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I worked for a company that embraced remote, distributed work long before COVID. WFH doesn’t automatically lead to outsourcing, but it does move it a lot close

I worked for a company that embraced remote, distributed work long before COVID. WFH doesn’t automatically lead to outsourcing, but it does move it a lot closer. Once the company dynamic has shifted to all communications and interactions being online, it’s very easy to add someone from a different country as long as the time zones aren’t too far apart and the logistics of employing and paying them aren’t too onerous for HR. The company I worked for eventually did ramp up foreign hiring and perform layoffs in the US. It was just too to hard to ignore the fact that they could hire 2-3 engineers in foreign countries for the same price as a single engineer in the US in many cases. Or, as they discovered, they could pay 75% of US engineer wages and still be giving someone in a foreign country top-1% compensation for their country. This made for ecstatic, hardworking, loyal foreign employees. It’s hard to ignore situations where you’re paying less and getting more. It didn’t mean that everyone in the US was laid off, though. Certain talents and specialties were still easier to find here than in foreign countries. However, I think a lot of people are in denial about how much remote work is setting the stage for a flattening of global engineering compensation. Engineers in lower comp areas will see their salaries rise as they get access to more opportunities. Engineers in higher compensation areas are going to see downward pressure on salaries as they compete on a global stage. The exception will continue to be engineers with the most in-demand skills, who were likely already competing on a global stage.

