The return-to-office push continues to send shockwaves through all industries that hired remote workers, with many professionals opting to quit rather than give up flexibility. However, the reasons behind the push may not be so clear-cut, with evidence emerging that many companies are using RTO as a scapegoat to covertly lay off employees and cut costs. While outsourcing is by no means a new strategy to fill talent gaps, the recent spikes in IT outsourcing trends point to offshoring as the preferred solution for many players in the tech world. Whether you consider outsourcing to be a lifeline that will keep your company afloat or simply a way to branch out to the global market, the question remains: Is your company prepared to adapt, or will it be left behind?
Outsourcing IT talent and services should be looked at as more than just a cost-saving strategy, but rather as a path to fundamentally transform the way you do business. Sure, outsourcing offers access to a wider talent pool and may streamline operations, but it also comes with certain challenges like cultural differences, time zone mismatches, and potential loss of control over workflows. As you carefully weigh the pros and cons, productivity and profitability must remain at the forefront of your outsourcing strategy. While there’s no doubt that the future of IT outsourcing lies in how we measure productivity, first, let’s take a look at what’s going on with remote workers right here in the U.S.
The Great Remote Worker Exodus
Companies continue to mount pressure for remote workers to come back into the office, and many workers are digging in their heels, going so far as to quit rather than comply to the new policies. The pushback itself wasn’t that surprising, but its intensity was, with nearly half (42%) of firms who demanded their employees’ return experiencing higher than normal employee attrition, according to Unispace research. At the same time, nearly a third (29%) are now struggling to recruit new workers, further exacerbating the problem.
At first glance, this strategy might seem logically inconsistent. Why would employers ask everyone to start working on-site while simultaneously hiring from a different country altogether? However, there’s mounting evidence that suggests some companies have used return-to-office (RTO) mandates as a covert downsizing tactic. A BambooHR survey found that roughly a quarter of vice presidents and C-suite executives admitted to enforcing RTO policies to encourage employees to quit, effectively using these mandates as “layoffs in disguise.” Similarly, about a fifth of surveyed HR professionals said the policies were designed to push people out “voluntarily”.
A prime example of the covert layoffs strategy seems to be Amazon Web Services (AWS). In October 2024, unit CEO Matt Garman spoke at an all-hands meeting, announcing the company’s shift to work in the office five days a week. “If there are people who just don’t work well in that environment and don’t want to, that’s okay, there are other companies around,” said Garman. Naturally, his comments didn’t sit well with employees, with over 500 of them signing a petition asking the company to rethink the policy.
The employees at AWS are not alone in their rebellion, with similar stories coming from huge players in the industry, such as Meta, Google, IBM and Zoom. The growing tension within IT workplaces speaks volumes to the bigger problem at hand. Simply put, tech companies bit off more than they could chew when they doubled down on RTO, and now they’re struggling to find and retain skilled talent. According to Spiceworks, more than half of all hiring managers are facing difficulties in sourcing qualified IT professionals, even as 43% of companies plan to expand their teams in 2025. With demand for talent far outpacing supply, it’s no wonder businesses are increasingly looking for outsourcing to heal their talent drain woes.
Further adding fuel to the seemingly unstoppable outsourcing flame is the fact that hiring skilled professionals in popular IT fields, like ML engineering, from abroad is generally a more cost-effective strategy than hiring stateside. For instance, in the US, the average annual salary for a senior ML engineer is approximately $153,400, whereas the average for the same role is one-third of that figure, at around $54,400, in Eastern European countries like Ukraine.
With everyone scrambling for experts and the huge gap in pay between local and outsourced workers, businesses are casting their nets far and wide to stay ahead of competition. However, monitoring the latest IT outsourcing trends, deciding which country to source talent from and keeping track of their worked hours simply isn’t enough. Companies need to make sure their teams, whether they’re in the office or halfway across the globe, are delivering on promises and driving the business forward. A result-driven approach is tantamount to success, so it’s time to stop watching the clock and start keeping an eye on the scoreboard.
