Technology Back Offices Moving to Rural America

The trend away from offshore locations spells jobs for workers in hard-hit U.S. areas.

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.

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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.

Neema P. Roshania
Researcher-Reporter, The Kiplinger Letters