Tech Industry Warns That More Remote-Work Jobs Are Headed Out of U.S.(wsj.com)
wsj.com
Tech Industry Warns That More Remote-Work Jobs Are Headed Out of U.S.
https://www.wsj.com/articles/tech-industry-warns-that-more-remote-work-jobs-are-headed-out-of-u-s-11652175000
101 comments
Agreed, wake me up when cheap outsourced developers actually works out. I've yet to see it. I have nothing against foreign developers but most of the outsourcing shops I've had the displeasure of working with are 0.2-0.5X developers at "only" 0.6+X of the cost. I know there are developers in other countries that can run circles around me but they aren't working for pennies. Also this mindset completely disregards things like timezones, language barriers, and understanding/relating to your customers.
Every experience I've had with "let's save money by using this outsourcing firm" has been terrible and a complete failure, even if it took the execs years before they would admit it and reverse course. Sure, for a few years you can coast on what the developers you laid off/fired built but cracks will start to show and you can't just slot in developers like RAM sticks. It takes time to fully understand any system but execs are so shortsighted and oblivious to gross hacks being done to get something to work. It only takes a few years of outsourced code management before it turns into a house of cards. Hell, most software already is somewhat of a house of cards, if you bring in people that do not care about anything but billable hours they aren't even going to maintain the current mess, they will do the easy thing every time until your software is completely unmanageable.
Every experience I've had with "let's save money by using this outsourcing firm" has been terrible and a complete failure, even if it took the execs years before they would admit it and reverse course. Sure, for a few years you can coast on what the developers you laid off/fired built but cracks will start to show and you can't just slot in developers like RAM sticks. It takes time to fully understand any system but execs are so shortsighted and oblivious to gross hacks being done to get something to work. It only takes a few years of outsourced code management before it turns into a house of cards. Hell, most software already is somewhat of a house of cards, if you bring in people that do not care about anything but billable hours they aren't even going to maintain the current mess, they will do the easy thing every time until your software is completely unmanageable.
"wake me up when cheap outsourced developers actually works out. "
You're missing the point here.
They're not going to be hiring from 'body shops' they're just going to be hiring people 'remote' - just like you.
Why do you think that you in 'Small Town Ohio' are going to get hired over the guy in France at 80 cents on the dollar, or Poland 60 cents on the dollar, when they have decent language skills.
You're going to find out quickly that 'core education' in a lot of countries is as high, if not higher than US.
Brazil has iffy educational standards but their upper 1/3 get a good education, and India the ratio is worse but population higher.
The number of good devs. from China is blowing up.
US is 5% of the world's population, and educational standards vary.
It's a big world and Google etc. have no 'loyalty' to America.
You're missing the point here.
They're not going to be hiring from 'body shops' they're just going to be hiring people 'remote' - just like you.
Why do you think that you in 'Small Town Ohio' are going to get hired over the guy in France at 80 cents on the dollar, or Poland 60 cents on the dollar, when they have decent language skills.
You're going to find out quickly that 'core education' in a lot of countries is as high, if not higher than US.
Brazil has iffy educational standards but their upper 1/3 get a good education, and India the ratio is worse but population higher.
The number of good devs. from China is blowing up.
US is 5% of the world's population, and educational standards vary.
It's a big world and Google etc. have no 'loyalty' to America.
You are assuming remote people are OK with being second or third class employees. I'm not sure how long this is going to be true in the post covid world.
https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...
https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...
? Nothing I said about that assumed those employees would accept being 'second or third class employees'.
They're going to be 'employees'.
Now - they will be paid less - yes (maybe that's what you meant?)
But that's a function of supply and demand.
They will absolutely accept 'less' because it's where they sit on the supply/demand curve.
They're going to be 'employees'.
Now - they will be paid less - yes (maybe that's what you meant?)
But that's a function of supply and demand.
They will absolutely accept 'less' because it's where they sit on the supply/demand curve.
Discrimination is not a function of supply and demand, it is a function of lack of legal protection. One can argue underleveraged groups does not deserve equal treatment unless they can overpower their situation, but personally I disagree with that opinion. I also totally understand if someone feels their salary is under threat and does not want to treat others fairly due to that. To be completely honest, there is a nonzero chance I would do the same if I was on the good end of the deal as well.
I'm not holding my breath over the situation changing in the near future, but 2 years of remote work do make people reconsider things.
I'm not holding my breath over the situation changing in the near future, but 2 years of remote work do make people reconsider things.
Your ideas are mixed up here.
Companies are not 'discriminating' against people in other countries due to 'lack of legal protection'. They are just hiring people in other countries, and paying them what they are worth.
That's it.
It's 100% supply and demand.
There are good and bad developers everywhere, and cost of living and opportunities are different everywhere.
Supply and Demand will work itself out.
Companies are not 'discriminating' against people in other countries due to 'lack of legal protection'. They are just hiring people in other countries, and paying them what they are worth.
That's it.
It's 100% supply and demand.
There are good and bad developers everywhere, and cost of living and opportunities are different everywhere.
Supply and Demand will work itself out.
Do you think pay gaps exist in general or all compensation is fair and square because of supply and demand fixes everything?
A compensation gap only matters if it also leads to a gap in living standards. Tech salaries in the US are fairly homogenous with respect to cost of living; a developer in Ohio making an Ohio-adjusted salary would be able to afford similar things as a developer in the Bay Area making a Bay Area salary. (In fact, I'd bet that the Ohioan would be able to afford a much nicer house; CoL does not scale uniformly across goods and services with respect to location.)
However, tech salaries in the US are much higher than tech salaries in Europe even after adjusting for cost-of-living. That is what leads to resentment: a developer in London making a London salary would not be able to afford the same things as a developer in New York making a New York salary.
However, tech salaries in the US are much higher than tech salaries in Europe even after adjusting for cost-of-living. That is what leads to resentment: a developer in London making a London salary would not be able to afford the same things as a developer in New York making a New York salary.
At some point you end up shitting your own bed with this behavior. Development will cease to be lucrative if this plays out, so now you have a deficient technical knowledge base in America and a deficient manufacturing base? What exactly is America's future here? I really don't think you can be deficient in both or there is nothing left but pure balls.
> What exactly is America's future here? I really don't think you can be deficient in both or there is nothing left but pure balls.
