[sisisbdhc]

Our company just let go of all our remote LATAM hires. We paid high end in their LCOL areas.

They were somewhere between ok and not good. Felt like we got about what we paid for - their cost was about 50% of a US dev. They were as productive as a low end US dev, so in some cases ok value but since hiring low performers tends to hurt a team overall they weren’t worth it.

We’re a mid range company (decent cash comp, not much else since startup). I’m sure if you’re paying more you can do better. But that’s how it’s always been hasn’t it?

[DanielHB]

As a Brazilian dev living in Europe, one thing people just don't get about offshoring is that good devs have options, even in poorer countries. Companies offshoring usually offshore crappy projects, crappy projects attract bad talent.

Also really top devs (at least in Brazil) can make more than 50k USD per year (fluctuates widely based on exchange rates) at Brazilian companies, it is cheaper than US but the tail-end of talent can still be expensive.

If you really want to attract good devs in cheaper areas the best way is to just open a branch of your office there, pay top-salary and don't just use it a dump ground for the projects no one at home wants to take. So treat them the same as at home. I had a roommate who worked in one of those companies that take offshoring projects, lets just say it is not the best talent pool and the good devs there leave fast.

[apwell23]

i think they over estimate how many 'good devs' are there not that good devs have options.

[roncesvalles]

>Felt like we got about what we paid for

This is the usual ebb and flow of offshoring in the tech industry that's been going on since the 90s.

There has never been a scalable arbitrage for tech talent by going over to another geo, and there won't be one in the foreseeable future. What US HCoL talent gets paid is unfortunately the fair and natural market rate for that caliber of talent, at least if you need to hire more than like 10 people.

[fhd2]

It's quite simple market forces, from where I stand.

Companies in high income areas have two options for outsourcing:

1. Just go for the cheapest salary, quantity over quality style.

2. Find a replacement that has a comparable level of skill, experience and knowledge to the local talent they have or would need.

Now for (1), there is almost no floor. You can get devs for five bucks an hour. For some people, it's the only way they can make any money, so they take it.

For (2), people will gravitate towards earning 10-30 % less than a local equivalent developer. Low prices drive up demand, and since there isn't that much supply of strong candidates, that drives up their fees. At the same time, the employer pays a bit of a tax in terms of time zone, proximity and cultural differences, which introduces overhead, so it can't quite reach the local salaries. But it can get pretty close.

A lot of the outsourcing horror stories are (1). A lot of the actual success with outsourcing is, in my experience, (2).

I believe (1) is primarily responsible for these ebbs and flows you mention. The feedback loop for software development (in terms of whether it pays off economically) are _long_. That seems to force history to repeat all the time, because decision makers rarely see the consequences of their actions. The incoming generation of leadership did though. And then the generation after that didn't.

[torginus]

I can raise two points to disprove this - I'm East Euro, but have worked with people from all over the globe in all kinds of companies.

First, my experience with devs at mid level companies is that the average dev ranges from competent (as in, can work within an existing framework to accomplish tasks), to incompetent (cannot do the same consistently), with there being a top 10-20% who are truly good (able to deliver complex high quality software from a blank sheet, capable of working on complex existing systems meaningfully etc.). This applies to all companies (including ones in the US).

Second, at high level companies, there's lots of European talent (usually in West Europe) - these people are as good as their US peers (by definition, and usually has been my experience), but make less than what you would take home in a mid level US company.

[jltsiren]

You don't get paid for talent, or education, or responsibility, or any other reason that could be plausibly presented as fair. You get paid for friction: how easy it would be to replace you, and how much harm it would cause if a good enough replacement cannot be found. On the average, as individual circumstances vary.

There is friction in turning fresh graduates into experienced developers. There is friction in hiring people in a region where you are not operating already. There is friction in using additional middlemen. There is friction in learning to do business in a new situation or in a new culture. But the friction can be overcome – in the long term and when the scale is large enough.

[commandlinefan]

> US HCoL talent gets paid

In no small part because if you look at that talent you’ll notice that… they’re mostly not natives to those areas. i.e. the highly paid in San Francisco are mostly immigrants from LCOL countries. Generous immigration policies ensure it. If immigration policies do change, you might start to find tech top talent in other geos but for the most part the people they really wanted to outsource to in the first place have already moved next door.

[dreghgh]

EPAM systems employs 65,000 people and has revenues of $5bn a year.

[acdha]

> I’m sure if you’re paying more you can do better. But that’s how it’s always been hasn’t it?

I’ve been hearing about outsourcing destroying jobs since the 90s and that’s how it’s always gone: the suits salivated at the prospect of cutting wages by, say, 90% and had total write-offs because of it, because they missed that even in a poor country people have options and anyone smart enough to be a good developer is also smart enough to recognize that their skills are worth more. Outsourcing has some big costs related to communications so while you could find decent people at 50-70% of local labor rates, coordination overhead makes that a net loss even before you hit things like the security risks.

Part of the problem there is that the business people really want to think that they understand their business so well that they can give perfect instructions, and it takes a certain humility to recognize that more time goes into knowledge transfer and discovering the true needs than might be obvious.

[jbreckmckye]

Always has been, especially since countries opened up their work visas.

There are great engineers around the world but why would they accept ten beans an hour if they can take a plane to a different country and earn fifty?

The talent from LATAM are not just sitting in the rainforest waiting for your phonecall.

[polishdude20]

Y'all hiring in NA? I'm a Senior dev looking for a role!

[esaym]

lol was going to ask the same

[astone26]

Interesting… 50% of US dev cost is like what if you don’t mind saying? 100k? I found the biggest issue with these engagements is the trust with remote developers.

[esaym]

I would think $40k-$50k