Comment by akiselev | Hacker News Reader

Comment by akiselev | Hacker News Reader

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> It is worth noting that software salaries are artificially inflated HEAVILY due to a general unwillingness or lack of interest in hiring overseas developers.

Because it's been tried before and for the most part it was an abysmal failure. I was just starting out doing some basic web freelancing as a teenager in the 2000s and even I got roped in to clean up an outsourced project after being outbid a year earlier by an overseas firm during the first outsourcing wave. Lots of people on HN have horror stories of cleaning up from that era.

We've been here several times before - like literally just this past year of everyone saying "oh but now you have to compete with remote workers everywhere!" Salaries keep rising because software is an arms race. The companies making the most profit will continue to invest in getting the best people and outside of the odd global crisis, the industry will continue to grow as everyone else tries to keep up both in technology and in hiring. All those firms I cleaned up after as a kid are still around today and bigger than ever, yet on this side of the ocean we keep making more and more money.

I think we've got at least a century before software hits the diminishing returns that the industrial revolution did. My local lumberyard is still using DOS machines probably made before I was born.

Overall I agree with you, and my experience has been similar, but I think the comparison with outsourcing is not correct.

I would argue that outsourcing failed primarily due to companies trying to farm out the coding to uninterested entities whose incentives did not align well. Not necessarily because the foreign workers doing the coding were bad.

Back to the guy in Argentina -- I imagine that he/she is actually in a reasonably good position as the amount of remote work increases. Indians not so much, because they are 12.5 hours ahead (of Pacific time). Argentina is only 4 hours ahead, which makes for a lot more overlap.

So I think the field has leveled a little bit in that sense, because if you have a remote developer in another state, they are not very different than one in another country who happens to be in a similar time zone. The other big barrier IMO is communication, so someone in Argentina who is not merely fluent in English but speaks it very clearly could be in a really strong position.

I'm in regular calls from the East coast US to central Europe so, usually, a six hour difference. That feels about the limit to me before things get more difficult, people need to work outside of normal business hours, etc.

You can do bigger differences and many of us do on occasion. But on a multiple times a week basis, both 5am calls and 11pm calls get old.

Yup, and it's worse if you're on the US west coast, where it becomes 9 hours (10 to eastern Europe), and then any synchronous meeting means one party gets up early or the other stays late.

My intuition is that a max of 3 or 4 time zones is the sweet spot, but it's cool to hear that you've had success up to 6.

The team I'm on have our calls with the Czech Republic at 9am or 10am. And we have calls with the UK in earlyish business hours to noon as well. They may end up working a bit later with action items from meetings but generally seems to work pretty well.

> I would argue that outsourcing failed primarily due to companies trying to farm out the coding to uninterested entities whose incentives did not align well. Not necessarily because the foreign workers doing the coding were bad.

It failed because the intent was to cut costs and they got what they paid for. The successful ones were genuinely trying to expand their engineering talent pool and quickly figured out that the cost savings were a marginal benefit that made up for some of the extra overhead of international accounting and management. Quality engineers are one visa lottery away from Western salaries so the local median salary is often completely disconnected from what a FAANG might pay for a decent engineer, which is a rude awakening for anyone trying to cut costs without destroying the quality of their output. On top of that, the people most likely to make it a smooth transition are also the people most in demand (arms race!) and competition for them helps evaporate any savings for the business.

The guy in Argentina is in a great position to get hired to work remotely for an American company, but I don't seem him as competition regardless of how good he is. It's an arms race so my employer's competitor can't replace their team with Argentinians because that down time will give my employer time to crush them (which we learned in the 2000s). They can hire an extra team of Argentinians on top of their existing head count but if they do that my employer will be pressured to hire a team of Brazilians. Before you know it, both companies are hiring even more local teams to help manage the flow of work between their existing local teams and the outsourced ones.

There's more work and money to pay for it than there are people to do it. Until that changes, we're not the ones competing, the employers are.

There were several chapters in the history of US IT outsourcing. After Perot Systems in the 1980s and Tata/Infosys/etc around 2000, a third era has been underway for the past 5 years or so: extending IT operations to parts of the US and Eastern Europe with much lower labor costs than large US cities, esp. as compared to the US left coast.

This has worked far better than the 'Tata' chapter which exported to very cheap Asia where staff tech skills and the support model were too often haphazard and frequently underperformed. Hiring remote staff in new-growth US cities with lower CoL (e.g. Charlotte NC or Austin TX) has delivered capable staff and nearly synchronous operating hours to the main office. However in the past 2-3 years, IT labor costs have risen greatly in 'secondary' US cities, reducing those savings substantially.

In my experience, remote staff in eastern Europe have skills equal to US folks, but the 5 hour mismatch in daytime hours and their inability to visit US sites where non-IT R&D work is done and data is acquired does hamstring this model.

I wouldn't be surprised if a 4th era of outsourcing arises soon: remote work in small towns across the US and in western Europe. European IT wages often seem to be 50% or more below US large cities. That differential is likely to diminish as remote work increasingly is established as a new norm.

While I was working in my previous job for some clients in USA, I regularly had meetings starting from 6PM up to 10PM local time. I'm from Bulgaria. We have 7 hours difference with east coast. I had so much compensation hours/overtime that I was earning 20-25% more on top of my salary(outside of office hours are payed with multipliers) and had extra vacation days. Nowadays I'm not so inclined to make this much overtime, however I'm OK working with shifted office hours.

I think a presence in the same legal system is also a barrier. If you open a branch office and hire and manage them seriously, you can find a sharp team, but this isn’t all that cheap. If you try to write a small check to some contracting company with no reputation, they will deliver “tested” tarballs that are littered with syntax errors because they know suing them isn’t really feasible.

I recall this period as well (early to mid 2000s) and the fears of overseas workers led me to change my college major at the time. There was also still a big hangover effect from the 2000 dot com bubble. I remember seeing low developer salaries and, although I at least somewhat enjoyed coding and tinkering around with technical things, there were other pursuits I enjoyed more. I kind of regret not sticking with computer science but my career has turned out fairly well (although I think I would have optimized my income faster if I had stayed a computer science major).

I've been thru off-shorting with India, China, Russia...

I'm sorta wondering what country would be next. It has to have a large enough labor pool to fill the positions, and still be cheap enough to at least look good on paper..

My guess is most likely Africa, though I think somewhere in Central or South America would have a very strong advantage due to the narrower time offset.

at least here in Germany the biggest companies like to expand into Eastern Europe (think Slovakia, Hungary, also Russia), where these IT experts help in the German projects. They even get many of those people to learn German! The price pressure doesn't really stop there because while at first Slovakia was the way to go, now Hungary is xx% cheaper.. and so on and so on...

For the Hungarian HN readers: these are the salary ranges you should aim at when working for a German company (remotely or in Germany):

- junior: 45K - 55K - medior: 60K - 75K - senior: 75K - 90K

Although getting more than 85K as an individual contributor is not easy.

Whether in EUR or USD, those numbers will feel pretty good in Hungary.

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