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Comment by mgh2 | Hacker News Reader

Scarcity of workforce is artificially created by rich countries, where talent can be discriminated due to location and citizenship. Now that you can hire internationally and remotely, talent is no longer confined to rich locations, thus democratizing opportunities for workers from poorer countries. A lose from the rich is a gain for the poor.

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Hmm..I think outsourcing to poorer countries is happening for many decades now so nothing new here. Also "democratizing opportunities" sounds like corporate speak for cost arbitrage.

This is not quite what is going on. The "rich" that lose are the workers from rich countries. Their employers lose nothing. They can cut costs because they can employ people with a way lower salary. It might still be at the upper level of the poorer country's market rate, but foreign employers won't pay much more than they strictly have to.

employers have to adapt as well. Remember the employer’s employer is the customer. employers have to compete with other would be employers who have a lower barrier to entry now.

There is a lot of complexity for a US-based company around hiring people internationally: 1. Security. How would you prevent your monorepo being copied out to competitive companies in a foreign region or get snooped by some local government officials? 2. HR/Payroll. If you want to be compliant with local laws you will need to create local business entity. Would that make sense to do if you only have one employee in the country? How expensive that setup is going to be? 3. Somewhat obvious cultural/language/timezone difference.

There were a lot of conversations about moving jobs to India in early 2000. It didn't happen - I think primarily for reasons that I just outlined. I don't see what's different this time.

To add more color about the VMWare decision:

- the compensation strategy seems in line with what other companies were doing. Compensation adjustments based on local markets are fairly standard for the large tech companies. They seem to be fairly limited though (< 20% of TC) inside the US - Lots of tech companies allow their employees to work remotely until the end of 2021 keeping their current comp. I'm not surprised to see that changing and VMWare may be the first canary (or I'm just not aware about other companies already doing that)

For number 2 - I worked for many companies outside my current residence and none of them needed to create a German business entity to hire me, I was simply hired on a freelance basis & given a higher wage to compensate having to pay my own insurance & taxes.

(Edited for clarity)

Sure, and it's a good point that I think companies should consider instead of downright rejecting this option.

There are implications though: - What about equity grants? A lot of comp in SV based companies is based on equity (both liquid/illiquid). If you are hiring someone on a pure cash basis vs other people who are not - what kind of dynamic / incentives that will create?

I'm very curios about hearing your experiences working in freelance capacity for a US based company though, it sounds like something I would like to do at some point (as of hiring someone), and would really appreciate the ideas

That was basically my experience, I wasn't given options only paid a normal salary ~25-30% higher to compensate me paying for my own health insurance, unemployment insurance, misc taxes etc.

If you were working for them like a regular employee, that has quite a few pitfalls - you'd need to perform the duties that an employer has then (get a "Betriebsnummer" (employer registration number), register your contract etc) - working "on a freelance basis" where you actually act as an employee isn't legal (https://www.existenzgruender.de/SharedDocs/BMWi-Expertenforu...). And if compliance is important for a company, they'd need at least someone that is familiar with labor law in a country before they start employing people there, even if they don't explicitly need a business entity.

This time it is forced by a pandemic... the economic incentives for companies using this strategy are no longer defined by management's choice

Sorry, I don't think I understand what you said.

What about pandemic makes a difference in the way that security, laws, or timezones work?

Not sure, still unfolding for a lot of companies, but as remote become the norm, these issues may have higher chances of being circumvented

First - "artificially" - citizenship is not 'artificial' goes far beyond some academic credentials.

Second - far from being 'loss for rich gain to poor' - it's a 'gain' for the educated class of a poor nation, a 'loss' for the upper middle class of a rich nation, and a 'bigger gain' for the rich/capital class of the rich nations.

This is not true for complex software. The complexity of modern infra systems (like vmware vm) is so high, that there are very few people (regarding of the location) capable of understanding and creating such software on time and in budget.

I will be surprised if the salary cut includes good engineers.

There are 7 billion people on the planet. Even if only 0.001% are capable of working on VMWare, that's still nearly 100,000 people.

High salary Silicon Valley engineers are not nearly as special or unique as some think they are.

I worked for VMware from 2007-2014 on things other than the core virtualization products.

I think you’re overestimating the situation. There is a group that did have a fair number of CS PhDs to develop and maintain the core piece — the virtual machine monitor (VMM) but then there’s a large number of plain old everyday SWEs developing the bulk of vSphere and the desktop virtualization products.

I would expect VMW’s policy to apply to just about everyone. A few old timers that have reached the principal engineer or fellow levels might be able to avoid it but that’s a few dozen out of 20,000+

If you were actually "democratizing" the workplace, people would get a vote on whether or not to outsource their own jobs.

If you think about it, the net result will be a transfer from workers to executives and shareholders.

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