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Want to say that this model is still alive and well in Japan (like anywhere else obviously), and these days it looks like charging $10k/month (a lot to companie

Want to say that this model is still alive and well in Japan (like anywhere else obviously), and these days it looks like charging $10k/month (a lot to companies here for a single developer) for $2-5k/month developers in APAC or eastern Europe, with the guarantee that the project will be looked after based on the sensibilities of someone local/from the US (this person is usually the face of the business or extremely high up, etc). At it's worst this pattern is parasitic but at it's best it's mutually beneficial symbiosis -- if we look at the reality of whether the developers could clear the trust barrier (whether it should be there or not is another question) to getting the roles, it becomes a question of what that barrier skip is worth. BTW, Japan is rife with middlemen taking cuts. If you want to have a chuckle, look into property purchasing in japan/proptech. There are usually 3+ middlemen in the apartment purchase flow here, and fees that you do not see in most other places, ex. "reikin" (AKA "Key Money")[0]. [0]: https://en.wikipedia.org/wiki/Key_money https://en.wikipedia.org/wiki/Key_money

franciscop 5y ago
Parasitic implies one party (implied the employee?) is left worse off than otherwise. If these jobs are being accepted normally it's because the local offers are worse and the developer is not good/doesn't want to deal with the international business side (inc. finding clients, negotiating, etc). So it seems that in a free-ish market, this relationship would be strongly symbiotic, right? Interestingly in Japan they have "Key Money" and "Lock Change fee", which are two different non-refundable BS fees and they confused me initially. The key money also depends by region, with Kansai having it almost everywhere and in other areas "it depends".
- hardwaresofton 5y ago
  > Parasitic implies one party (implied the employee?) is left worse off than otherwise. If these jobs are being accepted normally it's because the local offers are worse and the developer is not good/doesn't want to deal with the international business side (inc. finding clients, negotiating, etc). So it seems that in a free-ish market, this relationship would be strongly symbiotic, right? It's hard to guarantee that the labor side wouldn't have been able to land the contract without the labor re-seller, so it's up to your own personal bias to see this as a service or as predatory. Could go either way but on a case by case basis this is subjective in my opinion. There's not much magic here (well if there is, it can vary greatly), the contracting agencies are middlemen reselling labor that is in various states of compatibility to the company purchasing the labor. Perfectly compatible market actors could be using middlemen when they don't need to, and middlemen are incentivized to make this the case. The usual questions of whether middlemen are good or bad apply and it's not as simple as it being strongly parasitic or strongly symbiotic in any case, it's more like a spectrum which is why I described it as such. A bit of anecdata: I know someone who worked for a contracting firm in NYC that hired Japanese developers (and relocated them) to work in the American market and paid them Japanese wages to work at American companies. The Japanese developers were always happy at first because they were blissfully ignorant and didn't know what the company actually charged. Just because the host isn't aware of the parasite doesn't mean it's not being adversely affected -- some hosts just live severely degraded lives with no idea that they're being drained. It's possible to take the stance that labor is simply paying for imperfect knowledge/market conditions but by that logic exploitation might as well not exist, and if that's the argument then we probably disagree on fundamental grounds about lots of things. > Interestingly in Japan they have "Key Money" and "Lock Change fee", which are two different non-refundable BS fees and they confused me initially. The key money also depends by region, with Kansai having it almost everywhere and in