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Comment by brianmcc | Hacker News Reader

I am sceptical. Reminds me of the predictions 20 years ago that outsourcing/offshoring would eliminate hands-on developer jobs in US/UK and other "expensive" countries.

Timezones, language factors, cultural factors, retention and exclusivity challenges plus basic logistics stuff like payroll and taxes all matter a lot. None of that's insurmountable but it takes a level of effort that can be very high.

And I say this as someone who quite likes working remotely.

I just don't see it disrupting the world in the extreme way it is sometimes portrayed.

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The payroll, taxes, and labour laws are a big barrier at the moment. Even if you are happy hiring someone as an independent contractor to simplify the first two, how do you know that you aren't breaking local laws, e.g. about disguised employment? You still have to be familiar with local laws and regulations.

It seems like something that an intermediary could help with, and a few do exist, although they are pricey.

Simplification of regulations into a standard framework (without weakening them) would be a huge win here but I can't imagine that happening anytime soon, even in the EU, as labour laws are so sensitive.

Those middle-man companies charge extraordinary margins. I don't know whether that is warranted. But you could pay $150/hr and get $15hr developer. Something's wrong with that math. I think that's because of lack of competition, basically they charge as much as possible and pay as little as possible, because they can.

Sounds like an opportunity for a tax-middle-man-as-a-service to disrupt that industry. The uber of outsourcing. I honestly don't know if this is a tongue-in-cheek reply or not.

These are called PEOs, or Professional Employment Organizations.

It is closer to 30% overhead, but much of that is based in providing benefits to the employee outside the country of origin. The cost is also relative to the country.

I suggest that it would be a WeWork/Regus situation. Nothing about WeWork was revolutionary - but if someone had enough buzz and funding they might be able to take over and expand the market.

If you can outcompete local rates by 30%+, why would your employees complain about disguised employment?

Labour laws generally come into play when professions are poorly compensated or mistreated - pampered tech contractors being paid far above local market rate don't really fall into that category.

In Romania ar least, the equivalent of the IRS doesn't like the disguised employment, because it leads to much lower taxes (8% vs 35%). There are around 7 criteria which are used to determine if a relationship is of employment or not. If they say you fulfil enough of those criteria, even if your contract is a freelance contract, you/the employer will have to pay the extra taxes.

The "independent contractor" bit of parent's post is what's relevant here.

In the UK the Government has clamped down on freelancing by saying, simplified grossly, if you look and act like an employee, but claim to be an independent contractor using alternative and often more favourable remuneration strategies, then you'll be firmly disagreed with and instead you'll be considered an employee.

The Govt considers this "disguised employment", not the freelancer.

More on this: https://www.gov.uk/guidance/understanding-off-payroll-workin...

But it's the key point parent is making - you need to know about this stuff for bringing in freelance talent in/from the UK. Not least because as a hirer/commissioning party the UK Govt will come after you if you have got it wrong!

>> outsourcing/offshoring would eliminate hands-on developer jobs in US/UK and other "expensive" countries

Remember companies like EDS? During the 80's and 90's all the development and support for the 'big' companies in the USA was done by companies like EDS. They employed hundreds of thousands of people. Then in 2000's they started going to India etc.

And yet there's still no shortage of developer jobs in the US.

In any case, did EDS succeed? I had forgotten about them until your mention. Just because they offshored to India, it doesn't mean it worked and their business is flourishing.

I think the model has changed, at any rate. Companies like EDS are mostly obsolete. Sure, professional/technical services companies are still around in the form of IBM and their ilk, but they're not even remotely the dominant way of doing things.

>> Companies like EDS are mostly obsolete.

How so?

They were bought and sold a few times and sort of exist as DXC right now. They claim to have 134,000 employees, I get approached by their recruiters a couple times a year.

They are insourcing to places like Louisiana

Oh totally. But hands-on tech jobs in the USA aren't eliminated, the sector is buoyant!

Colleagues in India feel like colleagues not "replacements" these days.

> Reminds me of the predictions 20 years ago that outsourcing/offshoring would eliminate hands-on developer jobs in US/UK and other "expensive" countries.

Well in the corporate world offshoring really is everywhere. Even Goldman Sach's, #2 office for engineers in is Bangalore.

Worked in tech at a large financial - while it may be second largest by headcount, I would guess perhaps not by total number of MDs/Partners? In my experience at a similar company, the off-shore offices were not viewed as being innovative or producing the same level of value per-person. There were a lot of junior/mid-level people there, but the projects were typically being driven from the US/UK. How does that stack up with GS?

What I've seen from a financial company perspective is it's mainly cost center development that was handled by the overseas offices. Product and revenue development stayed in the US.

It's the same for most IT companies.

The actual core business, secret sauce, top level management stays in the home country (in this case the US), and the remote offices get the grunt work and crumbs.

Large corps have an economy of scale with this stuff. The smaller the company, the bigger a barrier it is

Once you're big enough to have incurred the extra overhead of having satellite offices in very different timezones adding more of them doesn't really add much more overhead.

Maybe they've always existed and I'm only noticing now because of remote working but there's a whole industry of companies that provide HR and IT (helpdesk level) services for smaller, distributed companies so you don't have to take on that additional overhead yourself. I think there's definitely potential for the corporate equivalent of geeksquad in the remote working future.

Sure but my main point is that hands-on tech jobs in NY, SF, London, etc, remain plentiful.

I think it disrupts it in corners. I'm fully embracing it in the company I'm building, and several of my tech-startup-running friends are too, though I know plenty of people who aren't.

How are you dealing with local tax and labor laws?

My employer (mid-sized international software company) recently posted a revised work/travel/location policy. Basically, for anything over a month, we are only allowed to work in a locale where the company has an existing presence, and we have to notify the company in advance so they can plan payroll accordingly. I believe (thought not 100% sure) this is because they effectively transfer us to the local entity for the duration of the travel.

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