Why I Haven’t Hired a Single Developer in Canada
techvibes.com
techvibes.com
It benefits our community and our country, but it also means that we're getting the best possible talent, locally, without the overhead of managing and communicating with remote non-native speakers.
The author simply wanted higher margins, and achieved them by externalizing costs onto their community. That's not to say that such a thing can't be successful; look at WalMart.
However, it's fallacious to state that they couldn't have built their business otherwise.
Lastly, it was this line that really got my goat:
> At the time of launch, I wasn’t even making that much, so I could I justify paying someone more than I was making myself as a business owner? It was a hard pill to swallow.
You, the business owner, have all the upside. That's how you justify it.
Um, who's really creating the silly false dichotomy here? I'm based on the east coast (US), I run a (very) small development shop, and I work with contractors all over the world, including some locally. I prefer to work with contractors rather than hire employees for the same reasons the author prefers to hire remotely instead of locally: employees have much higher maintenance costs.
However, I hire based on experience in relevant Open Source communities, not on hourly rates. I have never, ever negotiated with anyone over their rate. I ask them how much they want to make, and that's how much I pay them as their base. I love paying my contractors higher rates and bonuses.
> However, it's fallacious to state that they couldn't have built their business otherwise.
This is complete guesswork at best. You have no idea what this person's situation is. Further, one could probably infer from this comment that you've never had kids or a mortgage.
> You, the business owner, have all the upside. That's how you justify it.
This is exactly as it should be! As a business owner, I also have all the risk. Whether or not a client decides to pay me (on time or at all), I'm bound by the terms I agreed to with my contractors to make sure their cheques show up, no matter what. This risk/reward balance exists in every employer/employee relationship. I fail to see how it's a problem.
Just because company X worked one way doesn't mean company Y will.
Telling phrases:
1) "But I didn’t want to be constantly worrying about financing, loans or diluting my shares by raising funding to stay afloat. "
That's nice, if you can't have 100% of everything it's not worth it. Tell that to every other small business owner. jackass.
2) "Finding the right talent in Canada wasn’t difficult. That’s right, it was easy to find. Talent was plentiful. There were extremely intelligent and capable developers. But the price tag that came along with their talents made me wonder how I would even stay in business."
Huh, so you don't want to take in seed money, but you can't afford talent (that you were able to source without much work).
3) "Our first projects involved building on new technologies: mobile and Facebook apps. At the time, there were only a handful of us in Canada that could do this kind of work."
You built "mobile" and facebook apps and thought you were special and unique? Bullshit.
I worked for a guy like this - it was the worst 5 months of my career. I asked for $55k, he talked me down to $49k suggesting my experience was weak. Was out performing every other developer in the shop (including the CTO) within a month. Asked for a raise and got laughed at. Left that company shortly thereafter and landed a "low paying" job at a local startup - this move ended up giving me a $10,000 raise + stock options. Meanwhile the asshat I worked for before has had his company collapse as he tried off shoring to bargin bin shops in India and Mexico. I would be sympathetic if the guy wasn't such a sales oriented jerkoff.
While I disparage the whole "marketing" side of things, I don't necessarily discount it. A good marketer or sales person can add immense value to a business and can source and provide connections that prove to be make or break. Just the same as that rare engineer who is capable of solving that one critical technical puzzle that makes the business work.
I just happen to think that the popular model of some business graduate having an "idea" and finding developers to build it for him is lame - that shouldn't be the norm. Developers are the builders, they just need help coming up with the business framework to make a living around what they build.
Also I'm not trying to be insulting but since when is Facebook marketing equivalent to building "cutting edge platforms".
If he can get a SMARTER, MORE EXPERIENCED, CHEAPER developer in Argentina, why on earth would he hire a Canadian developer?
He said there was talent in Canada at (at least) 4x that cost.
I know many people who have been in that range within a couple of years of graduation - not senior by any means. $75K for someone with a light sprinkling of experience is the market, at least in major urbans like Toronto.
I also suspect many employers have this preference partly because they are more comfortable working with people of their own background, culture, and class. I don't think that is an attitude anyone has a moral obligation to encourage.
Four years ago my intern went to Amazon after graduation for $86k and his degree was from SFSU, which is not a CS powerhouse. I believe entry level salaries have gotten higher since then...
Outsourcing is nothing new and I am completely aware of the effect it is having on the software industry here in Canada and in the US. The author could just assume responsibility for his business strategy and not try to put the blame on CS/Software Eng. grads who often rack up solid amounts of debt to put themselves through school.
"When I first put up a few job postings for a senior developer position, the salary expectations for almost every applicant was $75,000 and up. Some of which were fresh grads with no significant experience."
Competent senior developers are few and far between, and command market rates well above $75k, depending on location. Compared to many cities in the US, there's an argument to be made that Canadian software developers are generally underpaid.
This strategy has been talked about for, ummm, 20 years now? Yet, it's still not reproducible and scalable in every situation. Does it work? Yes. Does it fail? Yes. Does it work better than the latter model he mentions? It can. Does it reduce your risk? No. Can it reduce your risk? Yes.
Both models the author notes can be successful and you normally you'll get what you pay for.