other areas "it depends". Sure, it's possible that the region a person wants to live in does not have Key Money in Japan, but I wouldn't count that a likely outcome. ~55% of apartments in Tokyo look to require Key Money[0], but I'd argue that even if it's not required, most first and maybe second time renters in Japan will pay it, thinking it's just a cost of doing business. All that changes in the second or third transaction ins knowledge on the renter's part. [0]: https://resources.realestate.co.jp/rent/what-percentage-of-apartments-in-japan-do-not-require-a-deposit-and-key-money/ https://resources.realestate.co.jp/rent/what-percentage-of-a...
- glandium 5y ago
  Note that "key money" is a "translation" of 礼金, which literally means "gratitude money" and has nothing to do with keys. That doesn't make it less bullshit, but it makes it clearly unrelated to lock change fees.
greggman3 5y ago
I have never had a problem with "key money". I just see it as asking for 2/26ths of your rent up front (the average key money being 2 months rent and paid again every 2 years). I know it's labeled as "礼金" but functionally there is no different from them asking for 2/26ths of my rent up front and then asking for 1/26th each month for the next 24 months. That the system has evolved to have this strange system is curious but looking at it as just an upfront portion of the rent removes most negative feelings about it, at least for me. The thing that still bugs me a little though is the fact that move in costs to the average apartment is 6 months rent. first month + 2 months deposit + 2 months key money + 1 month to realtor. So, a $2.5k a month apartment costs $15k to get started. You can often get 100% of your deposit back when you leave but still, I know lots of people, especially younger people, that saving up 6 months rent to move is hard which suggests it's a barrier to mobility. Note: I'm comparing to Los Angeles where for large apartment complexes it was often just first months rent + $500 deposit to move in.
- hardwaresofton 5y ago
  > The thing that still bugs me a little though is the fact that move in costs to the average apartment is 6 months rent. first month + 2 months deposit + 2 months key money + 1 month to realtor. So, a $2.5k a month apartment costs $15k to get started. Well that's simply the result of having so many middlepeople! :) The middlepeople figuring out that they should charge a multiple of rent rather than a static fee for the actual amount of work that may not keep up with inflation. A truly elegant solution. Another fun bit is the Guarantors that are sometimes required based on just how much the other side thinks they can trust you (or extract from you, since they often require guarantors they know). > You can often get 100% of your deposit back when you leave This I've not seen happen very often, most places will put it right in the contract that they're going to take 0 < x < 5 man out of what you paid just for "cleaning fees" and "AC maintenance" or what not, like an AirBnB would. > You can often get 100% of your deposit back when you leave but still, I know lots of people, especially younger people, that saving up 6 months rent to move is hard which suggests it's a barrier to mobility. I can see this, but a friend and I were discussing this the other day and he brought up an interesting point -- it could be that mobility was so common and bustling (maybe during the bubble?) that these middlepeople sprung up as a sort of natural reaction. I don't know the history but it's an interesting theory -- so maybe it's like a bad feedback loop -- middlemen appeared to facilitate lots and lots of real estate deals during a historic real estate boom, but they never geared back down so the friction persists.
unscaled 5y ago
While Japan is rife with middlemen taking the cut, 礼金 (key money) is not a good example. It goes directly to your landlord, just like your rent. Hiring in IT does have a lot of room for taking cuts. Most Japanese companies (even large ones - or rather, especially large ones) are very bad in doing their own recruiting, so they have to pay a lot of upfront fees to headhunters for every direct employee hired. This is another reason why hiring consulting staff can seem cheap on the short term.

