Offshoring of IT Jobs is the wrong move – Let’s CheckMate the Outsoucers

Check-Mate the OutsourcersThis is an open letter to the Corporations who are engaged in the Outsourcing of our IT Jobs Offshore.

To All Firms Involved in Offshoring IT Jobs:


Your present efforts of reducing your operating costs by engaging in Offshore Outsourcing to support USA based operations is headed for failure.

The economic advantage of such a strategy is based on the fact that the offshore resource is not subject to USA Federal, State, Social Security and Medicare taxes and that you will not have to pay matching Social Security, Medicare taxes nor pay the unemployment insurance taxes.

You must be aware by now that such a strategy is doom to failure as it is based on a Tax Evasion effort and as the effort to offshore grows, the tax burden left in the USA based employees will have to increase to compensate for the “USA Tax Exemption” that the offshore resources and you illegally enjoy. That will generate a backlash in the USA to have the laws respected and enforced and you will be in the wrong side of this battle. The use of cheap labor in large quantities is not a winning strategy and it is condemned to failure.

A more enlighten strategy will be to use the old and proven method of improving costs and productivity by systematization and automation. It is true that such efforts will lead to increased productivity by the fact that fewer employees will be able to do more work. This process takes time to implement and that delay in the process allows for the labor force to relocate to new endeavors where their services will be in demand without a major disruption and the increased productivity by allocating the employees to where they are needed will raise the standard of living of all concerned and guarantee your organization’s continued acceptance in the USA market.

As to the Offshore efforts, it will prove very beneficial to the USA and your organization if you develop the Third World creating new markets but not by having your efforts financed by the USA taxpayers.

It is understandable that most of our CEOs are the product of the bureaucracy and that the time of the owner-entrepreneur is past and therefore with that we have lost the vision that those entrepreneurs possessed. It will serve us well to re-learn those skills or face the decline and fall of those that insist on using the general public as indenture servants.

Peningo’s solution to this problem is to bypass these “Offshore Outsourcers” and with the support of Peningo Systems Inc, contract directly between the Consultant and the End Client, thus, eliminating these ”Prestigious Ones” excessive Mark-ups and allowing for increased compensation for the Consultant while lowering the costs for the End Client.To All Americans:

If you wish to voice your opinion, you are welcome in commenting to this post. If you wish to voice your opinion to a greater authority….Congress and/or your State Representatives, please go to the Peningo Advocacy Assistance Page.

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About Edward Pellon

About Peningo Systems ( www.peningo.com ) Peningo Systems and it founders have been involved in IT Consulting for over 30 years. Our goal is to support the individual IT Consultant by providing an avenue for them to be in contact directly to the end client. By doing this we reduce the many layers and tiers of organizations that are involved with placement of an IT Consultant. By reducing these layers and tiers, cost can be significantly reduced to the end client, while still providing the room for the Consultant to increase their revenues. Peningo is a for profit organization. We have decided to earn our “keep” by advocating, establishing and supporting a “market place” where the IT consultant and the “end client” may function without the interference of tiers of “prestigious” companies that bring to the consulting assignment excessive Markups and very little else. At Peningo we feel that the IT Consultant should be paid adequate rates commensurate with their skills and the personal sacrifice inherent in the life of an IT consultant. These allows us to field capable, motivated consultants that will contribute successfully to the “end client’s” systems development and implementation, while attracting to the IT industry new talent that otherwise would go to more lucrative pursuits. With the elimination of the “prestigious ones” there will be costs savings that will allow for the consultant to be paid a higher rate and for the client to reduce its costs. Both objectives represents Peningo’s Mission.
This entry was posted in Contract Direct to the End Client, H1B, Intellectual Property, IT Outsourcing, Offshoring, Offshoring Intellectual Property, Outsource the Outsourcers, outsourcing, Outsourcing Intellectual Property, Software Rights. Bookmark the permalink.

One Response to Offshoring of IT Jobs is the wrong move – Let’s CheckMate the Outsoucers

  1. I had been offshoring software development work for some years now, and had an interesting thing happen. The Ukrainian developer that I had hired (who was/is absolutely outstanding) eventually moved to the US as a result of my business and connections. He is now a tax paying US resident! :)

    Some maybe interested in an article I wrote re the Myths of Outsouring Software Development Offshore: http://www.charlwood.com/top_7_myths_of_outsourcing_software_development_offshore.html

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