Ask HN: What's the current job market and sentiment like for outsourcing shops?

I'm a CTO of a Series A start-up with open dev roles posted. Right now, my inbox is completely overwhelmed with emails from outsourcing companies offering to do the work. So based on that data point, I'm guessing there is a lot of competition for general outsourced work right now.

Part of this might because a lot of new start-ups got into this space during 2020-2022 acting as a light middleman between overseas devs and US-based companies while not providing much besides facilitating payment. So you have all the traditional outsourcing companies fighting it out with all the newer companies in an economy where spending is way down overall.

All that being said, it seems like great experienced devs in Eastern Europe are still getting snapped up quickly.

I get the same emails. Everything you said makes sense. It's interesting to me that there seems to be little internal appetite for talented devs in those regions. It seems like they could create some really amazing software products if the domestic talent was put to good use and paid fairly.

I worked for an engineering services company that had a client in India. It made no sense to me: India is such a big hub for outsourcing talent at much lower cost, so why wouldn't they stay local?

It turned out that US engineering talent was considered to be higher caliber, and being able to say that their product was developed in the USA gave them more access to Indian investors.

Who'd a thunk it?

Same here

And we don't even have any job openings posted. We used to get applicants for non-existing openings in broken English straight from India... and now we get applicants for non-existing openings in ChatGTP English straight from India ^_^

My impression is that since mid 2022, there are A LOT of outsourcing companies who urgently need something to do.

> Right now, my inbox is completely overwhelmed with emails from outsourcing companies offering to do the work.

I'm getting dozens of emails and phone calls plus a few LinkedIn connection requests daily. It's a far, far, far greater number than I've seen anywhere in the past. I'm used to a few every week, not a near constant stream.

As someone who runs a niche dev shop in India (not the kind that you describe though), I have found that new work has been hard to come by since last 6 months, especially for services like ours that are on the premium end. Even the general consensus around my network is the same.

The Indian dev "market" was pretty much commoditized during the pandemic, which prompted us to move our focus away to niche that could still pay premium for high skills and outcomes. It seems that rest of the market hasn't changed much even in this time. I can't speak for the job seekers, but the number of job applicants applying to us have risen sharply over last 2 months or so.

That makes sense. Working with developers in India has always been frustrating to me. There is so much talent and potential there but it just gets drowned out by the noise of so many scams and low quality/effort grifters that it is hard to justify the time needed to find someone who can actually deliver. I am sure on your side it's frustrating as well trying to break through and be seen for the high quality work you do.

It is. It creates two "problems" - our quality and price both are directly compared to the other shops, and the quality part is not always immediately visible.

I'm curious to know what a "niche" dev shop is? Do you focus only on some industry vertical? Specific technology?

Well, we focus on building high-traffic/large-scale apps. The tech stack does not matter. Our skills are easier to demonstrate if customers have existing performance/design bottlenecks. Not something that other dev shops can claim to do easily.

Very interesting! I would have expected companies with high-traffic/large-scale apps have sufficient in-house expertise to solve for performance/design bottlenecks? Have you observed that isn't the case?

https://www.rmenpara.com is 404!

as someone interested on business what was that pivot like, moving to a specific technology? how did your icp change?

I'm a one-man shop, and it's been pretty hard.

Best work coming my way is always from non-tech companies. Companies whose core skills include tech pay very poorly, ask for a lot and come with the downside that youll be working on their current stack, so you get no choice over what tech to use

That's interesting to hear. I would have expected tech companies to come with more reasonable expectations/pay and better defined requirements. Best of luck to you and I hope things turn around soon.

On greenfield projects, even at the Fortune 500 level, there is almost always a greater concern about execution than stack. Especially for smaller projects. They care about results, not fine details behind the means of getting them.

The tech companies are more in tune with market rates on freelancing sites than non-tech companies, so they say "we need golang, postgres, Aws and some JavaScript" and they know what that costs.

The non-tech companies say "we have this problem we'd like solved". They aren't going to limit to market rates because your cost in their eyes is a percentage of the profit that results when you solve their problem.

When they look at your cost they look at it in terms of their business. When a tech company looks at your cost they compare it to the cheapest reliable person they can find on freelancing sites, typically between $30 and $50 per hour.

Should a one person developer shop be bringing their own stack to a client? Seems like a problem once you inevitably roll off the project.

At that point it's not his problem unless they're paying him for it to be.

I've had clients specifically ask for certain platforms (WordPress, Shopify, etc) but still assemble my own solutions regularly when it'll make me more productive up front.

This probably comes as a surprise to most people, but the clear majority of non-tech businesses don't have a stack because they don't have devs.

What they have is an immediate need for something, so it doesn't matter which stack is chosen.

In many cases they may say "can you fix this app the other contractor built", and then you will be using that stack only as far as that particular enhancement or fix.

They don't have git, or Jira, or ticketing systems, or code review or any of that.

It can happen in "techy" companies too, especially if they are heavily siloed. I've witnessed plenty of times when a department goes off on their own and brings in a solo contractor/small shop to create some random thing. Eventually it lands in the lap of the engineering teams who have to deal with the mess.

