I worked for a company that embraced remote, distributed work long before COVID.
WFH doesn’t automatically lead to outsourcing, but it does move it a lot closer. Once the company dynamic has shifted to all communications and interactions being online, it’s very easy to add someone from a different country as long as the time zones aren’t too far apart and the logistics of employing and paying them aren’t too onerous for HR.
The company I worked for eventually did ramp up foreign hiring and perform layoffs in the US. It was just too to hard to ignore the fact that they could hire 2-3 engineers in foreign countries for the same price as a single engineer in the US in many cases. Or, as they discovered, they could pay 75% of US engineer wages and still be giving someone in a foreign country top-1% compensation for their country. This made for ecstatic, hardworking, loyal foreign employees. It’s hard to ignore situations where you’re paying less and getting more.
It didn’t mean that everyone in the US was laid off, though. Certain talents and specialties were still easier to find here than in foreign countries.
However, I think a lot of people are in denial about how much remote work is setting the stage for a flattening of global engineering compensation. Engineers in lower comp areas will see their salaries rise as they get access to more opportunities. Engineers in higher compensation areas are going to see downward pressure on salaries as they compete on a global stage. The exception will continue to be engineers with the most in-demand skills, who were likely already competing on a global stage.
The thing I never understood about this argument is that it seems to imply that working from the office makes one immune to the same outsourcing. Maybe it was kickstarted by the pandemic or maybe videoconference/remote tools finally hit the inflection point, but if outsourcing is easy enough now and is really the quality-for-cheap deal it proports to be, nobody is safe.
Commuting daily to some horrific open-office and sitting there with your headphones on isn't going to save you when the beancounters see that they can get an engineer at the same level in [cheap country] for 1/3 of what you cost. Even if having an employee sitting 30ft away is worth something, as you said, is it worth being able to 'hire 2-3 engineers' for the same price?
> The thing I never understood about this argument is that it seems to imply that working from the office makes one immune to the same outsourcing.
They key is the lack of friction. If all the employees are in the office, your one remote outsourced person is the outlier and teams will get annoyed having to deal with that person. If everyone is already remote, then there's no pushback at all from having another remote person -- and if they're already remote, why not hire from somewhere cheaper?
I think it comes down to, what is your time horizon? This difference may persist in the short-term, but as companies that hire remotely become more successful and profitable, we'd expect to see those that are in-office-only based in a high CoL market to be outcompeted.
Basically, the org structure ,communication and culture to run remote teams effectively are very different. This is why most traditional companies fail to outsource successfully. However, once the company has setup a smooth process and culture for running remote teams, outsourcing becomes quite achievable. If they can select and hire 1 in a million talented dev from the global talent pool to replace a slightly above average American dev, while only paying half the salary, I think they will certainly move towards that direction.
> The thing I never understood about this argument is that it seems to imply that working from the office makes one immune to the same outsourcing.
Communication patterns matter.
In the office, much communication is implicit or at least not committed to electronic format: "hey, can we grab an hour to whiteboard some stuff?"
In a fully remote environment, everything should be captured in an async friendly format. As other comments have mentioned, it's much easier to scale that communication mechanism to employees from different areas of the globe.
This is exactly my experience and I work at a very known tech company. As a manager I was told I can hire more people outside the US and was recommended to only hire in the US if I find someone who we really don't want to pass on. In other words, top talent would be OK, everyone else would have problems.
I actually don't call it outsourcing as people think about outsourcing as a way to get cheap labor in places like India or Eastern Europe. What I see happening is that companies are not looking for cheap labor. They are looking for talent and are not lowering the bar. They just prefer locations where they can afford that talent.
> As a manager I was told I can hire more people outside the US and was recommended to only hire in the US if I find someone who we really don't want to pass on. In other words, top talent would be OK, everyone else would have problems.
This is exactly what it turned into for us. We were encourage to hire most people outside of the US but to leave space for exceptional US candidates.
It’s a hard incentive to ignore when you can hire twice as many people within the same budget by going international remote.
But that also means you have the administrative headache of dealing with tax laws and other personnel regulations in other places — is your company large enough that it’s not a problem, or do you outsource the payroll/accounting/HR aspects?
I’ve found it’s easier to outsource maintenance and harder to outsource creation of software. Cultural issues coupled with time zone changes are difficult to overcome.
- as the other poster mentioned 75% US dev salary puts you in 1% in Eastern Europe, you will have no problem finding people with flexible work schedule adjusted to your TZ
Cultural issues are a thing in terms of understanding the US market - but that's up to your PMs/POs to handle. Cultural differences in terms of work habits, etc. go away with good compensation (if you're willing to pay for top people).
I think different people have different contexts on this. If you are an American in big tech earning the highest wage, then outsourcing could look like spending 75% and still getting top talent. But for everyone else around the world, outsourcing can only mean getting the bottom talent because they were already mid tier wages.
