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4.2.2. Labour pool

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Although regarded as a secondary factor by the majority of the literature, the availability of skilled and flexible IT professionals in developing nations is one of the main drivers of offshoring. Shortage of qualified resources in my interviewees’ countries drove costs up and led them to look elsewhere for alternatives.

The important exodus of IT professionals in Europe from permanent to freelance employment in the late nineties resulted in a complexity in managing human resources and as technology became more diverse, freelance IT experts demanded higher consultancy fees and did only the contracted hours. Besides, companies became indisposed to invest in training resources as they were not certain of retaining their employees.

Firm1 expressed their apprehension of the instability of the European labour market in term of resources and cost.

« We are faced with a tight labour market in France. Very often, we can’t hire the necessary people we need and have to either pay very high salaries for employees or high rates for contractors. »

And with the opportunities created by the process of globalisation, firms have now access to new resources with the adequate knowledge on a worldwide basis. The combination of low cost and high quality software development workforce in Morocco made it an attractive option for European companies seeking to offshoring their IT projects. My respondents pointed out the search for specific skills and expertise such as knowledge of specific programming language and the desire for stable workforce as an important factor in their decision to move their projects to Morocco.

The country’s appeal includes wages for white-collar workers that are half those in Europe, a relatively high proportion of university graduates, and many citizens who speak French and Spanish. The population of Morocco is young and increasingly interested in technology. Roughly 70 percent of the population is age 30 or younger. The country boasts a large pool of human resources producing up to 50,000 university graduates annually. The education reform that began in 2000 has a more pragmatic approach modelled on the US system. The objective is to produce school-leavers and graduates with the appropriate skills to contribute to the economy (FDI Magazine, 2005). Primary education emphasizes science, maths and logic providing a solid base for later training and Technology fields attract some of the best Moroccan students each year. Firm1 acknowledged that:

« Morocco does not have abundant natural resources or a highly developed infrastructure, your strength is our human capital, which is young and dynamic. »
Firm3 recognized that their experience in Morocco prior to their offshore outsourcing offer enabled them to have a very positive outlook concerning the quality of Moroccan engineers and when they had to look for skills and expertise in new technologies such as knowledge of SAP, they knew that they can easily find these specific talents in the country.

« The availability of a skilled pool of French speaking developers with the latest technical knowledge, able to handle large projects and produce quality software was one of the main reasons to outsource systems development projects to Morocco. »
They added:

« Our experience of the people, the culture and the infrastructure all indicated Morocco is a perfect global sourcing location which will complement our existing operations in other places. We decided to use our existing resources and our experience and knowledge of people here to open our offshoring centre in Casablanca »

In addition, Firm1 pointed out that mean time to recruitment tends to be lower in Morocco where they can employ people more easily and quickly than in Europe. They claim having encountered problems when it comes to quickly assembling resources in France or Germany at the start of big projects and letting these resources go when the project is completed.

The plentiful and qualified workforce available in Morocco has also been recognized by Firm2 who praised work value orientation in the kingdom. They noted that work ethic may be a little different from that held by the European labour force; employees in Morocco may be less demanding of their employers because just being employed in an international firm is an achievement.

Firm4 has also put emphasis on human capital, highlighting the willingness, aptitude and quality of the labour in Morocco. They spoke about of low cost, loyal force, close culture and surplus of IT graduates.

« When we relocated our first IT development work in Morocco, we found the highly educated and well trained individuals extremely motivated to work hard to improve their standard of living individually and for their families. This contrasts with the work culture in Europe, especially prior to the burst. »
Project management has been more problematical. Firm1 noted a lack of qualified project managers. They reported that the French side kept very careful watch on schedules on a daily basis. Some teams delayed turning over their part of the project because they wanted to make it perfect; one project manager wanted to totally redesign the system rather than patching it, leading to unacceptable delays and termination of the project.

« It took us few months before our Moroccan managers understood how we view deadlines. We decided it was necessary to bring our own manager on site for the first phases of the projects. »

Firm1 added that implementing corrective measures that where taken as a whole resulted in improved project management and system development processes.
My discussion with firm4 suggests that these problems related to project management are indicative of an industry going through a normal learning process and that the question of being on-time and on-budget was a relative one that depended on what could be negotiated with the client as the project progressed. A successful project was one in which the client was satisfied with the end result, and especially, one where the client became a repeat customer.

At its start-up time, Firm2 used mixed-teams and ensured that knowledge transfer was done. This year, the company has maturated a team of Moroccan middle managers, all of whom are capable of operating with a large degree of confidence and autonomy; all of them have been with the company since its creation. They moved R&D department to Casablanca, where they intend to develop a long term strategy based on the lower resources attrition that fosters familiarity within the company.

The other respondents also claimed low turnover rates of their teams in Morocco compared to other offshoring centres despite a feeling that the growing demand for in-country work has given IT professionals the ability to demand more from their employers and that these companies feel a harder competition to retain talent than in the past. The relatively low turnover reflects job satisfaction and risk aversion for them.

The respondents for my study also praised the continuing performance of the educational sector and highlighted this as a key advantage of Morocco. However, all firms have argued that there is a need for programmers with more mass market skills. Firm1 has made particular effort to sustain and strengthen technical trainings for its employees for specific technologies. These employees had the technical skills necessary for the project but lacked the competencies linked to the application development. Thus, the company asserted that educational institutions should see themselves more as partners with these companies and that government should translate an educational response to offshoring into practical curriculum reform. As a result, the country is developing a training strategy to ensure a proportion of university graduates is well-suited to offshoring jobs, with the objective to train up to 25,000 recruits by 2009, from low skilled administrative functions to technicians, engineers and managers. Training centres for offshore services jobs and information technologies have been inaugurated in the main Moroccan cities and plans are already underway to boost recruits to 100,000 by 2015. However, the nature of the software work that is being offshored is changing rapidly and that it is difficult to forecast national supply and demand needs for software workers.

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