x3n0ph3n3 4y ago
I think you are overly discounting time zone. Someone working remotely, but within 3 time zones, is much easier to collaborate with than someone 9-12 timezones away.
- Mc91 4y ago
  About half the US lives in the eastern time zone - so if the product manager wants to talk to an Indian programmer at 430PM India time, he has to start the meeting at 730AM Eastern time. This is the most convenient time to have the meeting usually. Another 28% of the US is in the central time zone, but that just shifts this meeting to 830AM for the product manager. The working hours don't overlap. On top of various other problems.
  - hilbertseries 4y ago
    730 am est time is 630 am central time?
  - sokoloff 4y ago
    1630 IST is 0700 EDT right now (and 0600 EST in the winter). It’s just barely workable and takes some give and take on both sides.
  - HWR_14 4y ago
    Is 730 a time when most people want to set a meeting? I certainly wouldn't. And that means the central time zone worker is joining it at 0630 and the west coast worker is joining at 0430
- PragmaticPulp 4y ago
  From direct experience - It’s not that hard to stand up entirely separate teams and eventually entire departments in foreign countries. Communication then mostly happens by e-mail or during scheduled calls during narrow overlapping hours. You’re right that it’s far, far harder to have teams built from members in opposite time zones. However, the people pushing for fully asynchronous work environments are building company dynamics that lend themselves to being timezone agnostic, so it can be done if you want it badly enough.
- idunno246 4y ago
  outsourcing doesnt necessarily mean india/eastern europe. we had great luck with south america and they were able to work the same time. this was a few years ago, the contracting company thought we were a little abnormal at the time, but everyone put on our project went through a regular interview so they were talented, and were treated as a member of the team instead of some remote contractor.
  - mooreds 4y ago
    I co-founded a startup as the technical co-founder. Left after a few years. They leaned on a local development shop in the same town. Development shop got bought by one of their clients (not the startup). They found some developers in South America and have been using them ever since. I don't talk to the founder much, but when I do, it is clear they have no problems with remote talent (other than that they'd like to hire 1-2 more developers and are having a hard time finding them).
    - rsanek 4y ago
      > they'd like to hire 1-2 more developers and are having a hard time finding them Sound familiar? It's surprising to hear this so early in the 'remote-first' trend. I think what we'll find is that actually, there is still a dearth of top software talent (even if you include hiring worldwide). It will probably depress wages some, but not as much as people think.
- KerrAvon 4y ago
  Properly managed, a team with members in multiple time zones can be enormously productive if the work is such that it can be handled in shifts. Software can actually be done this way. You have to be culturally willing to do it.
  - spaetzleesser 4y ago
    "Properly managed, a team with members in multiple time zones can be enormously productive if the work is such that it can be handled in shifts. Software can actually be done this way. You have to be culturally willing to do it." It's horrible for the people who have to work in such a system. We have people in India and during phases where you have to collaborate a lot, either the US people or the India people have to constantly work at night. And the company demands this in addition to regular working hours. We also have people in South america and that's much better to deal with because working hours overlap during the day.
  - pydry 4y ago
    The only way I can see that working is if QA and the dev team are in separate timezones.
    - letitbeirie 4y ago
      I've done this setup and so long as your communication and expectations are lined up it's brilliant.
johnebgd 4y ago
I’ve found it’s easier to outsource maintenance and harder to outsource creation of software. Cultural issues coupled with time zone changes are difficult to overcome.
- moonchrome 4y ago
  You can work in the same time zone : - Mexico, South America are same time zones as US - as the other poster mentioned 75% US dev salary puts you in 1% in Eastern Europe, you will have no problem finding people with flexible work schedule adjusted to your TZ Cultural issues are a thing in terms of understanding the US market - but that's up to your PMs/POs to handle. Cultural differences in terms of work habits, etc. go away with good compensation (if you're willing to pay for top people).
  - Gigachad 4y ago
    I think different people have different contexts on this. If you are an American in big tech earning the highest wage, then outsourcing could look like spending 75% and still getting top talent. But for everyone else around the world, outsourcing can only mean getting the bottom talent because they were already mid tier wages. I’m in Australia and our company has mostly local with some outsourced devs in Indonesia and while they try hard, they universally just aren’t very experienced. And as soon as they become experienced they leave because they can now make the same wage as the Australian devs.
    - aussieguy1234 4y ago
      I've had similar experiences. The outsourced engineers work locally when they graduate from college (or sometimes, "coding bootcamp") until they get good experience and can match it with engineers in higher wage countries. Then they leave their home countries for the higher wages overseas. The standards of education are often lower in lower wage countries. Sometimes it'll be full college, often people will just complete a coding bootcamp then call themselves a software engineer. In other words, you get what you pay for.
  - 4y ago
tinyhouse 4y ago
