Move over, remote jobs. CEOs say borderless talent is the future of tech work | Hacker News Reader

Move over, remote jobs. CEOs say borderless talent is the future of tech work

cnbc.com

24 pointspaulpauper49 comments

They've been trying this my entire lifetime. I was warned away from tech because of offshoring in my early teens.

Sometimes it works out. It usually doesn't. Heck, my last company swung back and forth on it twice in the 10 years I was there.

I do think quality exists everywhere in the world. But when you go fishing for cheap, which is usually the reason for seeking it in the first place, you're never going to find it.

It's not offshoring in the same way as it was 20 years ago. They are remote employees, they go through the same hiring process as everyone else but at 50% the price. And remote work is much, much more accessible.

Remote workers located in HCOL areas of US and Europe have shot themselves in the foot. I see it especially in the market for native mobile development in Western Europe. Salaries decreasing, freelance rates dropping. There is plenty of work, but positions are filled with workers living in the South or East.

As hiring manager, if I'm going to hire someone who works remote, I will pick the person with the same skillset and experience at half the cost.

Timezones still play a huge part here as well. My team has several engineers who are at par compared to the rest of the team but they're a pain to work with due to a 10 Hour time difference.They may be paid 50% less but they're 50% harder to work with to no real fault of their own

Engineers in LATAM are increasingly popular for that reason; the timezone difference is about four hours from PST and about one hour from EST.

> Engineers in LATAM are increasingly popular

It's because of the tax holiday Costa Rica is giving [0][1][2], and VMWare's acquisition by Broadcom (they had a massive engineering campus in San Jose, Costa Rica) leaving a lot of Support Engineers and C++ Engineers on the market.

Czechia, Romania, and Poland did the same thing in the 2010s, Israel and India in the 2000s, and Taiwan and South Korea (in electronics) in the 1990s.

[0] - https://www.thegreenparkfz.com/

[1] - https://afz.cr/v5/en_us/about-us/

[2] - https://www.procomer.com/wp-content/uploads/Guia-Zonas-Franc...

50% of the price is quite nieve It’s much less than that. No health care no benefits no pension. No employer side costs, currency conversion to your advantage. 15-20 % is the number that makes it worth it. Bell Canada achieved under 10% in the early 00’s offshoring support to India

50% is often the number talked about in public while its much higher in reality as you are saying.

Numbers I work with are ~45k for a senior software engineer in Hungary, Spain, Italy, Greece vs ~85k in France, Germany, the Netherlands. Fully loaded cost (tax, insurance) adds about 20-30% on top in West. South and East are considerably less.

You can find even cheaper staff but you're still competing for talent. I can pay someone in South or East a premium against their market and still save big compared to an average salary in West.

This is ignoring any other benefits you have as employer in South and East. Try to fire or lay someone off in France - it'll cost you.

I think your numbers for France are off. When I tried to hire there last year the burden of employer taxes and levies was ~70%.

That wasn’t the part that killed the deal though. My employer’s real worry was around how hard they believe it to be to fire someone who isn’t doing well in France.

Saw Suncor try the offshore to India on their major app around 2014. Commit history a few years later barely changed.

The benefit of living in a HCOL area isn't just salary. If you own property you've been getting huge gains in value.

That's a loophole, though, hopefully it'll close in my lifetime

> But when you go fishing for cheap, which is usually the reason for seeking it in the first place, you're never going to find it

That's the thing - employers aren't paying peanuts abroad anymore either.

Just take a look at YC salaries in India, Czechia, or China (the level of talent that FAANG in those countries would hire at).

Base salary plus bonus is at most 50% less than in the US, so factoring taxes and legal fees you save at best 40%, which isn't significant in an industry with 80-90% profit margins.

It's literally about talent at the end of the day - it's just easier to scale out entirely new teams to speed up delivering multiple features at once.

If you pay peanuts, then software is just a cost center for you (and for most industries, it is)

A company I worked for had a lot of Ukrainian developers (who were mostly pretty good) and well, that had a tragic outcome. That kind of thing is a risk no one saw coming.

Ugh, what a load of garbage. Is paying American salaries for your developers really that expensive? You'd think CEOs wouldn't want to cheap out on the very people that make their business possible.

I gotta say, "borderless talent" is a nice spin on "cutting American jobs and sending that money overseas". Wonder if we'll start hearing it more, or if it was coined for this article.

Someone should be keeping track of all the new and changed phrases/terms to the language in recent years. Yes, languages change over time. But it's been accelerated over the last decade with ideologues intentionally adding to and changing the language on a frequent basis as needed to better support their viewpoints.

I use it as a major tell for whether to trust a source or not; if they're using what's effectively actual newspeak, phrases and terms that were invented recently for ideological reasons, I know not to put any trust in them.

It’s not about cost per se but competitive cost. If your business’s direct completion can ship the same product 3x cheaper then your business is toast holding other things constant

It isn't about the "financial cost" from a competitive standpoint - it's about scalability.

Costs savings are usually around 20-40% of what you would spend in the US, so not that significant in an industry with 80-90% profit margins baked in.

The real value comes from being able to scale out and add additional teams to speed up delivery of features.

This is the double edged sword of 100% remote work - if you devalue in-person relationships, then there's no reason to value a local talent pool.

the future will be some hub and spokes model to address your concern where core infra is on shore but less critical teams and back office is distributed. Btw this has been already been happening but might go from 30% penetration to 80% penetration

> where core infra is on shore but less critical teams and back office is distributed

Nowadays, even core infra and IP is being developed and PMed abroad depending on the segment of the tech industry you work in.

