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Comment by PragmaticPulp | Hacker News Reader

It’s funny to see this site gather so many upvotes while the server is down. I think by now everyone knows very well that software engineering salaries are higher in the United States.

If the shift toward remote work really comes to fruition, I fully expect EU software salaries to rise. I’ve hired a lot of excellent remote developers in European countries. The trick is to pay them American-level wages, which are often substantially higher than what they could get locally. When you’re paying that much, you basically have the pick of the best developers you can find. Not only that, but they’re extremely grateful for the opportunity.

The obvious downside is the time zone difference, so this only really works once you’re large enough to have a whole remote team and someone able to manage them in their time zone.

This is also why I don’t believe the rise of remote work (if it actually happens) will be as good for US workers in major cities as they want to believe. There is a lot of underpaid, highly qualified talent on the international remote market.

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Silicon Valley engineers are for the most part arrogant, they sound like factory workers who said Chinese manufacturing would never displace their jobs and "made in America".

Companies have shown again and again they are willing to sacrifice quality if it increases profit. In this case I'm not even sure quality will be sacrificed in most cases because as you said there are tons of great engineers available

Not sure about SF arrogance but the whole “Your job is going to get outsourced to India don’t get into IT/Software Dev” thing has been around since the 90s. It’s 20 years later and the job market is better than ever, salaries are better than ever, and a lot of companies who fully embraced the IT outsourcing trend are realizing it actually hurt them in the long run. Short term it helped but now they have lost their market place edge they once had. Also worked with a company who outsourced all their call centers to Eastern Europe from Scotland and other Northern European countries, their customers hated it.

Not against outsourcing it’s gotta be a mixed bag. You’ll be extremely slow if you have to wait until tomorrow to get any answers.

If you know what you are doing by building an organic team in a foreign country, you can still get real bang for the buck. If you try the traditional outsourcing model by offloading shit to a 3rd party, you will get hurt.

Agreed. There’s no way you can get away with not having a global team unless you’re a small company operating in a small market.

The company I work for now has a team in India and the difference in skills is night and day compared to my last job. The turnover is much much less as well. I suspect they pay better and don’t rely on scummy 3rd party “coach you to pass the interview but have no real experience” providers.

Managers who know what they are doing are typically a lot more expensive than software engineers who know what they are doing. So the only reasonable way to outsource software engineering is to also outsource the corresponding management, and management don't want to do that.

distributed working is a totally different thing than outsourcing. We are talking about companies having more options for their mode/base of operation and talents. We are not talking about corporates sacrifying quality control by adding layers of managerment in other countries in an attempt to abstract away the development process.

The parent comment said displace place jobs just like Chinese manufacturing did to US manufacturing.

Outsourcing to India didn't work very well due to cultural differences.

Communication was very hard, even when language wasn't a problem.

People afraid to say they didn't understand something and trying to wing it with tragicomical results. People not raising issues until after something exploded not to offend you.

I think outsourcing to Russia has some good potential but the level of English is still nowhere close, even in the new generations. Eastern Europe is more promising but English is a bit hit or miss. I see plenty of outsourcing to Eastern Europe from the UK. Similarly, I see more and more outsourcing to Latin America from the states.

Europe is much closer to the States: if you outsource to the UK or Northern-mid Europe you get English speaking people who will act similarly to US employees. Sure you won't save 11/12 like in India but you will save a good half compared to SF, with the only hassle being the timezone.

I think we haven't seen the last of outsourcing.

This isn’t a zero-sum game where 1 remote job gained equals 1 local job lost, though. Demand for good engineers still exceeds the available supply, in my experience.

Rather, I see remote work as a sort of leveling of the playing field. As the location advantage is diminished when it comes to compensation, the pressure starts to gently push everyone’s comp toward the median. Highly paid people might see some downward pressure but the underpaid people will start to see some upward pressure.

Silicon Valley jobs aren’t going away, though. In-person will always be in demand.

And then the managers that cut cost jump up or over the ladder out of the department, and the next person deals with the smoking wreck of the situation, and they insource everything again. Then two years later, the cycle repeats.

