The $150k Solution
garann.com
garann.com
yes, a thousand times
I realize that we have large variance in both what people work on and how people work on things, but with my personality and most of the work I've done over the past several years, I need a quiet place with no disturbances to get my head wrapped deeply around what I'm working on.
It's amazing how management will spin any little thing to gain control over the workplace.
While I'm ranting, if any managers/other people designing spaces are listening, use soft/indirect lighting. Overhead fluorescent lights that I can't turn off are the devil.
I hear this a lot and am starting to wonder if they teach that in business school?
You don't motivate people by "aligning them with the company vision". That only leads to these embarrassing company events where the 3 stakeholders gush over their "mission statement" for 45 minutes straight while 3/4 of the attendants really only wait for the free pizza to arrive...
You motivate people by treating them like adults, paying them well, and by minimizing the amount of bullshit in their workflow.
Yes, you can't motivatve everybody for everything, but I do think it's possible to achieve something with positive feedback.
It's easy to naysay "all that traditional biz school bullshit" until it's your job to make 10 top-notch programmers who are each convinced they are great architects to all write code that somebody else is going to pay for.
That makes no sense. That isn't your job, it's your CTO's job.
If you're the CTO and manage to ruin this so bad for them that "motivating the team" becomes an ongoing concern then you should be fired.
I don't know if I personally would go that far, but I can say that after five years of working in an office, exciting ideas communicated succinctly transcend the medium. if you tell your people good things, you can use IRC, twitter, quill and parchment, or smoke signals. it won't matter. they'll be motivated.
In my experience, a good team (with a supportive manager) will find the best equilibrium for getting things done. The team (in concert with the manager and product needs) will understand when people need to work together and when those that need quiet time can go off and do what they need. At the same time, a good isolationist (or a mediocre one, properly managed) will know when it is important to come together and integrate/deliver.
A company (and management) that insists on rigid facetime and all hands on deck, all the time, don't know how to manage projects. I learned late in my career that one really does need to look for signs if a manager is going to be hyper-controlling and if that is a situation you want to be in. Sometimes it is hard, we get worked up in the focus of wanting to succeed and deliver at the expense of our own time and work/life balance.
are you doing archaeological excavation? studying wildlife in a forest? need to do everything in magical shielded rooms with no internet connection "for security purposes"? okay, I probably need to be there for that.
oh, you're writing software? for the web? yeah, I can do that anywhere, thanks...
the quality of my work, both in terms of the product (code, papers) and the experience of working with me (communication, cultural fit, etc)?
just because you have remote people or even just because your entire workforce is remote, doesn't mean that cultural fit isn't important! culture is about way more than how your food smells while you're microwaving it ...
http://www.glassdoor.com/Salaries/san-francisco-software-eng... http://www.glassdoor.com/Salaries/dublin-software-engineer-s...
Because the people who are as good as I am also cost 150k/yr. Salary depends on market value, not what it costs you to live. Just because a rockstar in India can live on 30k/yr doesn't mean he will when he can get more.
(Note: This is reducto ad absurdum, not a comment on how interesting writing bad software may or may not be.)
The Austin businesspeople are right: folks who want to make a lifestyle choice of going to Austin from California should get paid less to do it. On average, they'll earn more than most people in Austin, but less than their counterparts in Silicon Valley.
I see no problem with this. It's fair. You usually only get to choose where you want to live or where you want to work. The other one is a compromise. That's life. Compromises. Why would a businessperson not take advantage of this when someone wants to live in Austin? Maybe the OP doesn't want to live there but a lot of people do.
Working remotely is a compromise further: you will get paid less, you'll get promoted less, and you will be one of the first laid off.
The OP can rant all she wants about "[companies lacking] the tools to communicate remotely, [probably] can’t communicate at all", but the all of us who have done this can tell you that remote workers are almost never as productive. They only work for "guy who takes the app and ports it to Android because we don't care to do it here" type of projects. 1-3 person projects. Large projects are hard enough to manage with the people in the office, and going remote is a nightmare. I've even seen 10 year experts on the specific codebase try to work remotely and it be completely unproductive when they're remote.