This is exactly my experience and I work at a very known tech company. As a manager I was told I can hire more people outside the US and was recommended to only hire in the US if I find someone who we really don't want to pass on. In other words, top talent would be OK, everyone else would have problems. I actually don't call it outsourcing as people think about outsourcing as a way to get cheap labor in places like India or Eastern Europe. What I see happening is that companies are not looking for cheap labor. They are looking for talent and are not lowering the bar. They just prefer locations where they can afford that talent.
- PragmaticPulp 4y ago
  > As a manager I was told I can hire more people outside the US and was recommended to only hire in the US if I find someone who we really don't want to pass on. In other words, top talent would be OK, everyone else would have problems. This is exactly what it turned into for us. We were encourage to hire most people outside of the US but to leave space for exceptional US candidates. It’s a hard incentive to ignore when you can hire twice as many people within the same budget by going international remote.
  - engineerDave 4y ago
    Yup. Let's birth that baby by throwing more mothers at it.
    - engineerDave 4y ago
      apparently people haven't read the Mythical Man Month papers
  - KerrAvon 4y ago
    But that also means you have the administrative headache of dealing with tax laws and other personnel regulations in other places — is your company large enough that it’s not a problem, or do you outsource the payroll/accounting/HR aspects?
dustingetz 4y ago
yup, long run euro salaries will go up and us salaries will go down, but short run only at small companies with young agile management, so timeframe should be, rough order of magnitude, a large fraction of a business cycle (to cycle out crufty old dinos); and the true strength of tech monopolies will be tested - how long can the king defend the moat against a technologically superior army?
briHass 4y ago
The thing I never understood about this argument is that it seems to imply that working from the office makes one immune to the same outsourcing. Maybe it was kickstarted by the pandemic or maybe videoconference/remote tools finally hit the inflection point, but if outsourcing is easy enough now and is really the quality-for-cheap deal it proports to be, nobody is safe. Commuting daily to some horrific open-office and sitting there with your headphones on isn't going to save you when the beancounters see that they can get an engineer at the same level in [cheap country] for 1/3 of what you cost. Even if having an employee sitting 30ft away is worth something, as you said, is it worth being able to 'hire 2-3 engineers' for the same price?
- warning26 4y ago
  > The thing I never understood about this argument is that it seems to imply that working from the office makes one immune to the same outsourcing. They key is the lack of friction. If all the employees are in the office, your one remote outsourced person is the outlier and teams will get annoyed having to deal with that person. If everyone is already remote, then there's no pushback at all from having another remote person -- and if they're already remote, why not hire from somewhere cheaper?
  - rsanek 4y ago
    I think it comes down to, what is your time horizon? This difference may persist in the short-term, but as companies that hire remotely become more successful and profitable, we'd expect to see those that are in-office-only based in a high CoL market to be outcompeted.
- mooreds 4y ago
  > The thing I never understood about this argument is that it seems to imply that working from the office makes one immune to the same outsourcing. Communication patterns matter. In the office, much communication is implicit or at least not committed to electronic format: "hey, can we grab an hour to whiteboard some stuff?" In a fully remote environment, everything should be captured in an async friendly format. As other comments have mentioned, it's much easier to scale that communication mechanism to employees from different areas of the globe.
Clubber 4y ago
I think any company who could have and wanted to outsource has done it already. The incentives were already there and have been for 20+ years. There might be more blood to squeeze out of that rock, but not much. If anything, once companies get rid of those massive office complexes and start downsizing office space, there will be less cost incentive to outsource. Having said that, if you live in a high cost of living area, you may very well be competing with employees who live in a much cheaper state with much less harsh regulations.
samhw 4y ago
> I think a lot of people are in denial about how much remote work is setting the stage for a flattening of global engineering compensation. Thank God someone said it. I have an odd quality – among my uncountable bad qualities – that I can’t lie to myself, and Lord almighty the number is shocking of otherwise-smart engineers who are capable of virulently believing something that’s plainly wrong, when the alternative is uncountenanceable for their psyche. And yeah, the proposition “the incredibly high salaries engineers are paid (relative to the time, effort, intelligence, and miscellaneous skill demanded to pick up the metier) are a historical bubble – albeit a long one – and will not continue for our lifetimes” is without a doubt one such belief. People have different ways of rationalising their refusal to accept it, mostly either (a) that it’s gone on for decades already / you naysayers have been saying this for decades already[0] /c or (b) some miscellaneous argument for why our job is uniquely insusceptible of possibly being done by an Indian despite the evidence thereof (my favourite is the “but who will train the [robots/Indians/c]?”, as if self-hosting Indians will take centuries to be invented), but either way everyone has a reason. That old cliché that ‘it\’s difficult to get a man to understand something when his salary depends upon his not understanding it’ has never made so much sense to me as when I first asked this question. [0] This is a weirdly tropical fallacy used to reject all manner of things. “Millennials are lazy/disrespectful/entitled/&c.” “Oh yeah? Well, people have been saying that kids are lazy/disrespectful/entitled for centuries!”