The counterpart of this is that initially, the outsourcing group brings their A-team to bear, in order to win the deal. Those folks are generally as good as the people that they replaced. Six months later, those top operators are shifted to the next deal, and the C-team takes over, and then churn and attrition reduces it to a D or F team in short order.

Also Americans don’t realize the scale of transformation that is going on in places like India and China. As far as making consumer web apps goes India is increasingly the place where unicorns emerge every week and some companies operate at very large scales. Thanks to the internet knowledge is spreading quickly and remote work is a booster.

The gap in terms of knowledge and networks is closing with places abroad.

I'll be downvoted to hell for this.

I'm from Europe, I've worked for several SF based companies (some hired, some through acquisitions) and can confirm that , despite there are some really, really smart people there are also a lot of people that have no clue what they're talking about, as in most places you have a mix of it. But almost all of them are incredibly arrogant and most have an incredible tendency to take decisions based on what's important for their CV and there career and their podcast and their YouTube channel than for what the company or the problem at hands needs. I'm not sure I'm taking again a job for a west coast based company.

I worked for a couple of months from Cyprus with a team that stretched from Pacific to Eastern time. For one project where I was able to build features on my own with minimal coordination it was great. For two other projects it sucked. If the team isn't really used to async collaboration (you know, detailed pull requests, existing documentation, etc) it just doesn't work well.

I'm not worried about my North American salary getting scooped from Europe. I think there are many factors that go into why there is such a salary difference in the first place anyway. For example, engineering in Germany is much more prized than in Canada so many of the technically gifted Canadians go into software instead. Anyone can read the situation of their local region and sort of self-select into the better professions locally, which makes a bit of a feedback loop.

As a counterpoint, software engineering saleries will fall. There isn't a shortage of clever people, it is a desk job, very low stakes and lots of opportunities. Lots of people want in on this.

I'd guess the actual reason that US software developers make more is that it is easier to make lots of money in the US generally, so the profitable companies go there & then the developers make excellent wages due to geographic effects.

People have been saying this for 40 years and we have seen time and time again, as engineering gets “easier” by 1 click it makes each individual engineer 5x more effective, but it only expands the total pool of people available to do the work by 20%. The effect that dominates is that by making work more efficient/productive, there are many many more places where engineers can be a net value add to business metrics. It’s a textbook case of jevons paradox applied to labor markets.

Jevons' paradox applies to efficiency, not massive increases in the amount of supply. There isn't really an argument that foreign workers are more efficient than local workers (unless they are being paid less!).

Yes, we have tons of people who can code at a proficient level in one language. However, don't underestimate the difficulty of software engineering. The people who we need to build our applications are getting really hard to find and especially keep around.

Sure I can get someone who will code a basic Spring Boot application in a pinch. But do they have the excellent communication skills, knowledge of build systems, cloud knowledge, understanding of TCP and SSL, HTTP protocol, forwarding and reverse proxies, containerization, unit testing, and version control just to start. This isn't mentioning secure design and the hundreds of other small things they will need to learn and understand.

Then they have to be willing to get up to speed on new libraries and be able to read and understand software. Will they be able to set up remote configuration for our swarm? Will they be able to do the research if they don't know something? Do they have a firm base of computer science knowledge to make that learning stick?

It seems like it would be more value efficient to train a person making 40k a year how to do that then pay someone hundreds of grand a year who already knows how to do it.

This information seems like it would be of interest to the board of directors at companies paying hundreds of thousands of dollars per year to employees.

I assumed that they would have hired management that takes labor costs into account.

in this post pandemic world, now that companies have set themselves up for remote work.... why would they hire someone in the US when they could hire someone cheaper in another country?

The point of my comment was to sarcastically point out there there are very qualified people sitting in decision making positions with an incentive to lower labor costs.

It is possible they are making a mistake and completely missing a great money saving opportunity, but I would not bet on it.

There very well could be new opportunities for labor arbitrage that can be taken advantage of by many businesses, and if so, it will be evidenced by the success of companies that take advantage of it. But it might take some time.

But it is not a new idea, and is certainly one that has already been tried, and so if certain companies are not taking advantage of lower labor costs elsewhere, then it is prudent to assume there is a good reason.

My point is that the same people are also averse to risk. So now that covid essentially forced these companies to outfit and train their teams for remote and build a culture around remote work.. and they found it successful... Pandora's box may have finally been opened on outsourcing.