I’m in Australia and our company has mostly local with some outsourced devs in Indonesia and while they try hard, they universally just aren’t very experienced. And as soon as they become experienced they leave because they can now make the same wage as the Australian devs.
I've had similar experiences. The outsourced engineers work locally when they graduate from college (or sometimes, "coding bootcamp") until they get good experience and can match it with engineers in higher wage countries. Then they leave their home countries for the higher wages overseas.
The standards of education are often lower in lower wage countries. Sometimes it'll be full college, often people will just complete a coding bootcamp then call themselves a software engineer.
> as the other poster mentioned 75% US dev salary puts you in 1% in Eastern Europe, you will have no problem finding people with flexible work schedule adjusted to your TZ
Assuming the US salary is $150k, 75% of that is $112.5k. It probably is in top 1% in EE in general, but definitely not among developers. If you're senior, you can find a remote position paying that much in one of Western European countries.
> I think a lot of people are in denial about how much remote work is setting the stage for a flattening of global engineering compensation.
Thank God someone said it. I have an odd quality – among my uncountable bad qualities – that I can’t lie to myself, and Lord almighty the number is shocking of otherwise-smart engineers who are capable of virulently believing something that’s plainly wrong, when the alternative is uncountenanceable for their psyche.
And yeah, the proposition “the incredibly high salaries engineers are paid (relative to the time, effort, intelligence, and miscellaneous skill demanded to pick up the metier) are a historical bubble – albeit a long one – and will not continue for our lifetimes” is without a doubt one such belief. People have different ways of rationalising their refusal to accept it, mostly either (a) that it’s gone on for decades already / you naysayers have been saying this for decades already[0] /c or (b) some miscellaneous argument for why our job is uniquely insusceptible of possibly being done by an Indian despite the evidence thereof (my favourite is the “but who will train the [robots/Indians/c]?”, as if self-hosting Indians will take centuries to be invented), but either way everyone has a reason. That old cliché that ‘it\’s difficult to get a man to understand something when his salary depends upon his not understanding it’ has never made so much sense to me as when I first asked this question.
[0] This is a weirdly tropical fallacy used to reject all manner of things. “Millennials are lazy/disrespectful/entitled/&c.” “Oh yeah? Well, people have been saying that kids are lazy/disrespectful/entitled for centuries!”
I think you are overly discounting time zone. Someone working remotely, but within 3 time zones, is much easier to collaborate with than someone 9-12 timezones away.
Properly managed, a team with members in multiple time zones can be enormously productive if the work is such that it can be handled in shifts. Software can actually be done this way. You have to be culturally willing to do it.
"Properly managed, a team with members in multiple time zones can be enormously productive if the work is such that it can be handled in shifts. Software can actually be done this way. You have to be culturally willing to do it."
It's horrible for the people who have to work in such a system. We have people in India and during phases where you have to collaborate a lot, either the US people or the India people have to constantly work at night. And the company demands this in addition to regular working hours. We also have people in South america and that's much better to deal with because working hours overlap during the day.
outsourcing doesnt necessarily mean india/eastern europe. we had great luck with south america and they were able to work the same time. this was a few years ago, the contracting company thought we were a little abnormal at the time, but everyone put on our project went through a regular interview so they were talented, and were treated as a member of the team instead of some remote contractor.
I co-founded a startup as the technical co-founder. Left after a few years. They leaned on a local development shop in the same town. Development shop got bought by one of their clients (not the startup). They found some developers in South America and have been using them ever since.
I don't talk to the founder much, but when I do, it is clear they have no problems with remote talent (other than that they'd like to hire 1-2 more developers and are having a hard time finding them).
> they'd like to hire 1-2 more developers and are having a hard time finding them
Sound familiar? It's surprising to hear this so early in the 'remote-first' trend. I think what we'll find is that actually, there is still a dearth of top software talent (even if you include hiring worldwide). It will probably depress wages some, but not as much as people think.
From direct experience - It’s not that hard to stand up entirely separate teams and eventually entire departments in foreign countries. Communication then mostly happens by e-mail or during scheduled calls during narrow overlapping hours.
You’re right that it’s far, far harder to have teams built from members in opposite time zones. However, the people pushing for fully asynchronous work environments are building company dynamics that lend themselves to being timezone agnostic, so it can be done if you want it badly enough.
About half the US lives in the eastern time zone - so if the product manager wants to talk to an Indian programmer at 430PM India time, he has to start the meeting at 730AM Eastern time. This is the most convenient time to have the meeting usually. Another 28% of the US is in the central time zone, but that just shifts this meeting to 830AM for the product manager. The working hours don't overlap. On top of various other problems.
I think any company who could have and wanted to outsource has done it already. The incentives were already there and have been for 20+ years. There might be more blood to squeeze out of that rock, but not much.
If anything, once companies get rid of those massive office complexes and start downsizing office space, there will be less cost incentive to outsource.