Shithole country that can't do shit, with a capitalist upper-class that's rich enough to insulate themselves from the shithole aspects. It's the libertarian utopia we've all dreamed about.
It will last until the foreign societies cease to recognize the American upper-class's paper ownership interests.
Shithole country that can't do shit, with a capitalist upper-class that's rich enough to insulate themselves from the shithole aspects. It's the libertarian utopia we've all dreamed about.
It will last until the foreign societies cease to recognize the American upper-class's paper ownership interests.
That's why you have to get out as soon as you can. The money in being a code monkey in the West is on borrowed time. The tried and true money is in management. Managing people always pays well.
How is the management class supposed to manage technical work they ultimately grow out of touch with? An individual isn't going to be able to project power across an ocean, so why do they need you in particular? Sounds like a race to the bottom as far as the notion of becoming a manager to outsourced labor, I'm doubtful there is enough management work to absorb an influx of former ICs.
> Agreed, wake me up when cheap outsourced developers actually works out.
This actually happens quite a lot in my West-European country. Companies that aren't too picky about language knowledge can get cheap(er) Eastern European developers to do a lot of work. It works out well for the company. I'm one of the last expensive local developers, so I work with them quite often.
These developers are well-educated and very capable. They are in the same or an adjacent timezone, so there's no issue there. They have little to no knowledge of my local language, but that's not a big issue for us because we do most of our work in English anyway. There is no daily/weekly face to face interaction of course, but with WFH that doesn't happen with local developers either. There are just no insurmountable problems with nearshoring anymore. And since you can easily save 30-50% on a developer's salary by doing so...
This actually happens quite a lot in my West-European country. Companies that aren't too picky about language knowledge can get cheap(er) Eastern European developers to do a lot of work. It works out well for the company. I'm one of the last expensive local developers, so I work with them quite often.
These developers are well-educated and very capable. They are in the same or an adjacent timezone, so there's no issue there. They have little to no knowledge of my local language, but that's not a big issue for us because we do most of our work in English anyway. There is no daily/weekly face to face interaction of course, but with WFH that doesn't happen with local developers either. There are just no insurmountable problems with nearshoring anymore. And since you can easily save 30-50% on a developer's salary by doing so...
Agreed, before the war I worked with an outsourced team in Ukraine, and I was blown away with the quality of their work and the professionalism of all the devs I talked to in that shop.
That being said, I'm not worried about outsourcing. I believe I bring enough value to the table to withstand those pressures, even if eventually I have to take a wage hit to compete.
That being said, I'm not worried about outsourcing. I believe I bring enough value to the table to withstand those pressures, even if eventually I have to take a wage hit to compete.
Consulting does work a lot with outsourcing, it doesn't matter if it is terrible, most companies aren't in the software sector.
It only needs to be good enough to keep the lights on, and the occasional escalation to sort out any big issue is seen as business as usual.
It only needs to be good enough to keep the lights on, and the occasional escalation to sort out any big issue is seen as business as usual.
> Sure, for a few years you can coast on what the developers you laid off/fired built but cracks will start to show and you can't just slot in developers like RAM sticks.
This is the key point, software is a creative field - and you ultimately aren't going to get more than maintenance/routine upgrades from an outsourced firm. They simply don't care enough to want to go beyond their contract. You aren't going to be able to get top-tier talent to work in your timezone if that means working a graveyard shift.
This is the key point, software is a creative field - and you ultimately aren't going to get more than maintenance/routine upgrades from an outsourced firm. They simply don't care enough to want to go beyond their contract. You aren't going to be able to get top-tier talent to work in your timezone if that means working a graveyard shift.
The trick here as an ambitious MBA is to carefully estimate whether you can coast long enough that you get rewarded for successfully cutting costs, but are also able to jump ship before shit hits the fan.
Leverage a series of short term wins/long term failures to rocket yourself up to the top.
Leverage a series of short term wins/long term failures to rocket yourself up to the top.
All of the good foreign developers are in America making 10x more than they would be in their home country.
Actually yes I do.
Feel very strongly that the tech work from home movement is shining a light on something they don’t want a light shined on. They should be vehemently making cases that teams need to be in offices together and that “face to face is best” to keep their jobs in their citadel.
Feel very strongly that the tech work from home movement is shining a light on something they don’t want a light shined on. They should be vehemently making cases that teams need to be in offices together and that “face to face is best” to keep their jobs in their citadel.
If work (of any kind) can only be done face-to-face, why do companies have satellite offices? I've never worked for a company with more than a few hundred employees that didn't have offices in multiple states and co-workers who had never met in person, yet still conducted business just fine remotely.
Or maybe it’s enough to have people in the same time zone working the same hours and communicating using technology.
There is a big difference between questions being answered right away and questions being answered overnight that one still has to consider for outsourcing.
There is a big difference between questions being answered right away and questions being answered overnight that one still has to consider for outsourcing.
Right. Both sides of this debate have been disingenuous.
The remote-or-bust crowd always seems to assume salaries would stay the same. Most, not all, but most software development jobs don't require specialty skills. If the job can truly be done anywhere, why would we assume the answer will be to pay SF salaries all around the world?
The must-be-in-office crowd tends to ignore that most of the time remote work mostly is fine. Yes, everyone has an anecdote of this going horribly wrong. But they ignore that minimizing costs as first priority is not going to yield optimal results. And a lot of those horror stories involve bottom rate outsourcing operations.
There exists a world in which outsourcing/remote covers most needs but pays less than we're used to in the US software industry. It's neither the penny on the dollar model of traditional outsourcing nor junior devs making 500K TC in theo there extreme.
The remote-or-bust crowd always seems to assume salaries would stay the same. Most, not all, but most software development jobs don't require specialty skills. If the job can truly be done anywhere, why would we assume the answer will be to pay SF salaries all around the world?
The must-be-in-office crowd tends to ignore that most of the time remote work mostly is fine. Yes, everyone has an anecdote of this going horribly wrong. But they ignore that minimizing costs as first priority is not going to yield optimal results. And a lot of those horror stories involve bottom rate outsourcing operations.
There exists a world in which outsourcing/remote covers most needs but pays less than we're used to in the US software industry. It's neither the penny on the dollar model of traditional outsourcing nor junior devs making 500K TC in theo there extreme.
Absolutely. I am seeing this unfold right in front of me and I'm amazed how happy people are to cut their own throat. I guess it's just because a lot of people have only ever experienced being highly in demand.