franciscop 5y ago

Parasitic implies one party (implied the employee?) is left worse off than otherwise. If these jobs are being accepted normally it's because the local offers are worse and the developer is not good/doesn't want to deal with the international business side (inc. finding clients, negotiating, etc). So it seems that in a free-ish market, this relationship would be strongly symbiotic, right? Interestingly in Japan they have "Key Money" and "Lock Change fee", which are two different non-refundable BS fees and they confused me initially. The key money also depends by region, with Kansai having it almost everywhere and in other areas "it depends".

hardwaresofton 5y ago
> Parasitic implies one party (implied the employee?) is left worse off than otherwise. If these jobs are being accepted normally it's because the local offers are worse and the developer is not good/doesn't want to deal with the international business side (inc. finding clients, negotiating, etc). So it seems that in a free-ish market, this relationship would be strongly symbiotic, right? It's hard to guarantee that the labor side wouldn't have been able to land the contract without the labor re-seller, so it's up to your own personal bias to see this as a service or as predatory. Could go either way but on a case by case basis this is subjective in my opinion. There's not much magic here (well if there is, it can vary greatly), the contracting agencies are middlemen reselling labor that is in various states of compatibility to the company purchasing the labor. Perfectly compatible market actors could be using middlemen when they don't need to, and middlemen are incentivized to make this the case. The usual questions of whether middlemen are good or bad apply and it's not as simple as it being strongly parasitic or strongly symbiotic in any case, it's more like a spectrum which is why I described it as such. A bit of anecdata: I know someone who worked for a contracting firm in NYC that hired Japanese developers (and relocated them) to work in the American market and paid them Japanese wages to work at American companies. The Japanese developers were always happy at first because they were blissfully ignorant and didn't know what the company actually charged. Just because the host isn't aware of the parasite doesn't mean it's not being adversely affected -- some hosts just live severely degraded lives with no idea that they're being drained. It's possible to take the stance that labor is simply paying for imperfect knowledge/market conditions but by that logic exploitation might as well not exist, and if that's the argument then we probably disagree on fundamental grounds about lots of things. > Interestingly in Japan they have "Key Money" and "Lock Change fee", which are two different non-refundable BS fees and they confused me initially. The key money also depends by region, with Kansai having it almost everywhere and in other areas "it depends". Sure, it's possible that the region a person wants to live in does not have Key Money in Japan, but I wouldn't count that a likely outcome. ~55% of apartments in Tokyo look to require Key Money[0], but I'd argue that even if it's not required, most first and maybe second time renters in Japan will pay it, thinking it's just a cost of doing business. All that changes in the second or third transaction ins knowledge on the renter's part. [0]: https://resources.realestate.co.jp/rent/what-percentage-of-apartments-in-japan-do-not-require-a-deposit-and-key-money/ https://resources.realestate.co.jp/rent/what-percentage-of-a...
glandium 5y ago
Note that "key money" is a "translation" of 礼金, which literally means "gratitude money" and has nothing to do with keys. That doesn't make it less bullshit, but it makes it clearly unrelated to lock change fees.

greggman3 5y ago

I have never had a problem with "key money". I just see it as asking for 2/26ths of your rent up front (the average key money being 2 months rent and paid again every 2 years). I know it's labeled as "礼金" but functionally there is no different from them asking for 2/26ths of my rent up front and then asking for 1/26th each month for the next 24 months. That the system has evolved to have this strange system is curious but looking at it as just an upfront portion of the rent removes most negative feelings about it, at least for me. The thing that still bugs me a little though is the fact that move in costs to the average apartment is 6 months rent. first month + 2 months deposit + 2 months key money + 1 month to realtor. So, a $2.5k a month apartment costs $15k to get started. You can often get 100% of your deposit back when you leave but still, I know lots of people, especially younger people, that saving up 6 months rent to move is hard which suggests it's a barrier to mobility. Note: I'm comparing to Los Angeles where for large apartment complexes it was often just first months rent + $500 deposit to move in.

hardwaresofton 5y ago
> The thing that still bugs me a little though is the fact that move in costs to the average apartment is 6 months rent. first month + 2 months deposit + 2 months key money + 1 month to realtor. So, a $2.5k a month apartment costs $15k to get started. Well that's simply the result of having so many middlepeople! :) The middlepeople figuring out that they should charge a multiple of rent rather than a static fee for the actual amount of work that may not keep up with inflation. A truly elegant solution. Another fun bit is the Guarantors that are sometimes required based on just how much the other side thinks they can trust you (or extract from you, since they often require guarantors they know). > You can often get 100% of your deposit back when you leave This I've not seen happen very often, most places will put it right in the contract that they're going to take 0 < x < 5 man out of what you paid just for "cleaning fees" and "AC maintenance" or what not, like an AirBnB would. > You can often get 100% of your deposit back when you leave but still, I know lots of people, especially younger people, that saving up 6 months rent to move is hard which suggests it's a barrier to mobility. I can see this, but a friend and I were discussing this the other day and he brought up an interesting point -- it could be that mobility was so common and bustling (maybe during the bubble?) that these middlepeople sprung up as a sort of natural reaction. I don't know the history but it's an interesting theory -- so maybe it's like a bad feedback loop -- middlemen appeared to facilitate lots and lots of real estate deals during a historic real estate boom, but they never geared back down so the friction persists.

unscaled 5y ago

While Japan is rife with middlemen taking the cut, 礼金 (key money) is not a good example. It goes directly to your landlord, just like your rent. Hiring in IT does have a lot of room for taking cuts. Most Japanese companies (even large ones - or rather, especially large ones) are very bad in doing their own recruiting, so they have to pay a lot of upfront fees to headhunters for every direct employee hired. This is another reason why hiring consulting staff can seem cheap on the short term.