I can't say much about the subject since I never used outsourcing, however 4000$ a month for a Ukrainian dev looks really over evaluated, it's much more than most positions in France.
First of all $4k is not much - less than $20/h
The salaries here are very diverse.
Outsourcing companies tend to exaggerate skill level of their employees and one could be called a "senior developer" only after 3-4 years of experience. These "seniors" can be paid much lower salaries (say, $1500-2500 monthly) while the company can charge its client $50-100 an hour. That's where their margins are.
Your first job might led you about only $500, though, and on the opposite side of the spectrum there are people of exceptional skill that bring home $5000-7000 per month.
These sums seems higher than in Europe simply because of different tax structure. If you bring home in, say, Berlin, $3000 after tax, your employer and you still have to spend another 3-4k on pensions, insurance and taxes - about 100% premium vs 5% in Ukraine. Here we don't have any of that. Our pension will be about $200-300 and we don't have a decent quality health care or education for our families provided by the state.
Also, mortgage rates here are insane - 20%/y with 25% down payment! So most developers end up saving big parts of their salaries to afford buying property without taking loans.
Many developers here would prefer $3000 in Berlin over $5000 in Kiev because of all the value that you get from the state and the economy.
*My numbers around taxation may be off to some extend but you get the idea.
is that interest?!
One thing that always struck me about some countries that seem to have a really low housing (rent) costs: the home prices seem to be equal that in the US!
It doesn't make any sense. I'll see homes for 100K USD, but rent only $200-300/mo? How does that work?
Rent is cheap - I pay about $500/mo for a 1 bedroom apt in the city center. 10 minutes of walk to the office. The price of that place? - about $200k. That's one of the reasons we don't have a proper rental business: it just doesn't make sense.
But here is the catch, they only pay $200-$300 in municipal taxes. I guess in the U.S it'll be a few thousands dollars. This cost will eventually drill down to the person renting the property.
Also that's the price tax-free because nobody is paying taxes on rental (which is 30%).
So if you add these two up, you get your price!
Schools are funded primarily through this mechanism.
It's +- how it works in Poland in dozen or so biggest cities. There's no ad valorem tax on buildings, just a very small muncipial tax basing on land area and some multipliers depending on category. Also there's still shortage of buildings in these cities.
50m^2 flat in Lublin is worth around $80 000, I could rent it at $250/month maybe. The price of renting is on the high side for the city size, it helps that that particular city has 5 universities and 100 000 students with 350 000 regular population.
Interest rates are at around 2-5% mostly.
Not long ago I read that since the war, the Ukrainian average pension was about 70$ a month (this is why I was surprised by the 4k salary).
Devs must be kings there.
Point in case: I make 2.5x my parents' wages (combined) as a student working part time.
I really don't get why the place I'm working from determines how much do I earn.
Am I bringing less value working from Malaysia than from London? I think the value you bring in should be the only factor what your salary depends on.
Can somebody shed some light on it? I know there are some arguments like costs of living, but why it should be even considered? It's totally up to you where do you live.
So if you're a unique, highly sought-after expert, the country doesn't make much of a difference directly, because people like you a generally hard to find.
But for a pre-senior level, there's a lot of people available, so the amount the client is willing to pay is determined by how much other people like you (from a place like yours) are willing to work for, which obviously depends on the country.
And then there's the selection bias. If the reason you got found is because the client has been looking for developers in your country, chances are that the client is looking to save money and isn't willing to pay much. Those clients who are willing to pay more generally look in different places.
And finally, a US-based client working with a US-based contractor is protected by US laws, unlike when working with a contractor from a developing country with a less reliable judicial system.
I heard a lot of stories about companies paying different just basing on where the programmer lives. Eg. if he switches location, he automatically gets less/more money. This is a biggest nonsense for me I want to clarify.
I think that matters because it lowers the wage you can put up with. Thinking from an employer perspective, assuming non-specialist skills, it's more costly to work with someone remote in a different timezone (b/c communication difficulties, etc), so they'd only do that if they can push your wage low enough so they come out ahead with the extra costs vs. a local developer. They also like money, so if they can push your wage down further than that, they'll try.
My other problem with this line of thinking is this idea that you are getting less for that 4k than if you were to hire someone from the US. There are extremely capable people around the world with excellent communication skills and if you're looking at it with this attitude you will just miss out on this talent.
As I understand it, it's not what the dev costs to its employer but what he takes home.
And where did you read that I had the idea that they were not good enough to justify this kind of money. My surprise at the 4k number comes from 2 thoughts :
- how come a dev from a poor country earns more than one in a rich country ? (I don't say they shouldn't, just that it's surprising)
- and as I wrote in another comment, I read since the war the average Ukrainian pension is 70$ a month. I would have thought devs salaries would be more in line. 4k a month must be "stratospherically" rich there.
http://www.payscale.com/research/NL/Job=Senior_Java_Develope...
Doing some comparisons between various European countries it looks like the wages for junior and middle experienced devs are wildly different, matching what you might expect. But the wages for senior devs start to converge.
http://www.payscale.com/research/UA/Job=Senior_Java_Develope...
You're not going to make that kind of money by working projects for a consultancy firm though, the margins they are making on your skills are ridiculous.
I don't think the wages are all that bad considering the generous benefits. What's really killing is the cost of living here.
Employees are insured for unemployment, disability etc. Your employer is insured to cover your wages if you're sick. If you're self employed, you either don't get paid for hours not spent working, or you have to buy similar insurances commercially. You will also need insurance for liability and probably for legal costs. If you're good at your job and good at selling yourself, you probably make more than an employee would, but the 60 an hour are not pure profit.
So a self-employed dev making 100k would be comparable to an employee making 30-40k. It's a very rough estimate; it's probably a bit better than that.
I'm self-employed and have about €120k revenue per year (working 4 days a week), and I think my taxable income ended up below €60k last year.
AFAIK the number is correct.
Seriously though, good to know.
Everywhere I've worked and lived companies doing anything remotely complicated need to hire devs that are significantly better than average or it's just a waste of money. Sometimes they just aren't around at any reasonable cost for whatever reason.
BusinessObjects, Mandriva, Dailymotion, Archos,
Ubisoft is French, so Assassain's Creed, Drive, Far Cry, Tom Clancy series
Alcatel and Orange are French telecommunications companies that are pretty famous
So it's fair to say Ubisoft's products are French (from France, not the language) products.
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you can add CATIA CAD, that owns 70% of the airplane design market.
Taking your methodology at face value, the guy employing a level 8 programmer for less than $10 million / year is by definition a level 8 programmer himself, even if he can't program at all.