I think they were sitting around saying "The outsourcing of the 1990s failed because of poor communication; there's no replacement for regular face-to-face meetings"
I have no doubt there are execs sitting around thinking that, they are wrong but I don't doubt it. There are a how slew of reasons why outsourcing fails time and time again and "poor communication" isn't very high on that list.
> I have no doubt there are execs sitting around thinking that, they are wrong but I don't doubt it. There are a how slew of reasons why outsourcing fails time and time again and "poor communication" isn't very high on that list.
Poor communication a multiplying factor for all the other problems.
Poor communication a multiplying factor for all the other problems.
Agreed, "poor communication" can mean a number of things that are huge problems.
> "The outsourcing of the 1990s failed because of poor communication; there's no replacement for regular face-to-face meetings" reply
I was specifically talking about the progression of things like video/audio/text chat (think Zoom/Slack) but I get that I wasn't clear. I fixated on "there's no replacement for regular face-to-face meetings" which isn't true, and that alone wasn't the reason outsourcing failed.
Language barriers, cultural barriers, timezones, and the list goes on of things I group under "poor communication". These should not be scoffed at or downplayed.
> "The outsourcing of the 1990s failed because of poor communication; there's no replacement for regular face-to-face meetings" reply
I was specifically talking about the progression of things like video/audio/text chat (think Zoom/Slack) but I get that I wasn't clear. I fixated on "there's no replacement for regular face-to-face meetings" which isn't true, and that alone wasn't the reason outsourcing failed.
Language barriers, cultural barriers, timezones, and the list goes on of things I group under "poor communication". These should not be scoffed at or downplayed.
Having some experience with this -- poor communication comes time and time again as the number one problem both clients and outsourcing companies list as problems in their google slides during project retrospectives.
In the 1990s there was zero talk of outsourcing. It was early to mid-2000s where it started.
> If it could have been outsourced it would have already been outsourced
It already has been outsourced and then re-insourced as soon as the quality was evident.
It already has been outsourced and then re-insourced as soon as the quality was evident.
> It already has been outsourced and then re-insourced as soon as the quality was evident.
And you don't hear about it because no company wants to advertise eating crow. I once worked for a place that made a huge deal about "$comapnyName China" office opening. A few weeks later I was asked to review a project they did, 150+ hours logged, didn't follow any of our style guides, didn't work, showed a complete lack of understanding of the framework we were using. I redid the entire project in 8 hours. The "China branch" didn't last long after that, but it also was never mentioned again, they swept it under the rug and pretended it never existed.
I'm sure some morons will outsource their development, I'll find the smarter companies and work for them until the "who cares, it saves money" group is ousted or comes to their senses (unlikely).
And you don't hear about it because no company wants to advertise eating crow. I once worked for a place that made a huge deal about "$comapnyName China" office opening. A few weeks later I was asked to review a project they did, 150+ hours logged, didn't follow any of our style guides, didn't work, showed a complete lack of understanding of the framework we were using. I redid the entire project in 8 hours. The "China branch" didn't last long after that, but it also was never mentioned again, they swept it under the rug and pretended it never existed.
I'm sure some morons will outsource their development, I'll find the smarter companies and work for them until the "who cares, it saves money" group is ousted or comes to their senses (unlikely).
A common trend I've seen for roles recruiters have contacted me on was for startups that outsourced huge chunks of development and are looking for senior \ staff developer to ensure the quality stays above board.
'Hiring cheap body shop devs. from poor country X' - is not what's happening here.
This is not 'offshore body shop' movement.
It's the 'hire from anywhere movement' because 'remote working' ... and anyone doubting this is in for hard awakening.
The underlying assumption that US devs are somehow 'better' is absurdly wrong.
US businesses are often better, for a variety or reasons, pushing up the salaries of those who can ultimately work 'in the office' (by passport or whatever) - but that's changing due to 'remote work'.
It's a big, real, secular, probably transformation change.
It's probably for the better actually - the only problem I have with it is the the accumulation of capital by shareholders who have more power.
This is not 'offshore body shop' movement.
It's the 'hire from anywhere movement' because 'remote working' ... and anyone doubting this is in for hard awakening.
The underlying assumption that US devs are somehow 'better' is absurdly wrong.
US businesses are often better, for a variety or reasons, pushing up the salaries of those who can ultimately work 'in the office' (by passport or whatever) - but that's changing due to 'remote work'.
It's a big, real, secular, probably transformation change.
It's probably for the better actually - the only problem I have with it is the the accumulation of capital by shareholders who have more power.
> The underlying assumption that US devs are somehow 'better'
Who ever said that? 99% of US devs are Indian devs anyway - in 30 years of developing software I've probably only ever worked with a few dozen US natives. Devs in the same time zone, with at least a passing knowledge of US culture, on the other hand...
Who ever said that? 99% of US devs are Indian devs anyway - in 30 years of developing software I've probably only ever worked with a few dozen US natives. Devs in the same time zone, with at least a passing knowledge of US culture, on the other hand...
The article doesn’t even mention RTO so I don’t see how you came to that conclusion. This article is about scare tactics to get more visas.
Just because they don't say it doesn't mean it's not there.
WSJ and NYT specifically have been running a steady stream of articles about the need, benefits, and inevitability of returning office workers to full time in person work.
You don't need a conspiracy explanation to see the trend in these publications, and they've obviously been working this from multiple angles. There's no reason to dismiss this article as part of that pressure just because it can also accomplish another goal.
WSJ and NYT specifically have been running a steady stream of articles about the need, benefits, and inevitability of returning office workers to full time in person work.
You don't need a conspiracy explanation to see the trend in these publications, and they've obviously been working this from multiple angles. There's no reason to dismiss this article as part of that pressure just because it can also accomplish another goal.
> If it could have been outsourced it would have already been outsourced
This time is indeed different. Copying my answer from elsewhere in this thread: "now with fully remote, it is easy to replace a USA team member with a Mexican or Canadian or Brazilian and do it one by one. boil the frog slowly. and very soon, majority of your team will be outside USA. I am still watching it happen at my current shop. Majority of new hires and new headcount is from other countries."
This time is indeed different. Copying my answer from elsewhere in this thread: "now with fully remote, it is easy to replace a USA team member with a Mexican or Canadian or Brazilian and do it one by one. boil the frog slowly. and very soon, majority of your team will be outside USA. I am still watching it happen at my current shop. Majority of new hires and new headcount is from other countries."