There will be exceptions. The one guy who's amazing as a remote worker. Sales people are always an exception. And of course, all of this turns on its head when the company is not desirable. A crap company will pay you a lot to work remotely, then go out of business 6 months later. Generally though, what I've spelled out here is the way it is.
Here's a proposal, given that she's in Austin already, the OP should demand $150K from those companies or her current employer based on this blog post. Tell us what happens over the next 3 months, 6 months, 2 years.
Trying to sell the candidate on the cost of living being lower is actually bogus anyway. At high salary levels you cannot look at cost of living as a percentage difference, you need to look at absolutes. A thirty percent pay cut on a 150k salary works out to about 2500-3000 per month after taxes. This is a lot more than the absolute value cost of living difference.
Making it even worse, you are asking candidates to move from an environment where they have a couple hundred interesting alternate employment options, all at that 30% higher salary, if the current job does not work out. They are moving to a, at best, tertiary market -- meaning there is a very good chance that they will have to move again for their next job.
Opportunity for career growth isn't the only factor in where a family moves - there are a number of other concerns like safety, values, closeness to family, and fresh air and water.
edit: repeating myself
"Should"? Huh?
Did you read the article? Austin companies are having a hard time finding talent. How they can improve their situation is simple economics. That's it. There is no "fair", whatever that means.
> but the all of us who have done this can tell you that remote workers are almost never as productive
Anecdote.
Actually, 80% of the interesting comments in this thread are about how this statement is absolutely false. In the words of another commenter, quality of life is not fungible. Just about any decent developer can go work for Saudi Aramco in Saudi Arabia and get paid 2x what they make stateside. Go be a civilian contractor in the Green Zone in Baghdad, and get maybe 3x. Why doesn't everyone flock to these amazing opportunities, if it's all just simple economics?
Half of what those execs are doing is promotion. It's always shocking to me the number of people who think Austin is like every other redneck part of Texas. Dispelling those myths and getting the word out about the quality of life here is why they pay their dues to the Chamber of Commerce in the first place.
(Many people in the Northeast, for instance, can't even fathom what 300 warm, sunny days a year means. You really can't put a dollar figure on that.)
"Just about any decent developer can go work for Saudi Aramco in Saudi Arabia and get paid 2x what they make stateside. Go be a civilian contractor in the Green Zone in Baghdad, and get maybe 3x. "
As a thought experiment, what if this dev were to get paid a 100x or a 1000x what he could get stateside? Then would you spend a couple of years in Saudi Arabia?
It is about "simple economics", it is just that the price isn't perceived to be high enough, for most good devs stateside, to justify the move to Saudi Arabia. Increase the salary sufficiently to overcome the "climate premium" (and the alcohol premium and the lifestyle premium and the pretty women premium and .... and ...) and you'll see a flow the US to Saudi Arabia (or from California to Denver or whatever).
In other words all the factors that make the Valley a better place than Austin for good devs to migrate to, have a dollar cost. Match or exceed that and devs will go wherever. 2x isn't sufficient to overcome Saudi's perceived yuckiness. 10x or 20 x might work. Pay twice California salaries and Austin companies will have no problems hiring. Good developers are hard to come by in Austin at the price these dumb CEOs are willing to pay. Quelle Surprise!
Fwiw, I've visited Austin and worked in California. If I had to choose today, given two equally interesting jobs and roughly comparable pay (adjusted to cost of living even), I'd pick Austin any day. But that is just me.
"Equally interesting jobs" would be the tough part I think. Id Software is (or was) located in Austin and I doubt they have problems attracting good devs. If your company produces yet another boring businessy CRUD app or social network or Groupon clone or whatever, it might be more difficult.
Of course it's not all about money. I'll take it from your defensive tone that you live in Austin. I do too. I also moved here from San Francisco.