Having said that, if you live in a high cost of living area, you may very well be competing with employees who live in a much cheaper state with much less harsh regulations.
yup, long run euro salaries will go up and us salaries will go down, but short run only at small companies with young agile management, so timeframe should be, rough order of magnitude, a large fraction of a business cycle (to cycle out crufty old dinos); and the true strength of tech monopolies will be tested - how long can the king defend the moat against a technologically superior army?
I find it funny that with the WFH movement people some to have forgotten the lessons learned from the early 2000s outsourcing/offshoring craze.
Many companies tried to move their development offices offshore to India, Vietnam, Bulgaria, Ukraine, anywhere with significantly cheaper labour. And the first lesson these companies learned was the second you've trained a person from that area to the point that you are happy, they will quit, because now they have the skills to get hired by another multinational and leave for a more affluent pastures.
It wasn't until people realized to took more to build offshore workforces. You have to build teams of people, you have to support their families (especially is south east asia), you need to provide benefits and incentives for them to stay in their home town. But most of all you need to become part of the local community. Otherwise you will always be a naive multinational to be taken advantage of as long as it's convenient. And the intelligent and driven people, the exact people you want to hire there, all know this.
I can see the exact same thing playing out in the WFH movement, with managers proclaiming that now that they can hire anywhere they can do away with much of the support and non-financial compensation inherit to office work. But they will run head first into the same problems as offshoring. A job is more than money, especially in an creative/problem solving industry like software development (and if you disagree, you are lying to yourself), your work, your colleagues and your company shape you, (should) support and reflect on you to all future employers. Loyalty has to be earned, and if all you are doing is relying on salary for this, then your loyalty is worth the dollars between you and your competitor.
My view is that we'll settle on a bimodal steady state. With WFH first companies that put in the time, money and effort needed to support a remote workforce. And traditional office work (with maybe a bit more flexibility) going back to full time face to face. I don't think the hybrid model can work.
> the second you've trained a person from that area to the point that you are happy, they will quit
Isn't this a significant problem with developers in the USA also? I keep hearing the advice to change jobs every year or two in order to keep building skills and compensation.
It is. It’s one reason why the job market for experienced developers may be hot while juior developers are unable to find work. A company has little incentive to train someone who will likely quit.
Not exactly, because most of the good growth opportunities are in the US, so you have a reason to stay in the same company if you can see that dangling promotion carrot. If you're an offshore employee (even if you work for the, e.g., Elbonian subsidiary of the US company), you know you don't really have much opportunity to grow and get the cool projects or become part of management. You see your US teammates all growing and up, and you know that by staying outside you won't. So after you get experience, you find a way to either be transferred to the US within the company (which is great since L1 visas are cooler) or show your nice shiny new resume to the other employers who may want to sponsor you, now that you have experience working for Path-E-Tech Corporation.
It depends, a lot of modern companies (perhaps even most) have lost the ability to see workers as people. Turns out when you treat people like objects, they won't like you and will leave the moment someone comes along that treats their "property" better. This is less of an issue for the rare companies that still see you as a person to be investing in.
When the work requires in-person presence, you're essentially competing against the people who can also attend your workplace - locals and those willing to relocate. When the work can be done remotely, the competition is naturally bigger. Obviously, if we're not talking about applying somewhere new, then there are costs of replacing an already onboarded employee which can be quite prohibitive etc, so you have a natural advantage.
However, most importantly, all this applies only if people compete for your position. I believe, still, software engineering is one blessed and super-privileged industry where there is a lot of money and significantly more demand than supply for higher-skilled folks (although I've heard junior-level job market is pretty saturated and situation there is quite dire). So if you are in such conditions, and assuming your performance (and value to the company) does not suffer, getting outbid is not an exactly probable event.
[Added a bit later] Unless your company is not doing well and is looking ways to cut corners. Then - yes - getting replaced with someone cheaper that's not exactly improbable. So, keep an eye and year for company's health - and be aware that some executives could lie straight to your face how everything is amazing while simultaneously thinking of how it's best to abandon this ship in a most profitable manner.
Consultants and contractors have been hired on prem for ages. If employers didn’t clamour for such contractors before, I don’t know why they would now.
In theory, perhaps. But first consider whether the company gains value from workers sharing a time zone, language, cultural context, etc., all of which push against replacing employees with "cheaper" ones from abroad.
In many ways the ideal remote first company manages to address and eliminate these constraints (eg. by adopting async communication channels) to truly enable employees to come from and work from anywhere, but this is definitely not particularly common. For that matter, many of the companies that have embraced remote first principles tend to offer salaries that aren't adjusted to local COL, so an offshore worker isn't necessarily cheaper, unless you're comparing to the very highest COL labor markets.
So, if you're a fully remote SWE employee who lives in Manhattan or the SF Bay Area, working for a company that has embraced Remote First and making it work, and drawing a salary appropriate to those places, then you might be replaced with someone "cheaper" from elsewhere in the US or even globally, but I wouldn't lose sleep over it unless you think you're bad at your job.