Much of the cybersecurity industry is notable in this regard, and a lot of the newish (2015 and later) startups in Enterprise SaaS have adopted this kind of a model organically by treating all employees globally equally after a fair CoL adjustment

Google Pay and Google Drive+Docs are notable product lines that was almost entirely developed by engineering abroad.

What about paying American salaries to talent in other countries? A wider talent pool is good for everyone, because in the long term it means the best developers can demand more. Top talent doesn’t negotiate based on their cost of living.

American CEOs do not care about anything but money, they'll hire remote international as soon as the market says it's in their financial interest

So true. Brainless leadership at the wheel.

80% of my engineering department was off shored and the results are exactly what you’d expect.

Anything to drive down labor costs and try to keep people in fear.

> "Borderless hiring"

> "Value-driven efficiency"

> "Global time zone delineation"

> "Value chain"

> "Globalized opportunity"

> "Decentralized tech talent platform"

> "Asynchronous workforce"

> "Future-of-work philosophy"

> "Altruistic potential"

> "Growth playbook"

all just sounds like grade A bullshit to me. off-shoring is nothing new. still has same issues it always did.

although much dev work has become very commodified and saturated so the demographic reality is that it's very hard to find a job, and most jobs dont pay well and hiring has become extremely arrogant and choosy.

If it ever ends up being a distributed team (like we have offices in different cities in the US where the same or unique functions are provided to the whole company), it might be a different thing.

So its the 2000s all over again

Do CEOs ever learn their lessons?

It's not like they care. Anything that appeases Wall Street is good, that's pretty much all that a CEO cares about.

Can’t forget that all of our retirement is invested in ensuring this number only goes up, too. Even when it goes against our interests.

Millenials and Gen Z plan to retire? :O

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CEOs love borderless talent until they realize that it exposes them to borderless corporate income taxation...

This isn't like the old days when Apple and Microsoft could exploit international tax loopholes. Those loopholes are gone, and transfer pricing (aka mandatory profit for related-party cross-board transactions) is now mandatory. In some countries, there are proposals to to tax transfer pricing income even if the entity as a whole is not profitable, and this is on the table for the next OECD guidelines. Countries are also no longer willing to accept the ridiculous under-valuations of migrated or licensed IP that Apple and Microsoft got away with.

Not a lot of work on this, as far as I can see.

One of the few I found:

GLICK, P., CONSTANT, L., EDOCHIE, I., & NATARAJ, S. (2020). Online Outsourcing.

It looks like the (really) rosy scenario that the article paints may only be viable if:

1) There are highly skilled workers with good English skills on the supply side. 2) Companies are convinced that it could actually work on the demand side.

The article makes a lot of recommendations for how it could work, but doesn't see it working in their study. And the CNBC article is light on citations. So probably just clickbait.

Rebranding "remote" to "new phrase" will not make anyone forgive you for writing "remote" on job roles that are obsessed with sitting in an office. It's not a clever hiring hack, it just broadcasts that you like operating fraudulently.

Borys is in Ukraine, he can't understand Pablo, who is in Brazil. Pablo has trouble understanding Yosef, who is in Israel. Yosef has trouble understanding Jack, who is in California. Jack has trouble understanding Borys.

I'm sure they'll make a quality product!

I was a PM for a team like that. We did well - ended up making a 8-9 figure product line.

Most of us can speak English, and Engineering fundamentals like algorithmic complexity are the same all over the world.

Just pay in the 70-90th percentile in a region, force engineers to write design docs and PMs PRFAQs, make sure to have a quarterly touchpoint in person, and you'll get fairly proficient talent.

This is how the market is now that Eastern Europe, Israel, India, Costa Rica, etc all have self sustaining tech ecosystems now.

Evolve or perish if you want to keep your career.

Lucky you! Most people haven't had that experience. Everyone being able to speak English, everyone knowing algorithmic complexity, that's just damning with faint praise. I suppose if everyone paid 90th percentile salaries, and imposed the overhead of a PM org powerful enough to wrangle the various offices into shape, it would work fine. But it might still be inferior to the one-product-per-office model.

Really the bottom line is H1B and other USA visas need to stop being awarded to tech workers tomorrow because you can ship a laptop and a starlink terminal anywhere.

The skillset doesn't exist in many of the countries importing the talent, so the companies might as well setup shop closer to employees.

Not really, working together for certain parts of it, as well as mobility is still important.

Lots of people interested in pulling the ladder. Fearing competition, are we?

Ban non-compete. Impose steep taxes on companies earning American profits with less than 95% American labor.

Borderless hiring? When did the word Remote not cover that?

If offshoring worked, it would have worked the first time.

The largest filter, the Great Filter, these companies cannot overcome is a true digital native workforce and communication mechanism. When your days are haraunged by voice/video meetings because people don’t know how to work asynchronously, productivity plummets when timezone differences are introduced. An absolute shitshow to behold.

Very few, relatively speaking, tech teams understand how to leverage asynchronous work patterns. I think open source projects which are dominated by 40 year old virgin neckbeards (those still exist right?) show the silver lining, but alas, nobody will get it.

Round the merry go round we go again.

Wait till they relearn how timezones will slow everything to a crawl

They'll make you return to office after forcing you to work remote, just long enough to find a foreigner to take your job oversees.

Capitalism. Check mate.

And yet at the same time, most US companies are hiring only "Remote within US/Canada" ..

Claim to be hiring. I'm not convinced most postings are legitimate.

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