While the world’s attention has been focused on the tariffs that President Trump has enacted, threatened, reversed and paused, a very different announcement by the new administration is equally as consequential.
In April, the Pentagon canceled $5.1 billion worth of third-party information technology and consulting contracts that it deemed “wasteful” and “non-essential spending.” The memorandum detailing the contract terminations singled out three companies that are listed among the federal government’s 10 highest paid consulting firms.
These actions on tariffs and contracts represent two sides of the same coin. President Trump intends for tariffs to promote American manufacturing, create American jobs and spark a reshoring boom. By nixing consulting contracts, the Department of Defense is sending a related message to multinational system integrators (historically some of the biggest culprits of moving American jobs offshore): If you wish to continue doing business with the federal government, you must invest in more US workers.
Accenture, headquartered in Dublin, is a multinational behemoth with 774,000 employees working in offices and operations in 52 countries. Nearly 40% of its employees are based in India, while only 10% are in the US. Deloitte, headquartered in London, has nearly 40% of its 460,000 employees in the US, but its stated offshoring goal is to have roughly 30% of its entire workforce operating from India. Booz Allen Hamilton, the smallest and only American firm among the three, employs more than 35,000 workers at more than 80 locations around the world.
These three are hardly alone in seeking workforce solutions across the globe. Roughly two-thirds of US companies outsource at least one department because they’re unable to find low-cost and highly skilled domestic talent in information technology and business services. Many of these outsourced jobs are in tech-enabled services such as cloud computing, app development, cybersecurity, marketing, customer support, accounts payable, sourcing, procurement, and human resources management.
As technological capabilities rapidly evolve, it’s critical that American workers gain the tech and workforce skills that position them to take these jobs. There’s a deep well of potential talent that companies seeking American workers can tap into. According to the latest data from the Lumina Foundation, only 44% of American workers between ages 25 and 64 have a high-value credential that’s helping them earn a salary 15% higher than the median earnings of a high school graduate. And 52% of new and recent college grads are underemployed. Tech-enabled IT and consulting jobs are a route to economic prosperity — but only if we consider new models for economic mobility beyond America’s current system for career launch, which continues to be classroom, tuition, and debt-based.
We need a new approach that complements our existing education system and builds American talent in ways that actually meet the needs of employers without burdening students with thousands of dollars of debt. The good news is that companies looking to source homegrown talent have simple and effective alternatives to offshoring. One is an emerging set of apprenticeship programs, which provide earn-and-learn pathways to high-aptitude candidates who might lack the background and experience of traditional tech talent.
These programs reflect the reality that tech services jobs require skills that are easier to learn by doing versus learning in a classroom. In addition, a growing “experience gap” — where companies won’t hire for “entry-level” roles without prior relevant work experience — is limiting mobility into these jobs. AI is about to explode that experience gap into a chasm. Apprenticeships — despite being one of the world’s oldest methods for starting a job — are starting to look like a compelling new alternative to our broken education system.
The president has promised that these new tariffs on imported goods will bring about a renaissance of American manufacturing. But services are notoriously difficult to hit with tariffs, so a revival of American service jobs will require a different approach. The Pentagon’s recently canceled contracts might present that alternative.
If our nation believes in protecting and creating US jobs, we should be doubly zealous about our attention to high-opportunity areas outside of manufacturing. Higher-paying tech-enabled services occupations can offer American workers a lifetime of prosperity. New pathways to those jobs, such as apprenticeships, can help them get there.