Austin is a great city, but the main thing that kept me happy is that I was able to keep working my job from San Francisco remotely (until I decided to leave). When I start looking again I highly doubt I will find work that is very interesting or pays very well. Plus, like Garann said, most jobs will come with long, boring commutes unless I want to move out to the suburbs (I don't).
I'd argue that many, many software developers in the bay area already know Austin is not "every other redneck part of Texas". All of my friends and coworkers from SF had either been to Austin and liked it or actively wanted to visit sometime. Most SF software devs are not natives, they're from places like Texas and many I've met would like to get out of the bay area, but what Austin is offering is not making it worthwhile.
I want to keep living here. The money and type of work are the only real things in question... and I think this is true of more people than you think. If the only response Austin wants to give is "well, you don't want to live here enough!" then I wish the city the best of luck retaining and finding talent. I'll keep working remote, or have to move back to the bay area, probably. This sucks because I like the town in all other ways.
Here's your argument: Maybe the OP doesn't want to live there but a lot of people do.
Apparently, 25 Central Texas tech executives think you are wrong.
So since we (well, everyone it appears but you) are talking about finding people who have not chosen to live in Texas, perhaps those companies might need to persuade people to move.
You'd have to pay me EXTRA to work in Austin, frankly.
You might not like Austin very much, but many, many bright tech folks here love it. Conversely, I know quite a few people that left the bay area because they couldn't stand the tech scene there. Different strokes for different folks, but the bottom line is that just as the Austin execs are wrong to ignore the upward trend on salaries, you are wrong to discount the dollar valuation of improvements in quality of life.
This is basic fucking customer development 101. Apparently, your Tech Execs think the answer is:
1) Buy everyone a beer and a taco.
2) Offer less salary because our product is Awesome!
Note: cost of switching for us: Move 1500 miles. Miss friends. Make new friends. Break rent contracts. Find rent contracts. And if we, in fact, do not like your product, we have to switch back again. I don't like AT&T much, but you're asking me to break my contract with them, and sign a contract with you to pay more for the same service because it'll be better quality. And if I don't like it, I'll incur the same costs going back to AT&T.
If this is how you "bright tech folks" in Austin do customer development, well...
Have you ever worked at a company where they've brought in the "hotshot" from <name successful tech company here>? I have. I worked for a tech company in a non-hot-tech location that, once we got big enough, brought in hotshots from California. They almost all were:
1) Overpaid -- in our opinion because we were paid far less since we had lived and worked there for a long time.
2) Know-it-all A-holes.
3) Out within 6 months anyway because they realized it wasn't interesting compared to their last hot-shot job.
The people who came to our company because they actually wanted to live there ("move back", as it often was) and were making a sacrifice to do it... now those people were into it and stayed for years. I think this is what the Austin companies are looking for. They're out in the Bay trying to find the ex-UT, ex-Texas, maybe even just ex-Midwest people would like to contemplate moving back. I think that sounds reasonable before throwing lots of money at people who might not otherwise consider the move.
Employers take heed: If you can't afford to pay $150K, if you can figure out how to communicate remotely, you quite often get a deep discount on wages (or a dramatic increase in employee satisfaction) if you find someone that wants remote work that can't find said remote work.
At my last full-time job, some of the best people there worked remote and came in once a month or so. It was fairly clear that these people worked remotely because they were so valuable, and working from home was the perk they demanded as compensation.
As far as I can tell, all people are aware that working from home is a big benefit to the employee; but from what I've seen? people who work from home because they are good enough that they get the working conditions they demand don't get laid off.
I mean, from what I've seen, the employer looks at it as compensation, too; so you might be right that if two people with the same skill and the same pay worked at the same company, one working from home and the other in the office, the one working from home might get let go of first. But if the work from home person is more skilled or is getting paid less (which is usually the case) then they are not more likely to get laid off.
(As a side note, personally I think that getting laid off in the first round is almost always the best outcome for an employee. In the first round, if it is a large company, there are usually severance packages. This package gets smaller in subsequent rounds. Also, if you don't get laid off? well, they reduced the number of workers, but not the amount of work that needs to be done. It's no fun.)