"If it could have been outsourced it would have already been outsourced."
You're in for a rude awakening.
It wasn't outsourced before because:
1) standard was in-office and
2) no mass movement to validate it
3) 'outsourced overseas' often meant 'poor country'.
We are only expanding overseas right now because the quality is good and the price is much better. At least for what we are doing.
The Valley is not going away, neither are high salaries, though I do wonder what it means for 'home talent at the high range'.
You're in for a rude awakening.
It wasn't outsourced before because:
1) standard was in-office and
2) no mass movement to validate it
3) 'outsourced overseas' often meant 'poor country'.
We are only expanding overseas right now because the quality is good and the price is much better. At least for what we are doing.
The Valley is not going away, neither are high salaries, though I do wonder what it means for 'home talent at the high range'.
> We are only expanding overseas right now because the quality is good and the price is much better.
Indeed. I've been WFH/remote my entire career and have long worked with folks throughout the world. I was considered an outlier for almost all of it.
In the past 12mo this has tectonically shifted. Midsize companies I'm close to who would never have dreamed of "outsourcing" are now instituting US hiring freezes after seeing how well hiring a few developers out of eastern europe went. In many cases the talent is simply better without any cost benefit calculation needed.
Yes, the top-tier rockstar talent (anyone posting on HN is clearly in that club of course) has nothing to worry about. The everyman programmer working on yet another line of business app or CRUD interface is in for an incredibly brutal market over the next decade or two.
Anyone that dismisses this as "outsourcing" is not paying attention. There is little difference working with someone in Toledo Spain vs. Toledo Ohio other than timezone.
Timezone is pretty much the sole remaining argument. However, if you are now 100% remote WFH friendly - why would timezones matter that much? All documentation and process is fully online and asynchronous already so a few hours of overlap a day is more than sufficient for well-run teams on most projects.
Indeed. I've been WFH/remote my entire career and have long worked with folks throughout the world. I was considered an outlier for almost all of it.
In the past 12mo this has tectonically shifted. Midsize companies I'm close to who would never have dreamed of "outsourcing" are now instituting US hiring freezes after seeing how well hiring a few developers out of eastern europe went. In many cases the talent is simply better without any cost benefit calculation needed.
Yes, the top-tier rockstar talent (anyone posting on HN is clearly in that club of course) has nothing to worry about. The everyman programmer working on yet another line of business app or CRUD interface is in for an incredibly brutal market over the next decade or two.
Anyone that dismisses this as "outsourcing" is not paying attention. There is little difference working with someone in Toledo Spain vs. Toledo Ohio other than timezone.
Timezone is pretty much the sole remaining argument. However, if you are now 100% remote WFH friendly - why would timezones matter that much? All documentation and process is fully online and asynchronous already so a few hours of overlap a day is more than sufficient for well-run teams on most projects.
H1B visas are a lottery with <30% chance of getting picked up. Employment-based immigration to the US is a long process (1.5-2 yrs), on top of only 15% green cards being allocated to it, not to mention all the rate throttling quotas. USCIS is primarily paper run and super backlogged so those already here are also stuck in paperwork and in many cases end up losing work auth because they are so slow.
Many don't realize how bad its gotten lately on the immigration front. Last year, USCIS wasted 160K green cards, this year they are on track to waste 200K green cards, simply because they are too slow to process paperwork.
Companies are probably tired of all this uncertainty and legal overhead so they now offer relocation to their offices outside US if you have visa problems and to have easier access to talent. Remote work has accelerated this since teams are now learning to be geographically distributed.
Companies are now finding it easier to just let their top talent work from their home country, pay them way more than local rates (helps retention) and setup payroll than deal with US visas and immigration.
It's only a few years ordeal to get a green card if you're not Indian, otherwise it's a multi-decade wait. So many are starting to take the offer and move out once they've earned a decent amount.
Many don't realize how bad its gotten lately on the immigration front. Last year, USCIS wasted 160K green cards, this year they are on track to waste 200K green cards, simply because they are too slow to process paperwork.
Companies are probably tired of all this uncertainty and legal overhead so they now offer relocation to their offices outside US if you have visa problems and to have easier access to talent. Remote work has accelerated this since teams are now learning to be geographically distributed.
Companies are now finding it easier to just let their top talent work from their home country, pay them way more than local rates (helps retention) and setup payroll than deal with US visas and immigration.
It's only a few years ordeal to get a green card if you're not Indian, otherwise it's a multi-decade wait. So many are starting to take the offer and move out once they've earned a decent amount.
Also, if you (as an employer) don't bother with the US immigration system, you don't have to pay US-competitive salaries as that system requires.
Sure, FAANG companies may be too rich to care, but they're also probably a small fraction of US tech employment.
Sure, FAANG companies may be too rich to care, but they're also probably a small fraction of US tech employment.
What's the difference between outsourcing and immigration? It's still taking jobs away from the native population.
Because the money still goes into the American economy. They buy food, housing, insurance, consumer goods, services. Immigrants are a huge financial boon because we get an adult that Americans didn't have to pay for. Prenatal care, delivery, food, childhood education, all of that gets paid for by somebody else and then we get the product of their expenditure for free. That's like every single immigrant donating one or two hundred thousand dollars to the nation as a whole the moment they cross the border. Then as an added bonus they have children here, and help shore up declining birthrates.
We don't want them buying housing, we have a housing shortage.
Who should buy the housing stock then? Investment funds that will convert the homes to long-term Airbnbs?
More people wanting a product is a short-term price driver. If the price stays exorbitant over years and decades that is a supply-side problem that will not be fixed by slightly reducing the number of consumers.
Kind of like the difference between renting and buying.
Financially, money paid to immigrants stays in the economy of the country they've immigrated to. (Minus money sent back to family in their country of origin, but that will necessarily be much less than 100%.)
Socially, immigrants become part of the community & society. Given that they tend to be skilled, motivated, and adaptable (they need to communicate with multiple cultures, for one!), this tends to be a good deal for the receiving country.
It's like trade, it always seems to end up enriching trading partners as compared to those that refuse to trade at all. And like trade, it requires some degree of control and regulation to not impoverish portions of the population while enriching others—both trade and immigration can be gamed. Nothing's going to have a positive impact on everyone across the board, but it's not like what people seem to be fearing when they focus only on the direct job impact on the so-called "native" population.