Cross time zone asynchronous communication is not better. Things can get delayed by days since you can fall into the trap of only being able to send a single message to them per day.
I have had multiple occasions where our India team was stuck for weeks on something despite sending daily messages back and forth. Then I called them late a night my time and could resolve the issue in a few minutes. It's funny that the same management that thinks collaboration needs everybody to sit in the same open office has no problem having workers in a timezone 12 hours off where you can never talk directly.
I think that example may be more a matter of being separated by a common language (and/or poor written communication skills) than a time zone difference.
It's interesting that you jumped from "communicating well in writing" (and, as I implied, idiomatically, or at least using shared idioms), to "documenting precisely".
When you say "talk to people directly", do you just mean by voice (so you have the extra channels of verbal stress, pauses, and intonation), or do you mean by video or in person (where you get to add gestures too)?
Yeah, "ask a question via email, wait for a response" while using a nominally async channel isn't really adopting async processes (neither is your manager emailing you at 7pm your time and expecting a reply in less than 14h). At the minimum, that email should be going to an internal mailing list where some other knowledgeable employee can answer, and in any situation where that one Q is actually blocking and there is no other work that can be done in the interim, there ought to be a root cause analysis done, at least informally, to prevent that from happening in the future (probably resulting in some docs being updated or expanded).
Other async tools and channels: bug and issue trackers, kanban boards, wikis, forums, pull/merge requests, version control commit messages, annotation/commenting systems like hypothes.is, even NNTP.
I work for people from Canada. Basically ignore Argentina's holidays and follow Canada's. Working remote means we can do whatever we want, no need to take a holiday here if we don't want to (paid, of course)
Just went through the interview gauntlet and timezone was a common topic. As software delivery pace is communication driven being within a couple time zones was explicitly called out by most recruiters and mentioned by the rest as being preferred most of the time. There was exception for working on the road even if it took you out of their preferred TZ band for a few weeks. Going too far away or for too long? Call it vacation instead. Just get shit done, was the sentiment.
So it’s in employers minds too. They’re still hiring local it’s just local is defined as a TZ now not an area code.
It's really not propaganda though. WFH's job pool is at least your entire state, if not your entire time zone, if not your entire country.
When it's in person, it's people within commuting distance. Simple as that.
That being said, people overestimate the will of management to replace current employees. WFH is really more of a problem in the hiring process, not the firing process.
For larger companies the pool is already the whole state anyway. People move within the state for a good job - there's likely only 1-2 tech hubs per state anyway.
No better or worse than before, IMO. It's a pendulum that keeps swinging back and forth. Cost cutting leads to outsourcing, which leads to reduced quality and or output, which leads to people coming in to grow and revamp, which comes back to hiring local, rinse and repeat.
I'm mostly convinced great and established software engineers around the world already do well for themselves. If you're cheaping out on salaries, here or abroad, you're likely not getting anything good.
I'd much, much, much rather have one proficient, in my timezone developer at 200k than 4 offshored developers at 50k.
> I'd much, much, much rather have one proficient, in my timezone developer at 200k.
Yes, but do you think you'll get proficient developers on the west coast for just 200k, when unicorn startups and FAANGs pay at least twice that for great people?
For the fully loaded cost of one really good developer in the Bay Area (400k) you can get four equally good developers anywhere in Europe (I'm not even talking Eastern Europe here), who will happily shuffle their schedule to accomodate a few evening zoom calls or reply to a few mails.
The talent pool in this industry is global, and it's extremely hot everywhere, but ignoring purchasing power parity is just self-deception.
> For the fully loaded cost of one really good developer in the Bay Area (400k) you can get four equally good developers anywhere in Europe
I think the 'equally good' is the part that I am really unsure of. From personal experience, the difference in competence of my coworkers when I moved from a medium-sized US city to the Bay Area was massive, and I had been working at one of the better/well-respected employers in my old geography.
We from croit.io hire worldwide with work from everywhere. Since COVID-19 we see a huge increase in salaries of usually low labor cost countries. It's still cheaper, but there are reasons to get more expensive employees as well.
For example we have a hard time to find Linux System Administrators / DevOps that want to support our global customer base. We even need to get more US engineers onboard to fulfil requirements of large companies or governmental customers.
What you can expect, is a way more competitive environment in the future. We made quite good experience with our stuff and it brings a lot of value into a company to have a team with total different ways of thinking and viewing things. Just don't worry, be flexible, learn everyday, keep yourself ahead of others and you wont have to fear to be jobless. But if you are lazy, under average skilled and unflexible, prepare your self to get in trouble some day in the future.
On another point, the standards of quality in developing countries where wages are lower are not that great.
For a person in one of these countries, its normal for things to not work. The electricity goes down, the internet goes down. Maybe a government website goes down for an hour each night under heavy load.