I was looking for a new company 2-4 years ago because the company I was working for turned from being an engineering-centric company to being a paper-centric company. The companies I contacted and interviewed with professed to be interested in hiring me, but were unwilling to do so due to the uncertain economic climate.
Two years ago, one of the companies I targeted got over their fear of the unknown and hired me. Now all the companies that were unwilling to take a chance are lamenting the fact that they cannot hire engineers.
I have but one word for those companies: karma (is a bitch).
In the end, any negotiation boils down into a pure tug-of-war, where both sides pull as hard as they possibly can, and the ribbon ends where it ends based off of the relative leverages of the two parties. To this point, engineers have been handicapped not just by not knowing their leverage, but not knowing they were even playing the game in the first place. That seems to be changing.
Austin's supply crunch for software developers was bad enough by September to prompt 25 Central Texas tech executives to fly to California in search of new talent.
They offered free beer and pulled pork tacos at the Mighty, a warehouse bar in San Francisco, to attract a couple of dozen job candidates. The next night, they headed to Sunnyvale , in the heart of Silicon Valley, for a Tex-Mex happy hour that drew another 45 potential recruits.
http://www.statesman.com/business/technology/austin-battles-...
This is a really smart idea.
There are some great companies here who have no problem attracting talent. The companies that are struggling the most (and making the most noise, unfortunately) are the ones that simply don't get it. They throw money at numerous organizations in town asking them to "fix" this "problem" they have.
As a result, we've ended up with lots of articles like the one Garann refers to in the Statesman lately. I'm not denying that there is a problem here. I'm just stating that it really isn't specific to Austin.
If you know where to look and have the skills, the jobs in the $150k range can be found. If you're thinking of moving here, high end homes in the best schools are only $130/sq ft.
Quality people are easy to find, a quality company is not.
Not to mention nobody in Austin wants to work with you if you're just going to badmouth the town and brag about how much you're paid to put up with it. Sorry to break it to you, darling, but getting stuck somewhere you hate because you're underwater on your house and have "wedding debt" is no reason for anybody to pay you more. If you're miserable here, that's your business. Austin companies are, quite sensibly, looking for people who will enjoy living and working in Austin.
So your advice to tech businesses in Austin is to further reduce the pool of people they can hire from? Interesting, considering this wasn't an "I Hate Austin" post but rather a reply to a story about the fact that Austin businesses currently can't find talent.
Also, just because you don't want to up and move to Austin for half as much money doesn't mean you think it's a shit town. You can want to live here and want to be paid well. For the time being the only way I've found to do both is to work remotely for bay area companies. That sucks for Austin.
The fundamental mistake behind the idea that Austin should pay a premium to attract talent is the assumption that money and happiness are fungible. The author lists a bunch of things she doesn't like about Austin and suggests that the solution is to pay developers more, that people who dislike Austin will come here for the right price. Some will, sure, but will they do good work for you when they're unhappy? Can you expect them to still be around in five years as a guru and leader if they dislike where they live? People don't work that way. They don't want to put down roots in a place they don't like. It's no fun to make friends and fall in love while in the back of your mind you're thinking, "Three more years of paying off my debt and I'm outta here." Not liking a place creates a sense of detachment about everyone and everything that you can't take with you, which is very chic, but not very healthy, and in a good job market, there's no reason for anyone to live that way.
Developers are motivated by a lot of things that aren't interchangeable, and employers should be very, very wary of trying to substitute one kind of satisfaction for another even when they have the upper hand. There's a limit to how much people can trade off respect for money, interesting work for status, or lifestyle for job security. That's why it makes sense for salaries to vary by cost of living. Money is 100% fungible with money, but not with much else. Austin companies have to hire employees who want to live in Austin, and paying them more won't make them like Austin more.