We live in a different world than a few years ago.

I hope I'm wrong because I'm benefiting from geographical effects and I have no delusions that I'm smarter than almost 6 billion people.

I can see that could be true, and communications technology and bandwidth has improved, so perhaps the situation has changed. I would expect it to take years to manifest though, maybe even a decade or more.

Crossing my fingers!

The problem occurs when, after training that 40k a year developer, they BECOME a 100k a year developer. Unless you can lock them in with an amoral non-compete or some other form of illegal method, they will find out that they are worth that much and leave for someone who will pay them.

In many countries a 40k a year developer IS a 100k a year developer in US.

I thought so too but unfortunately it would take someone making 100k a year somewhere between 6 and 12 months to teach someone making 40k to do the job properly. Then that someone would get a job offer making 100k and quit.

You didn't recognize that there are plenty of European developers capable and willing to work on the US time zones. I presently split my life 50/50 between Toronto/Netherlands so I live half my life on Eastern Time and the other half on CET. I fly on weekends so I'm available during the week and when I'm in the Netherlands I fit work into my daily life at the time clients need me to fit in. Some days it can be tiresome, having to work until 11pm, but other days if I have a light work load with standup at 3:45pm CET, some days that's my only meeting and I can pretty much work when I like. It works out well.

That sounds... Awesome.

I have always preferred to stay up and wake up late, but never thought of simply working in a different time zone.

This is also why I don’t believe the rise of remote work (if it actually happens) will be as good for US workers

Beyond just time zone issues, there are substantial legal, cultural, language and other issues that will prevent this from happening on a wide and sustainable scale.

I have worked with many companies that tried this and failed spectacularly. Examples of problems encountered:

1. Having to explain every little thing that people of the same culture intrinsically know

2. Being slapped with regulations that nobody in the U.S. has even heard of

3. Cultural differences surrounding vacation / other time off

4. Overseas contractors literally copying the company and using their data and using the software they were hired to write to compete against them. I spent four days as an expert witness in a U.S. Federal court case over this one.

I concur, my experience too. Cultural differences is a big one. Both for the finished product, and with regards to organisation costs which are often invisible, just felt and never accounted for with numbers.

I'm less familiar with 4. But seen many cases of data leaks. It's very challenging to figure out the purpose, competing is only one.

> I think by now everyone knows very well that software engineering salaries are higher in the United States.

It depends. In Switzerland for example salaries as as high as anywhere in the US while the taxes are somewhat lower.

Obviously there are exceptions and not every EU dev is paid less than every US dev. The point is that there are large numbers of developers across the EU who can stand to gain a lot by working remotely for US wages. Not every last one of them, but many. Switzerland is only 2% of the EU’s population.

> Switzerland is only 2% of the EU’s population.

The Bay Area is, similarly, only 2.5% of the US' population.

Part of the draw of hiring remote is that you don’t have to pay Bay Area salaries.

I wasn’t referring to Bay Area salaries. I was referring to normal US developer salaries, which are still higher than common EU salaries.

My comment was about general hiring, not the outlier edge cases. If you want to pay Bay Area salaries you can obviously compete on compensation with just about anyone, anywhere with very few exceptions.

I think that's the wrong take, personally.

The draw of hiring remote is that you will get access to great engineers that would otherwise never want to move to the Bay Area. You get to compete for their talent if you're offering full remote, but so do other companies that pay "Bay Area salaries".

I think it's great for software engineers everywhere, but not great for the Bay Area itself since the incentive to move there becomes lower (salary is not the only reason people move to the Bay Area, but it's definitely a big pull). Although if you live there that means less pressure on real estate ;)

Switzerland is 0% of the EU population because Switzerland is not in the EU.

In Germany, even good software engineering jobs pay on average 2-3x less than their US equivalents.

Salaries in Switzerland reach $500k-$1 million/year? Honest question, I know nothing about Switzerland.

For software engineers it's not unheard of, but that will be at banks (in specific cases), or FAANG (who have offices in Zurich, typically)

EDIT: I'm a Swiss software engineer if that wasn't clear. I don't make that much though unfortunately :)

Cool, thanks for sharing. It's nice to hear salaries like that are not limited to SV.