We actually have it quite good in the developed world in that we expect most things we rely on to work. An important government website going down for an hour is unacceptable.
Because these things are considered more expected and normal and this type of mindset can creep into the mind of an engineer. If their code breaks or has a lot of bugs, its not much different to what they are used to with the services they rely on every day.
Lets say your orders stop processing for an hour because the engineer didn't follow standards and write tests? You might loose more than you gained in wage savings
Cheaper labor is cheaper for a reason. The economy is globalized enough that if you have an actually equivalent skillset, you're very likely able to pull an equivalent salary, no matter where you live.
You'll get outsourced regardless of where you work once a company is willing to take the tradeoffs that come with cheaper labor - a "worse" skillset.
There's certainly a little salary arbitrage to be had for actually equivalent skillsets, but not enough such that its worth firing someone with institutional knowledge. Usually companies will augment hiring via outsourcing or near/off-shoring, not replace people.
If a company is willing to fire you for that little amount, then (1) you were already essentially replaceable anyway in some form or another (sorry); or (2) they're making a huge blunder and perhaps their future is not so bright, so maybe its actually a blessing you have to leave?
If there was easy cheap labor standing by to replace you, it would have happened already regardless of WFH. In reality what a company gains by way of salary savings it has to spend several times over in inefficiency, communication issues, difficulties in management, loss of quality and lots more. This is exactly why the outsourcing boogieman hasn't caught up to the industry despite being talked about nonstop for literally decades now.
COVID was a massive pre/post test that proved that tech didn’t have to be done via periodic visits to the company’s spreadsheet mine.
I’m not worried that highly talented US devs will be harmed by the ripples from that test, but there are a lot of developers in the middle of the bell curve of value delivery who will feel increased competition from a broader pool of devs also perfectly capable to hit that broad middle of the curve at a higher RoI, once the (perceived) constraint of living in commuting distance of the office is removed.
I will never fire a productive developer and try to hire a cheaper replacement somewhere else. That’s a fool’s errand. But when I’m seeking to hire, I’m absolutely looking at the RoI with as many factors as I can manage to take into account. I doubt I’m alone in the market in thinking this way.
It depends. If you can be replaced at a cheaper cost, why wouldn't a company do it considering they can. The question is: What does it cost to replace someone and is it worth it ? Here is how I look at it:
There are 4 types of employees in a company.
1. "Should be partner" Players: You not only do a great job, add tremendous value but you think about the business and team and go out of your way to help improve things. You genuinely care not just about getting things done but long term success of the team/company etc. You live and breathe this thing. You wake up on a weekend thinking about work and how you can improve things. You should be like a partner ideally. Most large companies do not value you enough. If you ever slip, you hate yourself for that and want to frikin punish yourself for making that mistake. Your team not only loves to rely on you but they NEED you so bad.
If I have anyone in my company who is "Should be partner" player, you bet I will fight hard to give them whatever they want. I would keep them happy even before they want to be happy.
2. A Players: You are very good at your job, take things seriously, get shit done, genuinely participate BUT you have limits and cannot go beyond a certain level. You won't wake up on Saturday thinking about that enhancement you want to make. You are ok to wait till Monday. You hardly slip but if you do, you recognize it immediately and work on it. Your team loves to rely on you. You hardly need a reminder to do better.
If I have A Players in my company, I would do my best not to lose them.
3. B Players: You do the bare minimum to get by. You may sometimes need a kick up your butt to do a bit more but usually you do enough to not get noticed. People don't prefer to rely on you and if they have to, they are usually cautious. You need a bit more management and ensuring things are happening on your end and your team/manager needs to check on you on a regular basis.
4. C Players: You don't really do anything useful and either will get fired at some point or you are smart enough to hide yourself usually in a large organization. You couldn't care less about anything except a paycheck. No one can ever rely on you. Your team doesn't care about you. They wouldn't notice if you were gone.
So ask yourself: which player are you ? Sure, sometimes an A player could become a B Player etc but if you are wondering today, where do you stand ? If you are B or C, you can certainly be replaced with a cheaper option considering all else is same.
Your analysis is idealistic and based on the false premise that your value is properly recognised.
Your manager (or a company) will often mismeasure your value. And I can think of plenty of valid reasons you might need to sack even good “partner level” employees. Anecdotally I have seen lots of companies misvalue key profitability employees, and losing them. Or companies sacking valuable key employees.
There are also “D-player” in your scheme: low level negative productivity employees. Often well meaning but overall they will cause costs (even beyond their overhead) and never learn or improve.
And then there are the “player player”s: employees that cost the company large amounts, usually at the higher levels of the company. Often camouflaged as a partner, or A player. Sometimes very productive in one area, with the costs born in another e.g. risks.
Edit: The other problem with your taxonomy, is that it implicitly presumes that people know their value. Too many people undervalue themselves: they are deeply profitable for a business but they are unaware of it. The worse case is when you think you a playing at partner/A level, but actually you are deluding yourself or ignorant of your other costs or ignorant of other company issues, and then you are perplexed when a company values you correctly and lets you go.