Financially, money paid to immigrants stays in the economy of the country they've immigrated to. (Minus money sent back to family in their country of origin, but that will necessarily be much less than 100%.)
Socially, immigrants become part of the community & society. Given that they tend to be skilled, motivated, and adaptable (they need to communicate with multiple cultures, for one!), this tends to be a good deal for the receiving country.
It's like trade, it always seems to end up enriching trading partners as compared to those that refuse to trade at all. And like trade, it requires some degree of control and regulation to not impoverish portions of the population while enriching others—both trade and immigration can be gamed. Nothing's going to have a positive impact on everyone across the board, but it's not like what people seem to be fearing when they focus only on the direct job impact on the so-called "native" population.
This trend was fully present pre covid, especially in the high cost areas. If your task requires “programmers”, there’s lots of them and companies seek the lowest cost. If, rather, you have a task that requires “top-notch” or speciality programmers, there’s far fewer of them to choose from.
Before, companies needed to find them, then convince them to relocate and deal with the immigration hassles associated with relocation. This was tedious and companies hire companies to do this. If these people are not required to relocate, the size of the hiring pool increases to include multi-professional families or those with strong geographic preferences.
I guess this can be rephrased to: if programmers are a commodity, work will flow to the lowest cost area possible. If it’s anti-commodity/bespoke work, one must gather the craftspeople one needs. And these people know they’re valuable which makes the negotiation more even.
Before, companies needed to find them, then convince them to relocate and deal with the immigration hassles associated with relocation. This was tedious and companies hire companies to do this. If these people are not required to relocate, the size of the hiring pool increases to include multi-professional families or those with strong geographic preferences.
I guess this can be rephrased to: if programmers are a commodity, work will flow to the lowest cost area possible. If it’s anti-commodity/bespoke work, one must gather the craftspeople one needs. And these people know they’re valuable which makes the negotiation more even.
It’s more about trust than finances.
Face to face and remote work within the companies legal boundaries is the safer choice. Remote work with no legal leverage is scary when you think about handing over company assets.
But then again, many large companies have managers looking to climb the ladder so they outsource at all costs to make the budget look better- it’s a risky gamble and sometimes it just works. Most times this ends with years of waste in other areas of the company.
Trust issues will limit the adoption of remote work.
Face to face and remote work within the companies legal boundaries is the safer choice. Remote work with no legal leverage is scary when you think about handing over company assets.
But then again, many large companies have managers looking to climb the ladder so they outsource at all costs to make the budget look better- it’s a risky gamble and sometimes it just works. Most times this ends with years of waste in other areas of the company.
Trust issues will limit the adoption of remote work.
> But then again, many large companies have managers looking to climb the ladder so they outsource at all costs to make the budget look better- it’s a risky gamble and sometimes it just works. Most times this ends with years of waste in other areas of the company.
This works in the short term, in the same way you could probably lay off 90% of your developers and keep thinks chugging along for a couple years (albeit with next to zero new development). These things take time to fully poison the host but the exec climbing the ladder doesn't care. They get the praise for cutting costs, they aren't responsible for the code/product, and they will jet off to some new company to ruin things before the shit hits the fan.
This works in the short term, in the same way you could probably lay off 90% of your developers and keep thinks chugging along for a couple years (albeit with next to zero new development). These things take time to fully poison the host but the exec climbing the ladder doesn't care. They get the praise for cutting costs, they aren't responsible for the code/product, and they will jet off to some new company to ruin things before the shit hits the fan.
I partially agree. Some companies are so dysfunctional contractors are the only ones getting stuff done. Some IT departments are just so slow and have so much red tape (no incentive to change the status quo - or have their hands tied for other internal political reasons) that nothing gets done as long as paychecks are cashing. I feel like this is off the main thread but none the less a reason for outsourcing in some cases may turn into a net gain for the company.
These types of places absolutely exist but while outsourcing might see a net gain I think they'd see an even bigger gain by getting rid of the dead weight and hiring people who aren't so stale/set in their ways. As in this is a failing of management and not something that outsourcing really "fixes".
It's been my experience that companies are not willing to make these choices. I'm not saying "Bob had a bad week, let's fire him" or "Tom is going through some personal stuff and his work has slacked, let him go" but rather repeated failures with attempts to rectify them with the employee that aren't fixed. The bar to let someone go is absurdly high at some places and kills motivation for people who are doing the work "Well, John isn't doing any work and the company don't seem to care, I guess I'll stop caring as well and just coast".
At my last job I had a coworker who refused to pull their own weight. We had the same title and I (and others on the team) were producing 3x+ what they were (when this team member even did anything, 3*0 = 0). Repeated complaints to our manager fell on deaf ears even with irrefutable evidence of this team member doing practically nothing. Some weeks they would move a ticket between statuses and that was all they did, no comments, no commits, no PRs, no reviews, no testing, nothing. Some weeks there was literally 0 activity by them on any of the tools we used and they were always distracted/distant in meetings, hardly contributing at all. That wasn't the only reason I left that company but it was one of them.
It's been my experience that companies are not willing to make these choices. I'm not saying "Bob had a bad week, let's fire him" or "Tom is going through some personal stuff and his work has slacked, let him go" but rather repeated failures with attempts to rectify them with the employee that aren't fixed. The bar to let someone go is absurdly high at some places and kills motivation for people who are doing the work "Well, John isn't doing any work and the company don't seem to care, I guess I'll stop caring as well and just coast".
At my last job I had a coworker who refused to pull their own weight. We had the same title and I (and others on the team) were producing 3x+ what they were (when this team member even did anything, 3*0 = 0). Repeated complaints to our manager fell on deaf ears even with irrefutable evidence of this team member doing practically nothing. Some weeks they would move a ticket between statuses and that was all they did, no comments, no commits, no PRs, no reviews, no testing, nothing. Some weeks there was literally 0 activity by them on any of the tools we used and they were always distracted/distant in meetings, hardly contributing at all. That wasn't the only reason I left that company but it was one of them.
Nothing beats "it's cheaper". What happened to blue collar jobs in the US is coming for white collar jobs. Even if you don't do it, your competitor will and drive you out of business.
