It’s not like companies can or will actually hire globally. There are huge timezone, language, cultural, trust, connections, and other barriers.
Software wages in the US are high, because it's very hard to replicate the quality of an American workforce. By and large global differences in wages reflect global differences in workforce quality. It's not like this is the first time companies have realized that global labor is cheaper. They've been trying to capitalize on cheap engineers in developing countries since the 1980s. It's always the same issue. Lower price on paper, but delivery and quality issues that scale far beyond the up front cost savings.
Don't get me wrong, there are smart people in India. But if you're outsourcing for cheaper labor, you're not getting these smart people.
The gravity of magnitudes better compensation insures that the very best will migrate.
FAANG level engineers are completely insulated from overseas competition due to this, but of course the lower echelons will have to worry about this if the current demand spike falls off.
The support contract for a huge multinational I was a small part of a while back, was bought out by an Indian-based company, who wanted the prestige and new line of business, but bit off WAY more than they could chew, and threw the entire tier 1/2/3 process into near chaos.
Had they looked even a little deeper, they might have realized that they had no pratical experience in customer facing sw/hw support, and saved everyone two years of flailing, panic-driven, blame-everyone-you-can-point-a-finger-at, the-technicians-are-wrong-since-our-process-says-otherwise-oh-wait-our-process-is-shit-what-now-MORE-METRICS unbelieveable bullshit.
All because somebody in high level management managed to bend somebodys ear, and the parent company got swindled into it.
So glad to be gone.
Outsourcing for talent is fine, but there is plenty of competition to make India rare, at least around here. So when I hear India, it's unfortunately a pretty safe assumption that someone went for bottom of the barrel cheap.
I'm not saying this is right or fair.
I think the best programmers in the world get sucked into US companies so while there are decent programmers around the world, the quality isn’t the same. Whether it’s 5 or 25%, I don’t think there’s quality parity.
As anyone who's done serious hiring can tell you, judging candidates is damn tough. There's only a loose correlation between how a candidate looks on paper and how he performs. Now imagine translating this process to a completely foreign culture halfway across the world. Do you know which universities in Romania are good? Do you know who the most prestigious employers and positions in Romania are? Do you have a network of Romanians to recommend new hires?
In fact, even if you try, most likely you'll be stuck with below average engineers. Not only will the top ones get scooped up by those with better local knowledge, but the lack of knowledge goes both ways. Top engineers aren't going to join some fly-by-night employer with no local brand, track record in that country, and no career track to senior positions.
The only way I've seen a company actually succeed at this is by being willing to fully embrace the country. It's not just enough to hire off-the-shelf Romanian engineers, the company has to actually become "Romanian". Are companies willing to hire senior management from Romania? Are Romanian employees "first class citizens" with equivalent work to their American counterparts? Is the company raising money from Romanian VCs? Are they pushing Romania as a primary markets for their product? If the answer to any of those questions is no, then it's highly unlikely that you'll succeed in recruiting, interviewing, hiring and retaining top talent in that local market.
There is quite a lot of red-tape involved with hiring foreign workers though.
"Combining pan-European firm-level IT data with our management practices survey, we find that the US IT related productivity advantage is primarily due to its tougher "people management" practices."
So it's not related to IT engineering skills but rather how the company handles those engineers. An US based company will handle EU based engineers like their own, thus nullifying your argument.
I've worked with many people from abroad (even some from the US) and truth is : there were people better than others, there were people who worked more than the others. But this is never tied to nationality. It is much more tied to : does the guy want to be top notch ? If he asks the question then he probably has the ability and willing to make the sacrifices.
That could very well be due to differences in management and in fact that seems to be the conclusion drawn by your link, which states that productivity among European companies increases when those companies are taken over by American firms.
Right from the abstract:
>US IT related productivity advantage is primarily due to its tougher "people management" practices
You could get that in Canada. No language barrier, same education, same culture (largely), same exact time zones, flying folks in if need be is far simpler.
I've interviewed and hired many engineers from the UK and the first thing you'll notice are candidates with resumes filled with pointless certifications and years of cookie-cutter experience at financial institutions working on old technology. I could get into the more esoteric aspects of what happens in really hyper-growth SV startups but it would come as a culture shock to a 9-5'er from London. It also involves sacrifices and lifestyle changes I think most of those folks would be unwilling to make.
As for everything, there are plenty of exceptions: two of the most talented and fastest growing Software Engineers I met were Americans - and they didn't have any formal CS education.
Over the years I definitely picked my political incorrect biased list of countries to avoid for talent sourcing. I could spend hours talking about funny stories involving bad contractors from India, Hungary, Eastern Europe and Spain but it's absolutely pointless.
You'll find terrible engineers everywhere, even in the states. USA companies have incredible wealth compared to other companies and they can afford to spend ridiculous amount to try and weed out the majority of terrible engineers.
Having hired contractors who used to work at FAANGs, I can tell you I found some pretty terrible hires there as well. Almost like memorising algorithms and CS exercises and then spending 4 years trying to build a case for your promotion isn't going to make you improve as an engineer.
For every competent Indian that moves to the US for a tech job, there are 4 that decide to stay back home for a $10-15k-ish job.
India is increasingly training several orders of magnitude more engineers than the US. Even if estimates were overestimating the number of competent Individuals in India by an order of magnitude, the number will still over shadow the American workforce.
It has already happened once with China. It would not be surprising if it happens with India. Only this time, the competing workforce will be fluent in English.
Given the vagaries of the US visa regime, plenty of talented Indians can't come over even if they wanted to.
Wait, what? Several orders of magnitude, like at least 3 orders of magnitude? So even though India has 4x the population of the United States, it's training at least a thousand times as many engineers? That's amazing!
It's also totally not true at all. Spend a few seconds on Google.
Note that I don't particularly disagree with the rest of your comment.
An order of magnitude does not need to be decimal. Order of 2 is also sufficient.
The US produces between 50-100K CS grads (depending on how you count majors). India produces about 1 million by the same metric.
That's a 10-20x difference.
Employers aren't going to drop salaries in the midst of a pandemic, but if remote work persists, salaries will drop substantially. It's simple supply and demand, and I'm sure there's data out there (for existing remote positions) that corroborates this.
Many of these are temporarily waived by the authorities for the duration of the pandemic but that won't last forever.