I am not suggesting that value is always recognized. Plenty of people start as A player and become B player etc. It is possible if you don't get taken care of by the team/company. However, regardless of whether you are recognized or not, you CAN be replaced once your cost doesn't justify your output and that is a fact. Nothing idealistic about it. Whether that analysis by the company is correct or not, doesn't matter for the purpose of this discussion.
I'm not sure about your categorization. To some people I might be an A but to other people I might be a B or C and I frequently try to do things that are in your Partner category where it's something I'm interested in.
Hmmm. I'm sure there will be an impact, but don't think it would be that significiant. A global talent pool of top engineers who can join the competition is already quite limited, and a fair share of them is already in the US, whether born there, on visa, or have immigrated. It shouldn't be ignored that major companies like Google, Microsoft, Airbnb, or even Duolingo has already been operating in multiple global offices for years, that includes all those consulting agencies who's done that for god knows how long.
Some founders, and engineers, have those sort of fantasy that they can hire with way lower wages or something like 1/3 of the cost for equally qualified engineers. Wrong, immigration isn't that hard, even easier for Canada, it will take time, but people might be willing to gave up 25% or even 30% of their salary to live in a place that's of lower cost, where their family reside, but they are not going to gave up 2/3 of their salary, when they could have immigrated fairly easily. The cheapest and easiest way is probably to attend a shitty school and graduate, the only cost is time.
The only impact I see is it's now way easier for smaller companies to hire and operate a team globally, even for 3-5 people, previously it was reserved for major corps and giant consultancies.
People sometimes tend to ignore that people create value for the company, not the other way around.
Also just as a side note, many countries in this world have company-paid salary tax (somewhat similar to FICA, but are paid at a much higher percentage in some places). This often gets ignored in salary comparison.
Remember that companies have been trying to outsource software stuff for 40 to 50 years. If they haven't managed it yet, I'm not going to give them great odds of suddenly succeeding in the next year or two.
Also worth noting that wages have had a long time to stabilize. If some county is vastly cheaper than US/EU, they are either far less productive, or there is some other major issue causing serious problems.
I come from a South American country and I could see this process unfolding during COVID. Before that, I didn't have any friend working for an American software company. Now, my friends are either employed by foreign companies or they are building experience in order to do so in the future. It's been a pretty remarkable change, actually. The salaries are beyond what we imagine it would be possible to make in 20 years of career. Things are being great for us, although I doubt that doesn't have a depressive effect over American wages.
I mean all of this with kindness and helpful intent: I think you’re asking the wrong question, and probably from a place of undeserved insecurity. Let me try to reframe it:
- Are you relatively confident that you’re talented, or delivering meaningful value, or motivated and capable of learning to do so in your role?
- If previous answer is no, do you feel comparatively competent to your peers?
- If previous answer is no, do your peers generally treat/regard you as such?
- If previous answer is yes, is it possible you’re feeling the impostor syndrome most of us do?
- Regardless of the previous answer, if you’ve come this far… is it possible you might be a better fit elsewhere?
I could start and end with that last question, but there’s value in assessing the others.
Ultimately, even if you might be replaceable by lower cost labor and even if there might be some desire to replace you… you’ll still be competing in a market where lots of people are WFH, and where employers will be competing for you even more.
But if any of the above applies, it may be an opportunity to feel more secure in your current position, or to seek a role where you do.
I’m saying this as someone who’s WFH almost all of my 20ish year career (gawd I’ve lost count I’m that old, and that’s definitely a career future concern), and even through many versions of feeling insecure about my career future I continuously come back to “yeah I might eventually not be valued or have a future here, but I’m more skilled and in demand than ever.”
100% yes. WFH is meaningfully “flattening the world”.
US labor market preferences have forced employers to offer WFH options. There is only upside to an employer expanding their candidate pool internationally.
Most folks I know are starting with LatAm as there is no meaningful timezone difference to contend with.
This won’t be issue while the global demand for software engineers stays high, bolstered by monopoly businesses paying “whatever it takes”.
But when demand softens: get ready to compete on a level playing field with the best of the best from around the world.
I say that because I think this round of outsourcing is driven by a flight to quality - not cost cutting. Imagine what happens when companies offer US wages to someone in a less wealthy country. They’ll get the top 0.1% of the labor market.
Many companies were dragged kicking & screaming into WFH. But now even the laggards in remote work have developed a culture and processes to make it possible to begin offshoring their operations.
> Imagine what happens when companies offer US wages to someone in a less wealthy country.
There can be a wide disparity in wages inside the US, cost of living being a key differentiating factor. I imagine the 0.1% of workers of any lower-wage country would already have the skills to migrate to a higher-wage country. So what you'd be paying for is the "best of the rest", which might not be that great.