I'd like to pick up some freelance side work, do you have any recommendations? Websites to use etc? The few I've found for gig work has abysmally paying jobs for what I do.

> I'd like to pick up some freelance side work, do you have any recommendations? Websites to use etc? The few I've found for gig work has abysmally paying jobs for what I do.

All the work I am doing is for either people I've worked for before, or friends of those people.

I've looked at a few of the gig sites, but I am not prepared to take on tiny 1day work at $30/hour, and that is unfortunately the majority of the things I saw on those sites.

The best work to get is from non-tech companies; tech companies want lines of code delivered, non-tech companies want business value delivered. Guess which one is prepared to pay more for the same number of lines of code ...

Yup, it will be a problem for the poor sap(s) that will eventually be tasked with unraveling the layers of plop added by contractor after contractor. I don't fault the contractors necessarily but the companies that provide zero guidance or oversight. Source: have been that sap many times in my career.

I've upvoted you because I agree, broadly, with what you say.

The thing is, for many small to medium companies, they don't have a dev team in house. It doesn't make financial sense.

What sort of guidance do you expect the CTO to provide when his main technical capabilities is ensuring that procurement gets the correct spec laptops for employees, that the correct permissions are set for new employees on the microsoft accounts, that Teams works for everybody, that the support staff go on appropriate training for the software they use, that there is a migration strategy for the next version of Windows ...

That sort of person is not, and is not expected to be, qualified to code-review your PRs.

Even if they know how to use git, they won't have a git repo set up, and even if they somehow managed to do that, they won't have a clue how to use Jira or similar correctly, and even if they do know, they still won't be able to code-review properly.

This is why they'll pay more than what a tech company would - you'll be bringing more value to them, and they'll be trusting you much more than the average FAANG trusts their senior engineers.

may I ask how you find these companies?

I was in Google's partner org for 8 years and recently joined a cloud services company, but one that specialized in product engineering rather than "normal" system integration work. I've found that there's a glut of traditional SI partners, all of whom promise the latest & greatest tech, the most skilled technicians, and the highest CSAT. If you don't know the space, you'd be forgiven for assuming they're all roughly equivalent, but that's not remotely true.

There is a glut of outsourcing shops but there's also a wide gamut of specialization, and it can be difficult to choose the right partner for a given job. Some areas are far more commoditized than others (general cloud migration or general systems administration or general appdev, vs data analytics platforms for specific industry use cases, building regulatory compliant stuff, doing BPO in spaces that require deep domain knowledge, etc. I would never trust Accenture to do product engineering, and I would never trust [insert small generalist SI here] to do business strategy consulting. But even those aren't hard & fast rules.

Consulting and outsourcing shops exist for a reason, and those reasons aren't going away. The market is huge, and although there's been a dip over the past year with the Ukraine war and global macro-economic challenges, everyone expects things to recover and most of the big consultancies have been using this time to both "right size" and refocus to ensure they're ready to help companies of all sizes reach their growth ambitions.

I don’t think people have realised just how much of a knock on effect the drying up of funding is having.

I remember the dot com days. Companies that used to be spending stopped. All the “we’re selling the picks and shovels” and the outsourcing/body shop companies suddenly had no customers. It was horrible.

As a contractor, based in Berlin, I also noticed that since the end of last year the market slowed down.

My only pleasant experience outsourcing to India was a native Android app. I think it helped that the two (young) devs had grown up with smartphones.

The problem with india is that they have thousands of bootcamp/degree mills churning out 'software engineers', that they then try to sell as experienced seniors.

Then any given project is almost by necessity actually more than one 'programmer 'pretending to be that senior, and they are all often working multiple projects at the same time. It's a surprise that anything works at all.

It's the same people replying. They're just using chatgpt to make their replies more professional.

Some of them definitely used ChatGPT, I can see the signs of it. But that doesn't explain why I received 100s of applications this time around vs maybe a dozen or so before.

Maybe instead of sending you one email they hand wrote, they send you 20 emails from ChatGPT from different email accounts to increase their odds of winning the bid?

Could be but it doesn't really need to be the case. Everyone can send many times more customized applications per unit of time, perhaps so quickly that its not worth much consideration of an offer before it is ready to send.

Perhaps because the cost of tailoring an application for your needs has dropped to zero?

Hi. Would you mind to elaborate on which signs of ChatGPT you have detected? Not only out of curiosity: I've read that detectors are more prone to emit false-positives when analyzing text written by foreigners and, since that's my case, I'd like to learn how to avoid planting such signs into my own writings.

I wonder if ChatGPT has resulted in less demand for basic web dev services.

It has not. It’s way to early to see any market affects from chat gpt.

Not sure about web dev but many of the applications I received from freelancers this time around had obvious signs of ChatGPT use in them.

What are obvious signs?

The perfect royal queen english with too much useless fluff

And it's a bummer for those of us who do actually speak or write in royal queen english.

Is King now, yea?

GitHub copilot was first released 2 years ago

ChatGPT != GitHub copilot.

Also I don't think copilot has reduced the demand for dev services.

I'm not saying it reduced the demand, I'm saying it increased the supply.