He doesn't elaborate, but I suspect that when he says "Europe," he isn't talking about London, Paris, or Berlin.
Since their website mentions Sofia, I'm going to guess Bulgaria.
Seems cheap enough to me, even if it doubles.
Outsourcing helps spread the monies. Without outsourcing, many cs guys in argentina would never work for a tech company. Without outsourcing many wouldn't get a cs degree in the first place. With outsourcing third worlders get better salaries. This creates local competition and an eventual increase in the baseline salaries for cs guys in that third world country. North american companies then move on to a different third world country say india. Salaries there rise too. Then they move on to vietnam, bangla desh and so on. Eventually baseline salaries everywhere becomes the same and outsourcing stops making sense.
Benefits whom?: third world country and the company
Negatively affects: north american cs grads. They will have to wait till everyone in the world is getting the same salary.
So according to my calculations, let outsourcing be for the next 500 or so years and the world will appreciate your sacrifice. Till then think of starting companies because the company and third worlders will benefit.
Believing this helps me sleep at night.
"A Facebook Preferred Marketing Developer. " "Global Managing Director of Majestic Media, Canada's first Facebook Marketing & Technology agency. His extensive experience on the Facebook platform includes building out social strategy, campaign ideation, app architecture and social design"
I really want to punch this asshole in the face.
There is an ugly sort of nationalism and entitlement under a lot of the comments. The concept of being entitled to a job because of where you are born is insane.
(Yes, this is sarcasm.)
The vitriol here on HN against the fact of a globalized free market is somewhat surprising, especially considering that the successful startups will inevitably be competing globally.
Again, there is just no particular reason why anyone should expect him to hire Canadians simply because he presently lives in Canada. If he makes a profit on this venture, he will pay Canadian taxes, right?
I would feel "hurt" -- but that doesn't mean I have a right to the job. Anymore than if you are "hurt" when you boyfriend/girlfriend dumps you... it doesn't mean you get to keep dating, it just hurts.
I would actually place the local staffing at an order of magnitude more valuable to the local economy than the direct positive cash flow into the business coffers, but I'll admit it's subjective. To me, it's the difference between a ghost-town and a self-supporting economy that can thrive because it can stand short-term unemployment.
Sometimes that's the only choice (steal the loaf of bread or starve), but when everyone does it, the effect is not sustainable and he attempts to justify it for hollow reasons.
Furthermore, developers in Argentina are worth as much as their Canadian counterparts, but for whatever reason, they undervalue themselves to the tune of 1/5 and the employer's eagerness to jump on that reeks of exploitation as much as stinginess, adding insult to injury.
I don't know enough to claim he's breaking the law, but (spoken in reference to the recent RBC stuff): "'The rules are very clear. You cannot displace Canadians to hire people from abroad,' said Immigration Minister Jason Kenney." ( http://www.cbc.ca/hamilton/news/story/2013/04/05/bc-rbc-fore... )
The commenters aren't buying it.
From my experience it seems really hard to get good talent overseas. And if you do find good talent, they usually want almost as much a good local talent.
It works, because we have good managers who pay attention to making it work. Good managers who are not looking for shortcuts and who encourage all developers in the company to be self-driven professionals who provide value to the business.
This is how to make remote teams work. Sofware craftsmanship etc.
> herp derp derp outsourcing.
The salary of software developers in Canada is also substantially lower than the US. A $70k developer salary in Canada is approximate to a $90-100k salary in New York, Silicon Valley.
Not sure what the purpose of that article was, since a lot of us are building tech companies, not outsourcing agencies.. I guess this is why I don't read techvibes.
Exploitation of depressed markets is a viable option, but it's not the right option.
The OP couldn't find a way to build a profitable business (edit: profitable enough for them) with developers commanding a Canadian salary, but was able to with developers commanding a lower one.
In comparison, I work for a small company that's been profitable from pretty much day one and they pay the prevailing rate for developers in San Francisco, which is roughly double the Canadian salary the OP is bemoaning.
I'm sure there are some businesses that would fail even at the rate the OP is paying. Think of all the opportunities that would open up if we could pay developers $1/hour.
Not much new here. And I don`t think their early hiring strategy was all that smart. Canada is full of experienced developers and when a new technology comes along, there are hige numbers of people with enough experience to master it in a month, who would even be willing to work for a bit less in order to get up to speed on the new technology. They are unlikely to be senior developers who have invested themselves in ONLY taking high paying jobs where they can put their expertise to work on day one. But none of this is specific to Canada.
And, in fact, I don't really believe that this company's success has much to do with lower wages. The fact that they made remote development teams work demonstrates that they pay attention to details and that is what breeds success.
1. The ROI is all that matters. Perhaps he should try hiring one of these more costly developers, it may pay off.
2. There is a global market for good developers, which means a good developer in X developing nation can charge as much as a good developer in N. America. However, you can get a crap developer far cheaper in developing nations! ;)
3. That same global market is why the recent grad can ask for 75K. If he were applying for MdD's, then he wouldn't be asking that.
Discussing the LONG TERM effects are always the most constructive.
The company I work for does this to a degree, but their emphasis is always hiring locally.
My God, the irony, I can... taste it.