U.S. companies are embracing reshoring as supply chain woes and international tensions rise. The movement holds significant potential for future profitability and the job market, but the transition has proven difficult for many businesses. The challenges of reshoring grow clearer as the hype subsides, but that doesn’t mean companies should give up.

The tech industry, in particular, faces a lot of pressure to reshore but sees significant obstacles. The answer to these problems may lie not within supply chain strategies or specific technologies but with HR.

The Need for Reshoring in Tech

Tech companies account for more reshoring than any other sector. Electrical equipment manufacturers made up 41.6% of all reshored jobs in 2022, with computers and electronics coming in second with 25.6%. This uneven transition isn’t coincidental, either. Tech has more incentive than most industries to come back to the U.S.

The CHIPS Act passed in 2022 allots $280 billion to reshore semiconductor manufacturing amid global chip shortages. Tax cuts and funding from this program are driving more companies to set up U.S. manufacturing facilities, which require tech experts to run effectively. As more electronics manufacturing happens on American shores, it makes sense to reshore IT services alongside it to keep the two processes close.

Rising cybersecurity concerns make in-house or at least domestic IT services a more pressing issue. There’s also the simple fact that as businesses rely more heavily on digital tools, it’ll be more convenient to have support nearby.

HR’s Role in Tech Reshoring Initiatives

More companies will encounter the challenges of reshoring as these trends continue. These include high initial expenses, competition with other employers, difficulty finding tech talent and an unclear process for moving away from international labor. Businesses acknowledge these obstacles but may not see that HR is the key to addressing them.

HR’s role in reshoring is more than simply hiring U.S. workers and putting them on the payroll. The process also involves offboarding offshore labor, managing international contracts, refining candidate searches and ensuring new workers get up to speed quickly. These steps depend heavily on HR’s expertise and direct involvement.

How HR Can Address the Challenges of Reshoring

HR must play an active role in your organization’s transition to bringing tech talent back to the U.S. Here are five steps you can follow as an HR professional to overcome the challenges of reshoring.

Identify Which Roles Are Ideal for Reshoring

The first step is to realize that while reshoring is a net positive, not every position yields the same improvements from this movement. Some roles are more impactful to reshore than others. Recognizing and adapting to that dynamic will help spread out related costs and ensure a smooth transition.

Generally speaking, disruption-prone or time-sensitive jobs are the most beneficial to reshore, so start with these. In IT, cybersecurity professionals often fall under that umbrella. Global outsourced talent leaders China and India also face the largest cybersecurity job gaps, so you may fare better filling these roles domestically anyway.

Review your organization’s unique needs to find the specific roles that benefit most from being in the same time zone. Present these findings to company leaders to form a more effective reshoring strategy together.

Foster Talent From Within

You’ll likely encounter competition and difficulty when looking for domestic talent to fill tech roles. The demand for talent outweighs the supply in many areas, which is part of why so many companies outsourced these roles in the first place. However, you can overcome this gap and support reshoring by looking within.

You won’t have to compete with other employers if you can reskill existing workers to gain needed tech skills. This also simplifies the reshoring process, as it requires no onboarding or applicant outreach costs. Those savings, coupled with the fact that U.S. labor costs have remained steady for a decade while international ones have risen, make reshoring initiatives more financially viable.

Effective reskilling programs may take time to develop. However, the cost and productivity savings will compensate for that disruption before long.

Don’t Overlook Offboarding Concerns

Offboarding is another critical challenge of reshoring and is often overlooked. HR departments should pay attention to this step, as it could lead to complicated legal and security issues.

Review employment contracts and project charters for terms your business must abide by. You may have to wait until a certain time or give international employees a specific amount of notice before letting them go. Be sure to check local laws in their countries, too.

Another easy mistake to watch out for is leaving an employment gap. Many IT functions are mission-critical, so you must keep international workers until after you hire and onboard domestic replacements to ensure constant services. HR teams should also create a formal, specific offboarding process that includes removing old employees’ access to prevent insider breaches.

Streamline the Onboarding Process

Another important part of reshoring tech talent as an HR department is making onboarding easier. Transitioning jobs between countries can be long and expensive, but you can minimize those disruptions by streamlining the process.

Artificial intelligence (AI) is one of the most helpful tools for this goal. AI solutions can automate much of the paperwork and standard communication involved while you focus on more sensitive matters. You can also review the current process to see if any steps are unnecessary or can be done simultaneously to bring workers on faster.

This streamlining has the added benefit of improving new tech workers’ morale and productivity. Recruiting processes taking too long is the leading cause of candidate resentment, which leaves new hires feeling negative about their employer. You can ensure an easier reshoring process by avoiding that.

Plan a Steady Transition

Avoid the temptation to reshore every position immediately. High costs and workflow disruption are common in these transitions, and trying to make dramatic changes in short periods will exacerbate them.

Expect the reshoring process to take six to 12 months, possibly longer at a larger company. That may make the transition seem intimidating, but it lets you focus on one step at a time and adjust to unexpected disruptions. It’s better to be prepared for a longer time than you need than to plan on a short one you must delay.

Be sure to express this to company leadership to manage their expectations. Emphasize how a steadier, slightly longer process will minimize disruption and costs, so it’s worth it in the end. 

HR Is Key to Overcome Reshoring Challenges

Tech reshoring challenges abound, but none of them are impossible. HR departments working closely with other teams and planning carefully can enable a smooth transition. The company as a whole will benefit from HR’s extensive involvement.