That isn't the end of the world. It's true that developers have more of a taste for ramen and public transit than the population as a whole, and it's true that a lot of developers prefer more urban places such as San Francisco and New York, but some people prefer Denver or Austin. When someone who loves San Francisco compares your city to "the damned Yukon" and "middle-of-nowhere fucking Montana all River Runs Through It," money is not going to make that better, and that's okay, because she's not the only person in the world who can do her job. When someone says, "If I’d been single, more confident in my skills, and sans wedding debt I would have moved to San Francisco or New York," well, personal regrets are not fungible with money and anyone would be crazy to suggest otherwise.
As for her complaints, here are some comments for anyone considering a move to Austin:
commuting to some isolated office park that was cheaper to rent than something on a goddamned bus route
There are actually a lot of tech companies located downtown, and they're hiring. When the folks on the Austin big data mailing list organized a new meetup a few weeks ago, it was felt that a downtown meeting location would be best since that's where most of the potential attendees work. Since developers have such the upper hand these days, there's no reason to work anywhere else, unless you prefer the suburbs. (And if you do, Austin is apparently pretty nice. All of my insanely smart coworkers who have kids also have yards and houses. Most of them believe in religions that terrify me. Austin is the kind of place where nobody is surprised that the creator of Linux and git wears polo shirts and blogs about his kids, because what does the one thing have to do with the other? Squares and non-squares have a pretty relaxed relationship around here, to the point that nobody bothers keeping track of the difference.)
don’t believe that spending two hours on the freeway every day is a healthy lifestyle
Again, there are tech companies downtown, right next to our hike and bike trail around Lady Bird Lake, on which you can run, walk, or bike less than a mile to a spring-fed three-acre swimming pool where you'll often see triathletes practicing in their wet suits.
Austin’s lovely, but I like being able to get a decent bowl of ramen. And take public transit.
I can't help you with the ramen (and I'm very sad about that) but who needs to take public transit when you can live, work, shop, run, kayak, swim, and drink, all within a couple of miles? I won't lie: you'll need a car a few times a week, if only because everybody expects you to have one, and if you ride a bike, you'll need more courage (and have more white hairs) than you would in Portland. Plenty of people get around on bikes, though. Also, there's a Car2Go car-sharing service, even here in the middle of Texas, and some people rely on it quite happily.
tacos tacos tacos!
The Mexican food here really is much better than in California ;-)
THIS. Spot on. The title of the blog post itself tells you the error: paying people more money will get them to do stuff, but they won't be happy about it.
It seems to me that, unless you're a two-man startup, relocating the entire company is clearly going to be more expensive.
Although, that really just pushes the same decision down to the talent's former employers. After enough poaching, I'd expect that the price of local talent would increase until it became more cost-effective to relocate candidates.
@a3camero, I admit that as someone from the south, I should know better than to say "darling." I reached for a patronizing term and used it without ism-checking it. Serves me right for being nasty. It's hard to be offensive to one person without inflicting unintentional and regrettable collateral damage. I apologize.
Maybe it isn't in Texas, in which case, my apologies. Texas is on my list of places to visit and if darling is actually used in a way that isn't sexist, well you just bumped it up a bit more on my travel list!
Btw when I worked for a big civil engineer the bonus was up to 200%
P.S. don't ask for downvotes.
Isn't this what's already happening right now? The US is still competitive only because of the Capitalist structure that is already in place. Obama and other Occupy(tm) Socialists are destroying that, and soon you won't have any jobs left.
p.s.: Most of us from the 3rd world would like the US to keep its superpower status, to balance the threat of China. :)
Unless the laws have changed dramatically in the last few years, there was never any barriers in place contracting labor outside the US assuming you paid them as contractors. If anything, US labor laws favor outsourcing over insourcing "native" contractors due to tax laws surrounding 1099 Technology workers that were put in place in the early 90s.
So really, despite the fact that scales are tipped in favor of foreign contracted labor (cheaper rate, less tax and legal considerations) businesses STILL prefer to hire local labor. To me, that's very telling -- it has a lot to do with the fact that much of the foreign talent, like the US talent, is already gainfully employed and tough to access.