x3n0ph3n3 4y ago

I think you are overly discounting time zone. Someone working remotely, but within 3 time zones, is much easier to collaborate with than someone 9-12 timezones away.

Mc91 4y ago
About half the US lives in the eastern time zone - so if the product manager wants to talk to an Indian programmer at 430PM India time, he has to start the meeting at 730AM Eastern time. This is the most convenient time to have the meeting usually. Another 28% of the US is in the central time zone, but that just shifts this meeting to 830AM for the product manager. The working hours don't overlap. On top of various other problems.
- hilbertseries 4y ago
  730 am est time is 630 am central time?
- sokoloff 4y ago
  1630 IST is 0700 EDT right now (and 0600 EST in the winter). It’s just barely workable and takes some give and take on both sides.
- HWR_14 4y ago
  Is 730 a time when most people want to set a meeting? I certainly wouldn't. And that means the central time zone worker is joining it at 0630 and the west coast worker is joining at 0430
PragmaticPulp 4y ago
From direct experience - It’s not that hard to stand up entirely separate teams and eventually entire departments in foreign countries. Communication then mostly happens by e-mail or during scheduled calls during narrow overlapping hours. You’re right that it’s far, far harder to have teams built from members in opposite time zones. However, the people pushing for fully asynchronous work environments are building company dynamics that lend themselves to being timezone agnostic, so it can be done if you want it badly enough.
idunno246 4y ago
outsourcing doesnt necessarily mean india/eastern europe. we had great luck with south america and they were able to work the same time. this was a few years ago, the contracting company thought we were a little abnormal at the time, but everyone put on our project went through a regular interview so they were talented, and were treated as a member of the team instead of some remote contractor.
- mooreds 4y ago
  I co-founded a startup as the technical co-founder. Left after a few years. They leaned on a local development shop in the same town. Development shop got bought by one of their clients (not the startup). They found some developers in South America and have been using them ever since. I don't talk to the founder much, but when I do, it is clear they have no problems with remote talent (other than that they'd like to hire 1-2 more developers and are having a hard time finding them).
  - rsanek 4y ago
    > they'd like to hire 1-2 more developers and are having a hard time finding them Sound familiar? It's surprising to hear this so early in the 'remote-first' trend. I think what we'll find is that actually, there is still a dearth of top software talent (even if you include hiring worldwide). It will probably depress wages some, but not as much as people think.
KerrAvon 4y ago
Properly managed, a team with members in multiple time zones can be enormously productive if the work is such that it can be handled in shifts. Software can actually be done this way. You have to be culturally willing to do it.
- spaetzleesser 4y ago
  "Properly managed, a team with members in multiple time zones can be enormously productive if the work is such that it can be handled in shifts. Software can actually be done this way. You have to be culturally willing to do it." It's horrible for the people who have to work in such a system. We have people in India and during phases where you have to collaborate a lot, either the US people or the India people have to constantly work at night. And the company demands this in addition to regular working hours. We also have people in South america and that's much better to deal with because working hours overlap during the day.
- pydry 4y ago
  The only way I can see that working is if QA and the dev team are in separate timezones.
  - letitbeirie 4y ago
    I've done this setup and so long as your communication and expectations are lined up it's brilliant.

johnebgd 4y ago

I’ve found it’s easier to outsource maintenance and harder to outsource creation of software. Cultural issues coupled with time zone changes are difficult to overcome.

moonchrome 4y ago
You can work in the same time zone : - Mexico, South America are same time zones as US - as the other poster mentioned 75% US dev salary puts you in 1% in Eastern Europe, you will have no problem finding people with flexible work schedule adjusted to your TZ Cultural issues are a thing in terms of understanding the US market - but that's up to your PMs/POs to handle. Cultural differences in terms of work habits, etc. go away with good compensation (if you're willing to pay for top people).
- Gigachad 4y ago
  I think different people have different contexts on this. If you are an American in big tech earning the highest wage, then outsourcing could look like spending 75% and still getting top talent. But for everyone else around the world, outsourcing can only mean getting the bottom talent because they were already mid tier wages. I’m in Australia and our company has mostly local with some outsourced devs in Indonesia and while they try hard, they universally just aren’t very experienced. And as soon as they become experienced they leave because they can now make the same wage as the Australian devs.
  - aussieguy1234 4y ago
    I've had similar experiences. The outsourced engineers work locally when they graduate from college (or sometimes, "coding bootcamp") until they get good experience and can match it with engineers in higher wage countries. Then they leave their home countries for the higher wages overseas. The standards of education are often lower in lower wage countries. Sometimes it'll be full college, often people will just complete a coding bootcamp then call themselves a software engineer. In other words, you get what you pay for.
- 4y ago

tinyhouse 4y ago

This is exactly my experience and I work at a very known tech company. As a manager I was told I can hire more people outside the US and was recommended to only hire in the US if I find someone who we really don't want to pass on. In other words, top talent would be OK, everyone else would have problems. I actually don't call it outsourcing as people think about outsourcing as a way to get cheap labor in places like India or Eastern Europe. What I see happening is that companies are not looking for cheap labor. They are looking for talent and are not lowering the bar. They just prefer locations where they can afford that talent.

