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Comment by jakark | Hacker News Reader

It could be outsourcing, but also could be consulting. I have an impression (and no way backed by data), that half jobs around here are not direct employee but people working for a consulting company, even tho they're 100% daily working for a client.

But even those consulting companies are having issues getting new developers but don't seem to be getting their salaries much higher.

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^ I have seen much of this in the Netherlands. A lot of "Full Time" Consultants.

I have always wondered about the reason for this. But I guess its mostly because letting go a consultant is less expensive than firing an employee.

Consultants might pay less, but typically charge more! So perhaps a Dev costs $40k, consulting company might pay the dev $30k but charge the company $60k

That's true for large companies like Accenture, but there's plenty of setups where the consulting company is essentially doing nothing (only providing a legal intermediary between the consultant and the client) and its cut is below 20%. The net effect is that the consultant is making a multiple of his team mates salaries.

I think this is a deliberate play on the company's part, as it's a way to compartmentalize candidates according to their negotiation skills. Full time jobs are essentially for people who are poor at negotiation and at figuring out what options are available, and the company gets to have them at the fraction of their value. For smarter people, the company bites the bullet and takes them in as consultants, with much higher pay. This way, the official wages for full-time employees get to stay low and you can always say to a gullible candidate that the maximum salary for the position is so and so.

This is all about Western Europe and about huge, bureucratic and successful corporations that have more money that sense (banks etc.). I don't think it applies to smaller companies which are not swimming in money.

Not just for big companies like Accenture.

The Spanish market is full of small consultancies and they still charge a 2.5-3 times the worker salary to their clients.

This makes very hard for anyone to get a salary above 45k euros because paying above 150k (21% VAT included) is hard to justify just for one person.

In Poland it's similar. However, in UK, Germany, Switzerland, Netherlands, Belgium, Sweden, Denmark, Finland (just examples of countries where I or my colleagues have contracted in the past) companies are open to paying 100k-200k EUR directly to the contractor, provided he has the skills they're after.

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