Published: April 30, 2008 10:52 pm      

Employers looking to local market as offshore alternative

Americans know all about offshoring, the practice of moving jobs to countries where labor is cheaper.

Now, some savvy Texans want to counteract the practice with “onshoring,” linking businesses with labor in the U.S. that might be cheaper than in the companies’ own towns.

It all started when business executive Jack Holt read about Sen. Barack Obama’s campaign stops in the region and learned Johnstown’s median income was about $21,000.

“We thought, ‘Maybe that’s a place we should look into,’ ” said Holt, chief executive officer of S3 Matching Technologies, an Austin, Texas-based software and information technology company.

Holt, Phil Gilbert and others already were developing Americans Work, a business coalition designed to connect companies seeking employees with communities trying to attract jobs. Gilbert is president of Lombardi, another Austin-based information technology company.

Later this month, Holt plans to recruit the first employees for the initiatives pilot project in Johnstown.

“It was a group of guys who got together who wanted to find a better way than offshoring,” Holt said.

Although some jobs inevitably will be more economical overseas, Holt said his research weighing costs and benefits showed Johnstown is be a better deal for many higher-skilled jobs.

Armed with the demographic research, Holt came to Cambria County to see for himself. The high-tech economic development infrastructure he found was more than impressive, he said.

“I went up to Johnstown,” Holt said. “It was kind of like those new shower curtains in the hotels that bow out: Why hasn’t anybody thought of this before?”

This region’s unified approach to economic development could serve as a model for other stressed cities, said Jim Moore, an Americans Work consultant.

“Johnstown has become iconic in terms of reinventing itself,” Moore said. “There are a lot of communities who can look to Johnstown and learn how to do this.”

Moore and Holt met with Johnstown Area Regional Industries technology director, Bob Shark, and others for a tour and to discuss the Americans Work vision. JARI leaders “got it,” Moore said.

“We didn’t have to go in there and educate people on what we were trying to do,” he said.

S3 Matching Technologies will hire two people for the Johnstown pilot program, and Lombardi will add three more. The employees will work locally for the Texas companies, handling work for the companies’ Fortune 500 clients, Moore said.

Although they admit they can hire Johnstown’s workers at somewhat lower salaries than in technology hubs, cost isn’t the only factor. Johnstown’s work force holds to traditional values that make them better employees because of their loyalty, Holt said.

“You have a culture up there that we really envy in South Texas,” Holt said.

“You have people who want to stay in one area. That’s the really attractive part of Johnstown: The employee loyalty.”

High employee retention rates reduce training costs, which is projected to keep Johnstown operating costs below those of offshore jobs.

“I’m very excited about it,” Holt said.