So please, take this "our senior developers (with only 2-3 years of real experience) are just as good as your top US developers" idea and stick it where the sun don't shine. There is a huge benefit to hiring people that have been eating, sleeping, and breathing code since age 10. Our 15 year senior developers might only be 25 years old, but they can code circles around any of your 2-3 year experience engineers.
I do. Started working as a software dev in 1994. Moved to Bangalore to take up another sw dev position at CyberCash India (an offshore office of a Virginia based ecommerce product company http://en.wikipedia.org/wiki/CyberCash,_Inc . ) in 1998. C on VAX Unix. Those were the days. Lived and worked in the US for a while before returning to India (and have no plans of going back to the USA :) ).
" They don't exist, because the software industry has only been there for the last 5-10 years."
You have no idea what you are talking about. Infosys was founded in 1981, for example.
I never worked for Infosys or any of the large outsourced services dev companies, but the idea that there are no developers in India with 15+ years experience is rubbish. (Not getting into whether 'number of years of experience' is a valid metric for judging sw talent).
And as for "living and breathing code", I started programming when I was 10 years old, on a Sinclair ZX Spectrum in the Eighties, writing games in ZX-80 assembler. We even had a club for Spectrum devs - in a small town in South India, in the eighties. I have many classmates who still code every day (though they have fancy titles like "Senior Architect" these days).
Did most of my generation of coders move into management? Sure they did. Are the good developers swamped by tonnes of clueless people flocking to the "hot career"? Sure they are. But none of that is specific to India.
If you have to deal with dumb Indians off a boat who can't speak English but seem to take your jobs, I sympathize. There are a lot of dumb Indian devs. But I've also had to deal with a lot of dumb American devs who think they are automatically superior to all Indian devs "just because". Plenty of those too.
(all this is just to counter your idea that people with 15 years of experience writing code don't exist here and "the software industry has only been there for the last 5-10 years" (roll eyes). Please educate yourself before making such emphatic (and false!) statements.
What I've noticed from working first-hand with outsourcing companies is that they promise degrees and accreditations that don't exist. They promise the developers working on your project will have 5-10 years experience, but for the most part you will get developers with 2-3. They promise masters level CompSci but you are lucky to get associates or trade school level. They promise systems and network engineers with MCSE or RHCE or CCIE but you are lucky to get MCP or CCNA.
I apologize for making blanket statements, but there is a lot of job hopping for qualified candidates in Bangalore (as I'm sure you are aware), so the outsourcing companies are usually offering those candidates that are new to the industry and have not had the time to generate sufficient experience and get a better job somewhere else. That is just the reality of what I have seen in my career.
Just saying, don't dismiss a country of a billion people so easily - with so many people, there have to be some smart ones.
Good engineers are a minority in every country. That said,the USA (and it is a great country) has the advantage of attracting smart people from all over the world to learn, work and settle there, so you have a constant influx of really smart people, an adavantage no other country has(these days, Canada and Australia maybe?). The US also has the finest universities in the world. So I am not surprised that in general, the US has the best tech companies and the best engineers.
But that doesn't mean there aren't good engineers elsewhere. I was only mildly pushing back against your somewhat sweeping generalizations. No insult or harm intended.
If the only Indian devs you've encountered are the lying incompetents exposed to you by the typical Bangalore bodyshop, I am not surprised if people draw conclusions that may not be very flattering.
I live in a third world country and I know what you mean. There are spectacular developers in Tunisia, but they are a tiny minority. So the point here. The % of developers that can do the work.
Yes, there are pretty impressive developers in my country. But what's their numbers and what are they doing now (either hired, working abroad or running their own businesses)? Are there a new and constant supply of good devs so you don't run out of them (considering you have the money)? Are they enough so that you company can scale when needed? Is there good sales people, managers, office assistants (because you don't only need developers for you business)? Is there a good infra-structure (Internet, Telecom, Importing stuff, Airports...)?
