit retiring and pension taxes increasing, you might rethink your retirement plans in Portugal.
-
Home Depot's Winning Ways Fueled Its 100,000% ReturnHome Depot's wide moat leaves little room for competition – and shareholders have profited as a result.
-
Trump’s Whirlwind Month of Crypto MovesThe Kiplinger Letter The Trump administration wants to strengthen U.S. leadership in the cryptocurrency industry by providing regulatory clarity.
-
Excitement Over AI Propels IT SpendingThe Kiplinger Letter IT sales set to surge in 2025 as businesses rush to adopt generative AI.
-
Donald Trump Tests His LimitsThe Kiplinger Letter President Encounters Legal Obstacles in Pursuit of Ambitious Agenda.
-
Another Down Year for AgricultureThe Kiplinger Letter Farmers brace for falling incomes, widening trade deficits
-
What To Know if You’re in the Market for a New Car This YearThe Kiplinger Letter Buying a new car will get a little easier, but don’t expect many deals.
-
How AI Will Impact Our Lives in 2025 and BeyondThe Kiplinger Letter Now that breakthrough artificial intelligence is here, the next decade of computing will be dominated by AI.
-
What Could Derail the Economy This Year?The Letter While the outlook for the U.S. economy is mostly favorable, there are plenty of risks that bear watching.
-
Three Ways President Trump Could Impact the EconomyThe Letter Some of Trump's top priorities could boost economic growth, but others risk fueling inflation.