I spent just about 2 years WFH at my job with FedEx, shortly after I left to join TrueNorth they went permanent WFH for my former office, I highly doubt they outsource that.
I'm also WFH with TrueNorth, again I see zero reason why they would replace me. I'm already arguably quite cheaper than people in HCOL cities, I'm competent, I'm proving I can work largely autonomously and deliver quality work and I don't have a job role that simply doesn't require me to be in person for anything, what meetings I do have work fine with Zoom as they often involve screen sharing and might use all of the allotted time or a fraction of the allotted time.
WFH is going to be the new norm going forward for a lot of roles, roles like mine that don't involve a lot of heavy in-person discussion.
Will you get replaced by someone better qualified in another geographic area that may or may not be cheaper? Maybe, but the same can be said for in-person roles you're just competing against a much smaller pool of people for a given role.
Will you get replaced by someone in another country, that can work for a fractional amount of what you can? Probably not, there's a myriad of tax implications as well as time zones and general reliability to deal with. It's much harder to vet people in a country that's going to make economic sense to outsource to, there's usually a language (or at least considerable accent) barrier, cultural differences (Based on Reddit and HN, Europe for example generally finds the bulk of what Americans experience at work to be absolutely unacceptable, things like a 40+ hour work week with a half hour unpaid lunch, being expected to be actively working all 40+ hours) the tax implications in both countries, data laws might be different in the second country which could become a royal pain, etc.
And if you do lose your job to outsourcing to increase company profits, did you really want to be working there anyway?
Outsourcing the workforce is very different from hiring from the global market. Many comments here focus on outsourcing because you asked about it. Outsourcing has been around for a long time. Tradeoffs are well known and some companies still choose it. WFH has little effect on it.
What WFH can change is expanding the job market across borders to the extent that time zone differences allow companies to do so.
Is this a bad thing for employees? Hard to know! All I know is that demand is now much higher than supply in a single market. So companies with a WFH culture can benefit.
I think the smartest thing to do is to use this trend as an opportunity. Work for companies that pay better and live where the cost of living is lower and the quality of life is better.
Remote work means potentially a global work market, beyond borders, instead of a local one. So for certain jobs surely the risk is very real: if you are a call center operator and you live in the west you are surely far more expensive than an equally skilled call center operator who happen to be fluent enough in your language from for instance Tajikistan, so IF cross-borders hiring have no carefully written norms for many jobs they will result in a nightmare competition, at least for those who come from/happen to be in the richest part of the world where cost of living and so relevant wages are far higher than elsewhere.
That's however a complex passage we need and we need to handle at a Democratic social level because on one side we can't have some parts of the world hyper developed respect of some others, every time there is a big wide gap between rich and poor, at any level, there are social issues. So the trick is piloting the new globalized society in a slow and controlled transition instead of a sudden "great reset". The former help anybody, the latter just very few against anybody.
Seeing actual populations I think we will get the latter though, having demolished the little culture we have accumulated and spread after French Revolution, with two+ centuries of social movements most of the people act as Lebonian's flocks not as intelligent persons. In that case for those who can't be in the little rich élite or needed by them because of rare high skills the sole hope is remain as aside as possible to try circumnavigating the storm with the little damage possible. Igniting a new Revolution is not for now, time will probably be ready in a relatively near (5-8 years perhaps 10) future but certainly not now.
On contrary this is a time where we can really discuss about a new society where eligible job for WFH will be done from home to ensure better living to many people and similarly better services to everybody and that part seems to be completely ignored by most, preferring talking about disasters or opportunities like "the decision is not from us, it's pointless discussing what can or can't be done"...
It seems the supply of tech talent is constrained globally. So if a sufficient number of companies try to outsource, they could drive up prices and be no better off. Legal issues can come into play too. Some information must be kept domestically and not be distributed off-shore. On top of all this, my company already does some outsourcing. The quality of the work is usually subpar. They tend to be ok at supporting well documented systems, but not great at building systems. The turnover can lead to potential problems in even supporting systems since it's a revolving at those agencies - as soon as someone good finds a better job (fairly common) they'll leave.
A cheaper country? It makes it easier emotionally for managers to take that step, but there are still time zone, cultural distance and language issues arguing against it. They may even deem the extra paperwork to be too much hassle for them.
I work for a very large company and it seems like... 'eventually', not particularly soon.
It seems to come down to money math. This much '$local_currency' gets X heads here or Y there.
There's additional benefit/incentive for teams that need around-the-clock coverage. eg: incident response
I think WFH being more accepted/commonplace will make the distance easier to account for - making it more favorable.
I don't think this necessarily means they'll be hurried to replace you, me, or anyone with outsourced help. Mainly back-filling when we eventually move on.
Complete outsourcing seems unlikely, I would expect positions remain available if for nothing else, coverage. Availability but also compliance.