That is a good point. If I understand you correctly, a situation where someone comes to the US (for example) with deep ties to another country and knows the legal boundaries of both lands. They then have less of a trust issue farming out work to that lower wage location. Yes, I can see that happening in some cases.
Can’t say I’m too concerned. Every project I’ve ever worked on that outsourced something ended in failure or a major decline in quality. We used to need 3 accountants in the US, now we have an army of BPO accountants and none of them know what they’re doing and things take longer than ever. Outsourcing doesn’t work. It’s not even clear it costs less when you factor in the decline in quality, delays, and extra work needed by everyone else to monitor the outsourced work. The juice isn’t worth the squeeze.
> Can’t say I’m too concerned. Every project I’ve ever worked on that outsourced something ended in failure or a major decline in quality. We used to need 3 accountants in the US, now we have an army of BPO accountants and none of them know what they’re doing and things take longer than ever.
Honestly, I don't think corporate decision-makers really care about those metrics.
> It’s not even clear it costs less when you factor in the decline in quality, delays, and extra work needed by everyone else to monitor the outsourced work. The juice isn’t worth the squeeze.
So it's six of one, half a dozen of the other then? That's not a very persuasive argument against outsourcing.
Honestly, I don't think corporate decision-makers really care about those metrics.
> It’s not even clear it costs less when you factor in the decline in quality, delays, and extra work needed by everyone else to monitor the outsourced work. The juice isn’t worth the squeeze.
So it's six of one, half a dozen of the other then? That's not a very persuasive argument against outsourcing.
It’s not even clear it costs less when you factor in the decline in quality, delays, and extra work needed by everyone else to monitor the outsourced work. The juice isn’t worth the squeeze.
How do you read that as six one way, half a dozen the other? Outsourcing often leads to lower quality, delays (which has business opportunity costs) and extra expense to monitor and review the work. Instead of being faster, cheaper, better outsourcing is slower, more expensive, and worse. Why would anybody choose that?
How do you read that as six one way, half a dozen the other? Outsourcing often leads to lower quality, delays (which has business opportunity costs) and extra expense to monitor and review the work. Instead of being faster, cheaper, better outsourcing is slower, more expensive, and worse. Why would anybody choose that?
>> It’s not even clear it costs less when you factor in the decline in quality, delays, and extra work needed by everyone else to monitor the outsourced work. The juice isn’t worth the squeeze.
>> So it's six of one, half a dozen of the other then? That's not a very persuasive argument against outsourcing.
> How do you read that as six one way, half a dozen the other?
If the costs aren't significantly higher than in-sourced work in ways quantifiable in dollars, then I don't think it's going to matter much to business leaders.
In other words, they just don't plain care about the things we care about. If the thing gets done crappily and painfully, it's still done, and that's fine with them.
Also, I don't think businesses are logical or rigorous places. IMHO, it's par for the course to "save" money by shifting costs into more difficult to quantify areas. For instance: cut desktop support, and the costs move into the groups being supported, so long as the complaints aren't loud enough to reach up through many layers of management, you have yourself a "win".
>> So it's six of one, half a dozen of the other then? That's not a very persuasive argument against outsourcing.
> How do you read that as six one way, half a dozen the other?
If the costs aren't significantly higher than in-sourced work in ways quantifiable in dollars, then I don't think it's going to matter much to business leaders.
In other words, they just don't plain care about the things we care about. If the thing gets done crappily and painfully, it's still done, and that's fine with them.
Also, I don't think businesses are logical or rigorous places. IMHO, it's par for the course to "save" money by shifting costs into more difficult to quantify areas. For instance: cut desktop support, and the costs move into the groups being supported, so long as the complaints aren't loud enough to reach up through many layers of management, you have yourself a "win".
They’ve been saying this for over two decades now. Nothing has changed. We know what the cost of cheaper labor means in software. We also know that people are generally happier working from home if they are tech workers.
The companies that embrace remote first or even hybrid scenarios will be the winner in the long run. Happier employees = better outcomes.
If my job could be outsourced, it would’ve been ten years ago when I first joined the workforce as a remote employee.
The companies that embrace remote first or even hybrid scenarios will be the winner in the long run. Happier employees = better outcomes.
If my job could be outsourced, it would’ve been ten years ago when I first joined the workforce as a remote employee.
> If my job could be outsourced, it would’ve been ten years ago when I first joined the workforce as a remote employee
The difference this time is that we are heading for a recession. Company leadership doesn't want to take the risk of outsourcing while times are good and profits are doubling each year. But when the stock price is in freefall and they are under pressure to cut costs, then the risk/reward of outsourcing looks more attractive.
We haven't had a recession since '08, and the landscape is very different now. Remote work tech was in its infancy back then - Zoom, Slack, Google Drive weren't even created yet. Plus India and China (and others) have developed further and starting pumping out 100s of thousands of CS grads each year that didn't exist in '08.
I think we're about to see a big wave of outsourcing over the next few years. And if companies are smart about it (e.g. do it slowly to allow knowledge transfer and compete for top talent, not bottom of the barrel) then it will be successful.
The difference this time is that we are heading for a recession. Company leadership doesn't want to take the risk of outsourcing while times are good and profits are doubling each year. But when the stock price is in freefall and they are under pressure to cut costs, then the risk/reward of outsourcing looks more attractive.
We haven't had a recession since '08, and the landscape is very different now. Remote work tech was in its infancy back then - Zoom, Slack, Google Drive weren't even created yet. Plus India and China (and others) have developed further and starting pumping out 100s of thousands of CS grads each year that didn't exist in '08.
I think we're about to see a big wave of outsourcing over the next few years. And if companies are smart about it (e.g. do it slowly to allow knowledge transfer and compete for top talent, not bottom of the barrel) then it will be successful.
>The difference this time is that we are heading for a recession.
>I think we're about to see a big wave of outsourcing over the next few years.
Yes, but if companies are gonna outsource, they are gonna outsource whether their employees work at the office or work remote. It's purely a financial decision, not a "if you don't come to the office, we are going to outsource you," decision. Executives might use that ploy/threat to get people into the office, but they will still outsource regardless, if it makes sense for their company, just like they have been doing for the last 20+ years.
>I think we're about to see a big wave of outsourcing over the next few years.
Yes, but if companies are gonna outsource, they are gonna outsource whether their employees work at the office or work remote. It's purely a financial decision, not a "if you don't come to the office, we are going to outsource you," decision. Executives might use that ploy/threat to get people into the office, but they will still outsource regardless, if it makes sense for their company, just like they have been doing for the last 20+ years.