It's really not the norm though, to be clear. 500k-1M is really outliers (senior staff engineer with 20 years career in a private bank etc...)

Most of the jobs are "normal bay area" salaries, but cost of living in Switzerland is as high or worse as San Fransisco, roughly.

For the bankers they do :-).

See https://www.levels.fyi/Salaries/Software-Engineer/Switzerlan... for the very top.

For a more meaningful view of the Swiss market (there's almost only Google on this site for Switzerland), I would have a look at https://swissdevjobs.ch/. There's not a lot above 150k.

L6 or L7 at Google can have total compensation in that range.

Taxes are a bit complicated in Switzerland. While they are nominally low, you pay separately for things that are covered by taxes in most other countries. One example would be health insurance.

So while you'll definitely be paying less if you don't have dependents, if you have kids and are earning "normal" money (e.g. 50-100k CHF gross/year), your total tax-like expenses would be similar to most of the Western world.

But marginal taxes *are* way lower than most other countries. E.g. if you're earning 200k CHF gross/year, your marginal tax rate (in Zurich) would be something like 23%.

Just adding a bit of perspective.

I work in a unicorn company based in California Bay Area that has dev teams in Europe (Netherlands, Lithuania), India and Brazil (probably other locations as well). IME, this is how it works: we pay higher than local salaries, but they're not as high compared to Bay Area (think location-based salary adjustments). This doesn't really put meaningful upward pressure on average companies to catch up because salaries are often tied to what they're able to pay based on what market they serve (local city vs Europe vs global).

My understanding is that with Bay Area salaries come Bay Area interview bars, and that this bar is very high compared to your local dev shop. Not many can pass these interviews (the failure rate is high even in Bay Area). IIRC from my interviewer stats, the vast majority of candidates didn't even get through the screener round and less than a fifth were offered positions (I have in the range of 100s of interviews under my belt). And we only recruit fluent english-speaking candidates, which shrinks the pool significantly.

Timezone differences are a big deal, even if the employees in far-away timezones form full-on teams. Communication is slow and inconvenient, and sync meetings at 9PM/7AM get old pretty fast. Typically there must be some sort of clear cut advantage to outsourcing that offsets the timezone issue (e.g. my understanding is that our India team is there because network conditions there are impossible to replicate in US and reliability despite wild variations in coverage is important for us).

And if you think being highly qualified is a high importance criteria, consider that in our Covid-related round of layoffs, a number of european teams got sacked. And these folks were no slackers, they're seriously some of the brightest folks I've seen.

In short, high pay European jobs do exist, but they're not common, they are hard to land and they are hard to keep.

> It’s funny to see this site gather so many upvotes while the server is down. I think by now everyone knows very well that software engineering salaries are higher in the United States.

And this fact that the site is down PERFECTLY highlights the [insert derogatory adjective here] of some development and design mindsets floating around in SV. Rather than having some content laoded by an HTTP server, we send over a javascript framework that then PULLS the content and lays it out, and we show a LOADING SCREEN in the meantime. It's using the web server and browser to completely reinvent the webserver and browser, for no gain and an inarguably worse user experience.

The fact that part of the throbber image is the "object not found" placeholder from browsers is so perfect for the site that the irony is absolutely self-recursive.

On a macro scale this is happening in every field in America.

Any knowledge worker job that doesn't need to be done in person can be outsourced to the billions of people in the rest of the world. Radiologist, Accounting, Law, Animation, etc.

What is the value of a U.S. Hacker News moderator in the valley, for example, over a smart Croatian or Latin American person who will work for a fraction of the price?

Many peoples advantage is geography and connections, not talent or skill, which there is no shortage of amongst billions of people.

The ultimate result in my opinion, when no job is safe from outsourcing, is going to be the decline of wages and the middle class in America.

> The ultimate result in my opinion, when no job is safe from outsourcing, is going to be the decline of wages and the middle class in America.

This result has been evidenced already over the past 5 decades or so.

I think the Pandora's box was open though and it may be moving faster post pandemic.

> I’ve hired a lot of excellent remote developers in European countries. The trick is to pay them American-level wages, which are often substantially higher than what they could get locally.

Are there any websites that specifically cater to advertising these kinds of positions?