Factor all this and you'll find that third-world countries make no sense to run high yield businesses.
the post I replied to didn't make the nuanced argument you do. I am fairly anti outsourcing myself - in practice it results in ancient rotting codebases that people in the West don't want to maintain anymore landing up here and train a new bunch of third grade developers.
I mostly agree with what you say, but that wasn't the point made by the poster I responded to.
He(?) made a statement that India's software industry is only 10 years old (false) and condescendingly extrapolated that to say that therefore there aren't any senior devs in India with 15 years experience (also false).
I quote "what senior engineers in the Phillipines or India have 15+ years of software development experience. They don't exist, because the software industry has only been there for the last 5-10 years."
My post was only to refute his specific claims, and push back just a little bit on his condescending tone. No more,no less.
I made no claims about whether it makes economic sense to outsource to India (or Tunisia or wherever) or comparing India to Silcion Valley, or absolute measurements of number of good devs/square km or whatever.
I'd posit that it's not necessary to being a good programmer anyway.
To be a genuinely "senior developer | engineer | programmer" in the eyes of others it probably takes at least 15 to 20 years of experience building and running things. Not all of that needs to be professional - writing door games in high school counts.
I tried (well, was forced by management) to remotely lead an offshore team (in India). The project was quite complicated (storing, retrieving, and interpreting the results of a large quadratic programming model with millions of variables), and the programmers were paid $12/hr. The first pass was a disaster. I described the problem generally, and got nowhere. I then asked them to use a hashmap to store the results, and they responded ".NET doesn't have a hashmap." I explained that .NET must have some kind of data structure that would allow us to retrieve a variable's value based on it's name or some other lookup key, and that's the approach I recommended they take, though honestly, they're the ones spending hours on the code, so they were free to take an intelligent approach the problem and shouldn't feel obligated to take any approach I suggested, though I was happy to help. A week later, I got code based on arrays. They were iterating through one array to get the variable name's index, then looking it up in a different array. And doing this millions of times.
So you'd think I'd soured on offshoring, right? Not really, I'd soured on trying to find good programmers with a decent math background for $12/hr. We ended up hiring two people located in India, one with an MS and another with a PhD (both from good US universities). I think we paid an annualized rate of $65,000-$75,000 each, though I don't really remember, it was around that much. That was considerably less than we would have paid in the US, and they were good programmers - even better, I was able to describe a need rather than a solution, and they were definitely able to fill in the gaps and get it done.
So, could they "run circles around their American counterparts?" Well, that all depends on how you define counterparts. If you go by dollar-to-dollar, I'd say so - it's unlikely that you'd hire someone in the US who could do this for such a low salary (though plenty of grad students here do as "research assistants" it for a tenth that salary and a tuition waiver). If you go by salary percentile, I'd say no way. The guys we hired were good, but it'd be stupid to claim that they'd run circles around the top tier of US-based programmers. The top tier in the US is very very strong.
Overall, I'm not sure it was worth it, though I wouldn't claim it was a bad experience (like the $12/hr programmer experience, which was definitely a bad one). The company still had to pay me and other developers the higher salaries to oversee the work, converting us into "architects" who managed overseas teams - and I could have just written the damn code myself. We were considerably less agile, and our local people (including me) were less knowledgeable of the code base even though we were spending time reviewing. At the same time, it's hard to hire anyone with these skills, so if they're available overseas, I'd say it's a reasonable option.
Just whatever you do, don't fall into the trap that it will be "easy" to hire "top" developers for vastly lower salaries who will "run circles" around Americans. I do think that you can, with substantial effort, hire strong developers for somewhat lower salaries who will perform well, though you will (in my experience) incur enough overhead that it makes more sense to do this to access top talent than to save money.
Managing outsourced workers is expensive, and quite a hassle too. You will most certainly have to hold their hand much more than a native. Without significant oversight and hand holding, it's a recipe for disaster.
In most successful outsourcing scenarios, there is a dedicated team to manage the outsourced workers. For every one success story with outsourcing, there are 50 failed and frustrated attempts.