If you've worked with any outsourced teams you will quickly learn that while of course your employer can and might outsource you, it is a terrible idea. Such a company inevitably turns into a digital shithole with many barely working components interacting in the most destructive manner possible.
Ask yourself if you work in a short-sighted company that exists only to enrich the next shark in the tank, or a company that is adding anything to the world. If it's the former, don't worry about being outsourced, worry about finding a job that adds something to the world. If it's the latter, you have nothing to worry about.
Everything (and more) that's possible to outsource or offshore has been outsourced or offshored in the last 20 years. C'suite folks and finance have been utterly unrestrained by anything apart from impossibility.
I mean, it's possible, but I think there's room to start holding companies that do that kind of stuff accountable. For instance, my company made a big deal about remote hiring during the pandemic and has now completely reversed course. I think they'll pay for that in the long run, not only in terms of turnover, but now every time I tell the tale of working there it ends with, "They eventually squeezed anyone who wanted or needed to go remote so hard they left."
As a remote team, once we have someone, we don't want to lose them: we are mutually invested. Likewise, overlapping timezones help, esp for our more R&D areas. So if you are good, you are good. At the same time, we are trying to grow our team in ways that that reflect our customers: over half North America (gov, finance, enterprise, tech) but now growing intl too.
And... #hiring #visual #graph #ai: js, webgl, sales/solutions engineers esp for graph neural nets / pydata / BI :)
I don’t see how is the current wfh situation any different from before.
Before: work at the office. You were competing with people who lived in your city. You were limited to work at companies in your city.
Now: wfh. You compete with people who live in your country. Depending on the company, you may compete with people who live in countries +- N hours of difference. But you are not limited to work for companies in your city anymore.
So, sure you get to compete with more people… but you also got more options.
If you are "below the API" - a cog in a machine punching through well-defined units of work - you are at risk for outsourcing or automation regardless of where you sit. As a software engineer though, you have the opportunity to position yourself as something other than that. As a designer and troubleshooter and facilitator of the machine, which includes human and machine and HQ and distributed sites components.
Outsourcing is a gamble - the effects of cultural and language differences have often been underestimated. For every company that wants to try it, there will be some some that have tried it and been stung, and want to hire local again. Think of it like any other business risk e.g. company being acquired, financial issues etc. - try and make sure your skillset is applicable to other potential future orgs
I'm already seeing that it leads to outsourcing to western European countries. I know basically two marketable tech stacks and for one of them that's primarily popular in Europe, I can't get more than 70k gbp (without us benefits), which is apparently a decent wage in London but definitely not in California cities. And for the other tech stacks I've seen ~20% drop in rates.
I don't see why not. I worked from Latin America for a couple months and met a lot of fellow tech employees there (Google, FB, etc). I also met a lot of local English-speaking SWEs who could have done our jobs with no issue. The timezone difference is miniscule or nil (esp for East Coast based companies), and they would be estatic to make $60k as opposed to our 250k+.
If it's a self-driven tech company... yes. If it's a tech cohort that supports some other business function that has stakeholders, I would say no. Simply because the stakeholder can't physically shout at somebody when something goes wrong. They will pay for that.
Is it, though? I guess we must clarify an industry, of course. But if we're talking about software engineering - the balance had surely changed, but I don't think it had tipped over, and especially for a "much greater than" (">>") sign.
If supply would start to outweigh demand, salaries would naturally plummet down. As far as I've heard talking to friends (for personal reasons, I've been not exploring any opportunities, being busy with some other matters, so I haven't really kept an eye on this), last year they rose up.
I don't think so, because allowing you to work from home doesn't immediately make the cheaper labor cheaper or more available. That is, "they" can already outsource you, WFH or not.
The question is not what you, as an individual contributor or even front-line manager would want, it is what the people in the executive suite would want
WFH doesn’t automatically lead to outsourcing, but it does move it a lot closer. Once the company dynamic has shifted to all communications and interactions being online, it’s very easy to add someone from a different country as long as the time zones aren’t too far apart and the logistics of employing and paying them aren’t too onerous for HR.
The company I worked for eventually did ramp up foreign hiring and perform layoffs in the US. It was just too to hard to ignore the fact that they could hire 2-3 engineers in foreign countries for the same price as a single engineer in the US in many cases. Or, as they discovered, they could pay 75% of US engineer wages and still be giving someone in a foreign country top-1% compensation for their country. This made for ecstatic, hardworking, loyal foreign employees. It’s hard to ignore situations where you’re paying less and getting more.
It didn’t mean that everyone in the US was laid off, though. Certain talents and specialties were still easier to find here than in foreign countries.
However, I think a lot of people are in denial about how much remote work is setting the stage for a flattening of global engineering compensation. Engineers in lower comp areas will see their salaries rise as they get access to more opportunities. Engineers in higher compensation areas are going to see downward pressure on salaries as they compete on a global stage. The exception will continue to be engineers with the most in-demand skills, who were likely already competing on a global stage.