As someone in London currently working at a FAANG it's becoming clear that the only way I can hope even to match my current salary is to A) get hired by another FAANG or B) get hired remotely by a US-based company.

If there is an option C) that I haven't thought about, please do share :)

If you are expecting to get the same total comp as you currently do with with RSUs then your only option in London is fintech or a hft/quant firm. I have received offers from companies in the city that net out to £350k+ as well as a small equity upside, but even at a FAANG your best bet for good comp was to join them in the US and then get transferred to the UK office. It is also worth noting that while the price trajectory for most of these RSU shares has been sharply up in the past decade it can easily plateau or even trend down.

If you really are interested in planning your post-FAANG path with an eye towards the total comp I would suggest networking into fintechs. The better dev jobs are not always advertised, so who you know can help get you in the door before the job is ever posted.

I'm not really expecting it. I'm actually not sure what to expect. I'm still very early in my career, I've been very lucky to graduate with a position at a FAANG but now am feeling like there is nowhere for me to go but down comp-wise. Traditionally I have heard from family and friends that accepting anything short of a raise when switching roles is a loss, in fact I have heard and read many times that switching companies is the best way to get a raise in the software industry. Is it typical for engineers switching from FAANG to non-FAANG to take a significant pay cut? (~50%)

As for fintech, I have had an internship that has put me off them. But maybe it was just a bad place and I shouldn't write them off completely.

On the other hand, I'm based in Europe and if I decide to work remotely for a company in the US I will want a significant raise just to offset the extra costs and risks.

my own software development specialty (in California) was massively outsourced to the Ukraine in the late 90s. So, your prediction is old news.

Could you share what speciality was shipped to Ukraine?

Plenty of specialities are shipped to Eastern Europe. Ukraine being a well appreciated destination due to general grasp of English among young population, and hard working good engineers. Like the specialities we see delocolised to India, php ecommerce dev/customisation is one. And the whole enterprise j2ee kind of stuff, platform development. And also mobile dev has become popularly outsourced to Ukraine.

The software industry is seeing the same thing as what happened to factory industries. First the specialities that are least challenging to manage offshore, then eating the rest of the profession, leaving some niche I suppose like we still produce certain type of clothes, furniture and electronics in the well developed countries.

I've lived in several countries where outsourcing is common, it's always the same schema. Flocks of non very competent wanna be tech riches launch businesses of hiring cheaper labour with the promise to deliver quality projects. In the end it's a mess of a code base, but client see the bill as more digestive than hiring a team of people with all the tax and high social benefits to pay without any guarantee that anything will work in the end.

I don't know how the outsourcing hype will end given the difficulty to streamline software development. There is little cultural/message loss when sewing t-shirt with a logo and well defined patterns on them, all designed by an artist and industrialists in Paris or Milan. The translation of digital application which spans across multiple type of devices, on terminals and multiple servers, constantly evolving to quickly adapt to business needs is another story. But hey maybe we will rather have somewhat satisfying software made abroad for cheap and guaranteed further unemployment locally than pay what is worth and have products well fit for purposes.

Edit: typos

> my own software development specialty

What was it? Sounds like a horrible experience. I wouldn't know what to do if they decided they don't need Java/Spring codemonkeys anymore.

It's easier to outsource to smaller cities and towns. There's talented workers all over the US. They are in a closer time zone and are native speakers.

> There is a lot of underpaid, highly qualified talent on the international remote market

Maybe the laws need to be updated. Nobody anticipated remote work when the laws on visas/green cards were written. It seems like an exploit that you don't need any to work for an American company potentially taking the spot of an American worker. American taxes aren't even withheld in this case apparently.

remote work makes local laws useless.

If they make laws in the US to make it harder to have remote workers to protect local people then the companies will use an existing foreign office or open a shell office some place where laws are friendlier and hire from there.

Most companies don't hire international remote workers directly because of the costs associated with international tax reporting. If a worker is in another country, that means tax withholding / reporting in multiple places. So it's usually done as contract work through an international recruitment firm which handles all the payroll / tax stuff, or not at all. In any case, even if an American employer hired an American on contract, the full brunt of payroll tax would be on the contractor. Companies only pay half the payroll tax for employees classified by W-2s.

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