PragmaticPulp 4y ago
> As a manager I was told I can hire more people outside the US and was recommended to only hire in the US if I find someone who we really don't want to pass on. In other words, top talent would be OK, everyone else would have problems. This is exactly what it turned into for us. We were encourage to hire most people outside of the US but to leave space for exceptional US candidates. It’s a hard incentive to ignore when you can hire twice as many people within the same budget by going international remote.
- engineerDave 4y ago
  Yup. Let's birth that baby by throwing more mothers at it.
  - engineerDave 4y ago
    apparently people haven't read the Mythical Man Month papers
- KerrAvon 4y ago
  But that also means you have the administrative headache of dealing with tax laws and other personnel regulations in other places — is your company large enough that it’s not a problem, or do you outsource the payroll/accounting/HR aspects?

dustingetz 4y ago

yup, long run euro salaries will go up and us salaries will go down, but short run only at small companies with young agile management, so timeframe should be, rough order of magnitude, a large fraction of a business cycle (to cycle out crufty old dinos); and the true strength of tech monopolies will be tested - how long can the king defend the moat against a technologically superior army?

briHass 4y ago

The thing I never understood about this argument is that it seems to imply that working from the office makes one immune to the same outsourcing. Maybe it was kickstarted by the pandemic or maybe videoconference/remote tools finally hit the inflection point, but if outsourcing is easy enough now and is really the quality-for-cheap deal it proports to be, nobody is safe. Commuting daily to some horrific open-office and sitting there with your headphones on isn't going to save you when the beancounters see that they can get an engineer at the same level in [cheap country] for 1/3 of what you cost. Even if having an employee sitting 30ft away is worth something, as you said, is it worth being able to 'hire 2-3 engineers' for the same price?

warning26 4y ago
> The thing I never understood about this argument is that it seems to imply that working from the office makes one immune to the same outsourcing. They key is the lack of friction. If all the employees are in the office, your one remote outsourced person is the outlier and teams will get annoyed having to deal with that person. If everyone is already remote, then there's no pushback at all from having another remote person -- and if they're already remote, why not hire from somewhere cheaper?
- rsanek 4y ago
  I think it comes down to, what is your time horizon? This difference may persist in the short-term, but as companies that hire remotely become more successful and profitable, we'd expect to see those that are in-office-only based in a high CoL market to be outcompeted.
mooreds 4y ago
> The thing I never understood about this argument is that it seems to imply that working from the office makes one immune to the same outsourcing. Communication patterns matter. In the office, much communication is implicit or at least not committed to electronic format: "hey, can we grab an hour to whiteboard some stuff?" In a fully remote environment, everything should be captured in an async friendly format. As other comments have mentioned, it's much easier to scale that communication mechanism to employees from different areas of the globe.

Clubber 4y ago

I think any company who could have and wanted to outsource has done it already. The incentives were already there and have been for 20+ years. There might be more blood to squeeze out of that rock, but not much. If anything, once companies get rid of those massive office complexes and start downsizing office space, there will be less cost incentive to outsource. Having said that, if you live in a high cost of living area, you may very well be competing with employees who live in a much cheaper state with much less harsh regulations.

samhw 4y ago

> I think a lot of people are in denial about how much remote work is setting the stage for a flattening of global engineering compensation. Thank God someone said it. I have an odd quality – among my uncountable bad qualities – that I can’t lie to myself, and Lord almighty the number is shocking of otherwise-smart engineers who are capable of virulently believing something that’s plainly wrong, when the alternative is uncountenanceable for their psyche. And yeah, the proposition “the incredibly high salaries engineers are paid (relative to the time, effort, intelligence, and miscellaneous skill demanded to pick up the metier) are a historical bubble – albeit a long one – and will not continue for our lifetimes” is without a doubt one such belief. People have different ways of rationalising their refusal to accept it, mostly either (a) that it’s gone on for decades already / you naysayers have been saying this for decades already[0] /c or (b) some miscellaneous argument for why our job is uniquely insusceptible of possibly being done by an Indian despite the evidence thereof (my favourite is the “but who will train the [robots/Indians/c]?”, as if self-hosting Indians will take centuries to be invented), but either way everyone has a reason. That old cliché that ‘it\’s difficult to get a man to understand something when his salary depends upon his not understanding it’ has never made so much sense to me as when I first asked this question. [0] This is a weirdly tropical fallacy used to reject all manner of things. “Millennials are lazy/disrespectful/entitled/&c.” “Oh yeah? Well, people have been saying that kids are lazy/disrespectful/entitled for centuries!”