While you bring up great points, similar points were made many years ago.
You still have the most challenging things to work through which are general people/team problems:
- Language barriers
- Timezones
- Craftsmanship/Quality
- Leadership involvement
- etc
I've read over 300 books in the last few years on companies/leadership topics and I would really challenge that this time will be any different regardless of the economic conditions.
The tech industry is still at a deficit for talent. Companies are still hiring faster than ever and the supply is limited between them all and future grads/bootcamps/apprentice programs. India and China have a thriving tech education system and the growth definitely is showing, but most of these companies hiring on full blast already have huge developments for these regions and will continue to expand like US.
While more business opportunities may land in these major regions, the article suggests worker shortages, limited immigration, etc as a means to "offshore" current or future work from the US. I think both the US and these major regions will continue to grow at unprecedented paces. Perhaps slower during a recession, but most of these big companies are growing faster than ever, not showing signs of slowing down too much.
You still have the most challenging things to work through which are general people/team problems:
- Language barriers
- Timezones
- Craftsmanship/Quality
- Leadership involvement
- etc
I've read over 300 books in the last few years on companies/leadership topics and I would really challenge that this time will be any different regardless of the economic conditions.
The tech industry is still at a deficit for talent. Companies are still hiring faster than ever and the supply is limited between them all and future grads/bootcamps/apprentice programs. India and China have a thriving tech education system and the growth definitely is showing, but most of these companies hiring on full blast already have huge developments for these regions and will continue to expand like US.
While more business opportunities may land in these major regions, the article suggests worker shortages, limited immigration, etc as a means to "offshore" current or future work from the US. I think both the US and these major regions will continue to grow at unprecedented paces. Perhaps slower during a recession, but most of these big companies are growing faster than ever, not showing signs of slowing down too much.
'Tech industry' has offices in India, China, Canada already to exploit the cheaper labor directly.
Replace "exploit" with "pay less because the cost of living there is much lower".
My colleague in India gets paid a fraction of what I make, but he is able to afford a bigger house and more luxuries. The cost of living in the Western word is out of control.
My colleague in India gets paid a fraction of what I make, but he is able to afford a bigger house and more luxuries. The cost of living in the Western word is out of control.
Its insane. Go live in Asia for a couple of years then come back -- you'll be shocked at how little you actually make in the West comparatively in terms of spending power.
There is too much economic friction in the Western world, which drives up the cost of living (bad zoning laws that drive cost of housing, too much regulation...).
During the last year I know multiple people who have doubled there salaries with being hired remotely and local companies being unhappy about the situation.
India, Canada, and (especially) China also have their own 'tech industries,' which are able to hire talent locally without dealing with the headaches of having an international team.
Canada doesn't have much in the way of a "tech industry" because all the new grads who can move to the US for much higher pay and few unicorn companies (like shopify) stay here. Many of the offices in Canada are here for the purpose of hiring people from other countries who can't get through the US immigration system. Housing has become insanely expensive and people aren't getting paid enough to offset the high cost of housing. Meanwhile our government is importing low wage low skill workers via the temporary worker program for things like fast food restaurants because people don't make enough to get out of fast food while working at fast food, so they have trouble attracting workers.
The bottom line is canada is quickly becoming a place to import workers from cheaper countries to keep pay low while any Canadians who have the education and experience flee to the USA for higher wages.
I've seen it in my lifetime with non computer engineering disciplines. A structural engineer making 70k because it's easy to import them from other countries and it drives wages down. The last PEO survey I saw said something like 2/3rd of Canadian engineering grads are not finding work in their industry of choice at all.
The bottom line is canada is quickly becoming a place to import workers from cheaper countries to keep pay low while any Canadians who have the education and experience flee to the USA for higher wages.
I've seen it in my lifetime with non computer engineering disciplines. A structural engineer making 70k because it's easy to import them from other countries and it drives wages down. The last PEO survey I saw said something like 2/3rd of Canadian engineering grads are not finding work in their industry of choice at all.
Pre covid H1B was already huge and somewhat under fire for being a cost of labour diluting trend.
If your company was willing to pay a US immigration cost to get somebody in, and can now shave 10%+ off salary to get the same awesome brains from another country AND get 24/7 effort on the problem... what's not to love?
If your company was willing to pay a US immigration cost to get somebody in, and can now shave 10%+ off salary to get the same awesome brains from another country AND get 24/7 effort on the problem... what's not to love?
because that’s not how capitalism works
capitalism means making profits
making profits means lowering costs
outsourcing is a way to lower costs
capitalism means making profits
making profits means lowering costs
outsourcing is a way to lower costs
coming back to this late, I think my english-language sentences confused people. What I said in "whats not to love" is "this is how capitalism works" but clearly you thought I was saying something else.
eh... if the only way for you to increase profits is to cut costs you have a problem that will accelerate after you have nothing more to cut.
>> making profits means lowering costs
> eh... if the only way for you to increase profits is to cut costs you have a problem that will accelerate after you have nothing more to cut.
You're nitpicking, the GP's post can be easily repaired by reading that as "lowering costs means making more profits."
Businesses like to turn all the dials to increase their profits.
> eh... if the only way for you to increase profits is to cut costs you have a problem that will accelerate after you have nothing more to cut.
You're nitpicking, the GP's post can be easily repaired by reading that as "lowering costs means making more profits."
Businesses like to turn all the dials to increase their profits.
There was a poll on LinkedIn for tech salaries in Quebec (same timezone as New York, most people speak English well enough, good universities) and the result was that 50% make less than 100k (75k USD). Only 20% make more than 125k (96k USD). Plus the government will subsidize the salaries anywhere from 25% to 60% using tax credits (even more in video games).
So it does make sense to hire here for a US based company without sacrifing quality like we all had the experience with cheap outsourced.
While frequenting Montreal meetups before COVID I came to realization that skilled folks work for US companies directly as contractors and thus outsourcing agencies are not needed (for them at least).
Until companies start competing for talent in Quebec.
So wait -- 50% make more than 100k. Thats pretty good! Montreal isn't that expensive -- yet.
To be honest, as a European I think it's a good thing and we're already seeing its consequences: salaries which are way lower than US ones have already started rising, and lots of interesting startups that didn't want to hire us before have changed their minds.
