Jim Honerkamp, CIO at building-materials company Clopay Corp., knows his decision to outsource two-thirds of the company's technology work, including sending database administration to contract programmers in India, infuriated some of his staff. "IT people went to human resources and said I was destroying the department," he says. "And one time someone asked what kind of car I drove. I think the intent was to flatten my tires."

Yet Honerkamp has no regrets. Clopay executives decided years ago to outsource tasks that aren't core to the company's mission, and it's Honerkamp's job to implement that strategy in IT. "Would my boss hesitate to take me out and replace me with a more-effective way to get my job done to make the business more profitable? No, he wouldn't," Honerkamp says. "If I hire a very talented Oracle developer, but that developer is going to charge me three times what I'd pay offshore, then I will not measure up."

From a social perspective, Honerkamp says offshore outsourcing bothers him a bit. "But then again, what do you do?" he asks.

Clopay employees complained to human resources that CIO Honerkamp was destroying the department by having IT work done offshore. Photo by Bob Stefko

Honerkamp isn't unusual in his concern about the tension and backlash that comes from sending jobs overseas. Where he's exceedingly rare is in the blunt honesty with which he's willing to discuss it. The movement of a portion of high-tech jobs from the United States to cheaper labor markets in India, China, Eastern Europe, and elsewhere seems irreversible. Analysts say it's a vital strategy on which companies will depend to stay competitive. Yet many business-technology managers are uncomfortable discussing offshore-outsourcing decisions with people outside their companies, a fact that may contribute to their doing a poor job of communicating those plans internally.

But they'd better learn to talk about the issue. The difficulties of discussing offshore outsourcing with employees may soon pale in comparison with the impact of the political and social debate that's brewing. At issue is the cost offshore outsourcing extracts in terms of American jobs and the U.S. economy. And outsourcing isn't the only concern: The practice of bringing lower-cost foreign technologists into the United States on work visas also faces scrutiny.

Unemployed technologists and other white-collar workers who oppose offshore outsourcing are increasingly vocal and organized, and in recent months, members of Congress have introduced bills that could crimp the conventional offshore-outsourcing model by limiting foreign work visas or giving tax breaks to companies that keep jobs here. Executives considering offshore outsourcing need to monitor the political issues, and those who decide to go ahead must be prepared to articulate why it's so important.

The rancor over offshore outsourcing isn't only changing how executives need to talk about the issue, it's also changing the nature of the risks involved with sending work abroad. "Whenever we assessed the risk of offshore outsourcing for clients, it came in the form of, 'If you move your cash flow and transaction processes to India, and India has [political upheaval], what will it do to your business?'" says Eduardo Alvarez, a VP at consulting firm Booz Allen Hamilton. "Now there are perceived risks in the [U.S.] market. What will the market backlash be to a consumer company if it moves its business overseas?"

Booz Allen Hamilton co-sponsored an outsourcing conference last month at the Waldorf Astoria in New York that included discussion of moving jobs overseas. As the business-technology execs arrived at the hotel, dozens of protesters accosted them. "It surprised people," Alvarez says. "It made them think about proceeding with their eyes open."

Joe Drouin, CIO at TRW Inc., sees the changing mood. TRW has a 600-person IT staff supplemented with 40 contract employees in India. The auto-parts company hired Indian IT-services firm Satyam Computer Services Ltd. three years ago, "but only in the last five or six months have I heard negative feedback [about offshore outsourcing] in the press and personally," Drouin says. The pressure won't change his staffing formula, but changes to U.S. policy could. "Unless the government steps in and makes the whole notion of offshore outsourcing less promising financially, we're committed to it," he says. "But there has been a lot of talk about taxing it and all of the kinds of stuff government could do to protect U.S. jobs."

Drouin and Clopay's Honerkamp say they haven't laid off U.S. employees; work sent overseas replaced open and new positions. In Clopay's case, most of the IT jobs that have disappeared in recent years went to U.S. services companies at which Clopay employees were offered jobs. Its contract for Indian workers through services firm Sierra Atlantic is relatively new.

Drouin and Honerkamp haven't had to deal with any outsourcing controversy beyond their companies' walls. But a few companies, particularly those that replaced U.S. workers, have been stung by the backlash. Their experiences illustrate why some companies say little, if anything, about their outsourcing plans.