Focusing On Value VS Hours
Among the chief complaints in the recent wave of RTO mandates are the strict monitoring policies that came along with them. A survey conducted by BI firm Morning Consult revealed that over half of tech employees would rather quit than accept workplace monitoring through audio, video, or facial recognition for productivity tracking. Of course, giving employees free rein to do whatever and whenever they want is not a viable option, but employee monitoring must be done ethically, with a clear emphasis on tracking productivity.
Happy employees lead to happy customers, and micromanaging is a surefire way to kill morale, increase turnover, and eventually finding yourself back at square one. Research shows that employee satisfaction boosts customer loyalty and reduces turnover, both of which fuel sustainable growth. If you want to outsource effectively, you need to direct some of your focus on monitoring actual productivity, instead of putting every single thing your workers do under the proverbial microscope.
Take Basecamp, the project management software giant, for example. They decided to outsource some of their development work to free up their in-house team for bigger, higher-value tasks. By passing off certain types of jobs to external teams, Basecamp kept things running smoothly while the team at home focused on polishing the product and wowing customers. But as Jason Fried, Basecamp’s co-founder, wisely said, “The beauty of remote work is that the work itself becomes the measure of success.” You won’t hear him preaching about rigid 40-hour workweeks or obsessing over employee screenshots, because results matter more than surveillance.
To make their outsourcing strategy work flawlessly, Basecamp needed a way to keep an eye on external teams without creating a culture of distrust. Enter Traqq – a tool that could’ve been their secret weapon. Instead of spying on every minute worked, every keystroke made, and every jiggle of the mouse, Traqq uses AI to track productivity, not just the hours spent in front of a computer. With its powerful analytics, it’s the ideal tool for refining workflows, fostering trust, and ensuring that both in-house and outsourced teams stay aligned and productive.
The Outsourcing Double-edged Sword
Let’s say you now have ethical productivity monitoring software in place, and you’ve decided on a market for your outsourcing needs – what else do you need to consider when outsourcing? Miscommunicated expectations, clashing work cultures, and time zone quagmires can throw a mighty big wrench in the gears of your operations if you’re not careful.
A big hurdle to jump when your team becomes distributed across the world is data security. Handing over sensitive information to teams across the world without proper oversight is a risky move that can easily backfire. Whether it’s activity data or anything else that may be confidential, encryption and safe storage are essential to keeping your information safe.
The tools you use need to be able to spot red flags and make sure everyone is playing by the rules, otherwise you’re at risk for data breaches and regulatory compliance troubles. Not only does this build trust between companies, their outsourced teams, and clients, but it also keeps valuable intellectual property under lock and key.
Quality control is another big worry. Let’s face it – businesses often fear that outsourced work won’t measure up to their in-house standards. When your team is scattered across the globe, it’s tough to keep tabs on performance and fix setbacks before they snowball into huge problems.
With real-time productivity tracking and automated analytics, managers can spot where things are falling short and swoop in with targeted feedback. If a company sets clear performance indicators, communicates them well to the teams, and regularly monitors productivity, the chances of poor performance are kept to a minimum.
At the end of the day, successful outsourcing comes down to finding the sweet spot between employees autonomy and accountability. By using smart workforce management tools like Traqq, companies can dodge the pitfalls and reap the rewards of a global team. With clear communication, ironclad contracts, and automated performance tracking, outsourcing can become a smooth and strategic part of your business – boosting efficiency without skimping on quality or control.
Productivity as the New Priority
To the uninitiated, outsourcing IT jobs can seem like just an easy way to slash costs. After all, what could be simpler? Just push everyone you consider ineffective out by instituting a strict back-to-office policy, then fill the gaps with a couple of devs who can string together an algorithm from halfway across the globe, right? Of course, there’s so much more to it than that, and the future of IT outsourcing depends on how we perceive this ideology.
Thankfully, companies are now leaning on smart tools and data-driven insights to track and boost the performance of their outsourced teams. By zeroing in on productivity, businesses can turn outsourcing into a powerhouse strategy, effectively guaranteeing that they stay competitive in a world that’s changing faster than ever before.
The focus has changed from simply saving money to driving real, measurable results, and the companies that thrive are the ones that embrace productivity as their north star. By leveraging tools like Traqq, businesses can ditch the guesswork, keep global teams in sync, and turn outsourcing from a gamble into a game-changer.