So at least on our side of the ocean it's pretty good! I just hope there's no negative impact for Americans and we can all enjoy this change.
So at least on our side of the ocean it's pretty good! I just hope there's no negative impact for Americans and we can all enjoy this change.
I agree with many of the comments saying that overseas outsourcing is unlikely to happen en masse. While I don't think the quality of foreign developers is necessarily lower than domestic developers (look at all the great Eastern European software companies, like JetBrains), timezone issues and language barriers prove that there's a limit to just how remote workers can be. [*]
However, as more and more companies adopt regional cost-of-living adjustments for salaries, domestic "outsourcing" (i.e. preferential hiring of employees in lower CoL areas) is likely to increase. Assuming developers in Ohio are just as skilled as Bay Area developers and a two hour timezone difference is easily surmountable, why would Silicon Valley companies not preferentially hire Ohioans if they can pay them 2/3rds as much as Bay Area employees? A $200k salary in lower CoL parts of the country goes much further than a $300k salary in the Bay.
[*] That said, even in high CoL parts of Western Europe, tech salaries are far lower than salaries in high CoL parts of the US (e.g. developers in London make on average ~70% of NYC salaries [0,1]). For certain tech companies on the East Coast, a 6 hour timezone difference might be acceptable for such a dramatic reduction in labor costs. Imagine how much lower salaries are in lower CoL parts of Western Europe.
[0] https://www.levels.fyi/Salaries/Software-Engineer/London/ (median compensation: $133k)
[1] https://www.levels.fyi/Salaries/Software-Engineer/New-York-C... (median compensation: $188k)
However, as more and more companies adopt regional cost-of-living adjustments for salaries, domestic "outsourcing" (i.e. preferential hiring of employees in lower CoL areas) is likely to increase. Assuming developers in Ohio are just as skilled as Bay Area developers and a two hour timezone difference is easily surmountable, why would Silicon Valley companies not preferentially hire Ohioans if they can pay them 2/3rds as much as Bay Area employees? A $200k salary in lower CoL parts of the country goes much further than a $300k salary in the Bay.
[*] That said, even in high CoL parts of Western Europe, tech salaries are far lower than salaries in high CoL parts of the US (e.g. developers in London make on average ~70% of NYC salaries [0,1]). For certain tech companies on the East Coast, a 6 hour timezone difference might be acceptable for such a dramatic reduction in labor costs. Imagine how much lower salaries are in lower CoL parts of Western Europe.
[0] https://www.levels.fyi/Salaries/Software-Engineer/London/ (median compensation: $133k)
[1] https://www.levels.fyi/Salaries/Software-Engineer/New-York-C... (median compensation: $188k)
The obvious response is: "do it, you won't."
They might scare the new grads with that sort of talk, but we've seen what happens when you outsource jobs with the sole aim of saving money.
Those of us old enough to remember those times, also have a special rate for helping to clean up projects which started that way. It's usually somewhere in the 200-500% range.
They might scare the new grads with that sort of talk, but we've seen what happens when you outsource jobs with the sole aim of saving money.
Those of us old enough to remember those times, also have a special rate for helping to clean up projects which started that way. It's usually somewhere in the 200-500% range.
Of course. Why pay US salaries and US rents, when the rest of the world is cheaper and probably has better tech talent?
Called this out 10 months back: https://news.ycombinator.com/item?id=27696235
The most FAQ is "hey we tried it in 2000's with outsourcing and nothing happened. why worry now?"
The answer is "now with fully remote, it is easy to replace a USA team member with a Mexican or Canadian or Brazilian and do it one by one. boil the frog slowly. and very soon, majority of your team will be outside USA".
I am still watching it happen at my current shop. Majority of new hires and new headcount is from other countries.
The most FAQ is "hey we tried it in 2000's with outsourcing and nothing happened. why worry now?"
The answer is "now with fully remote, it is easy to replace a USA team member with a Mexican or Canadian or Brazilian and do it one by one. boil the frog slowly. and very soon, majority of your team will be outside USA".
I am still watching it happen at my current shop. Majority of new hires and new headcount is from other countries.
Why are people saying overseas outsourcing is unlikely to happen? Hasn’t it already happened? Isn’t it just because tech has been expanding greatly that there’s no perceived reduction in jobs in the USA?
Unless it’s a hierarchical remote-first tech-only company, in-person is the only way to really see the business problems and stay in the loop. And when (not if) the current tech boom busts (which may have started) the remote jobs that are lost won’t come back to the US.
"unless the U.S. admits more high-skilled immigrants"
Some things never change
Some things never change
The only people that win in this are people with dual citizenship/permanent residence in LCOL countries. It isn’t that big of a pool.
Most tech work isn't that hard
Other people around the world have been getting CS degrees too. Americans think everyone in Africa is starving...everyone in Mexico is in a drug cartel...and yet, I know folks who are extremely happy with the tech talent in both regions.
These other people tend to work for less than US tech workers
So, why is anyone surprised?
Other people around the world have been getting CS degrees too. Americans think everyone in Africa is starving...everyone in Mexico is in a drug cartel...and yet, I know folks who are extremely happy with the tech talent in both regions.
These other people tend to work for less than US tech workers
So, why is anyone surprised?
So, the tech industry warns that unless the government allows more low-paid immigrants in, they'll outsource. What else is new?
This is the obvious end result. All those whiners revolting against returning to the office are destroying their own employment opportunities
> All those whiners
It never ceases to amaze me how completely unsympathetic people are towards other people just for wanting different things.
It never ceases to amaze me how completely unsympathetic people are towards other people just for wanting different things.
>> All those whiners
> It never ceases to amaze me how completely unsympathetic people are towards other people just for wanting different things.
Some of it is whining, though. Whining isn't a preference, it's an attitude and style of expressing that preference.
> It never ceases to amaze me how completely unsympathetic people are towards other people just for wanting different things.
Some of it is whining, though. Whining isn't a preference, it's an attitude and style of expressing that preference.
Frankly, you sound like a bit of a whiner who holds the opposite opinion. I don't understand why most conversations orient to this binary right / wrong argumentation when the issue is almost always more subtle.
Been there, done that. If it could have been outsourced it would have already been outsourced. Do you really think they were sitting around saying,”I know they cost more but I’m too busy playing golf to bother” and they’re only getting around to it now?