7 ms·

Ok let me make a probably very unpopular comment here: their 3rd point lists "companies benchmarking against all regional or global companies" but in fact what

by ido 4y ago

Ok let me make a probably very unpopular comment here: their 3rd point lists "companies benchmarking against all regional or global companies" but in fact what they mean is "companies benchmarking against the highest paying US tech hubs". I assure you "all regional or global companies" also include Vietnamese companies paying junior devs $300 per month - what is the advantage of the European engineer that is worth paying >=10x as much? If you're comparing globally you can't cherry pick only the best paying regions because these are not your only competition. And there are a hell of a lot more Bangladeshi, Vietnamese & Nigerians than there are people living in SFBA or Seattle, and if you're truly competing globally you're also competing with them.

wyager 4y ago
> what is the advantage of the European engineer that is worth paying >=10x as much? They produce better product.
- ido 4y ago
  Maybe they do, maybe not? I mean that is exactly the same argument SFBA-based engineers can also claim. I believe it is mostly untrue. When I studied in Vienna a fellow student of mine returned to Poland after uni because his wife wanted to & we both started our first jobs as juniors at the same time with comparable positions, me in Vienna and him in Gdansk. His salary was almost exactly 1/3 of mine & I don't believe there was any performance component to that, I was simply earning according to Viennese standards and he according to Gdansk standards.
  - moonchrome 4y ago
    In more recent times (especially post COVID), by the time both of you are competent enough be independent he will be earning as much as you for 1/3 cost of living.
    - ido 4y ago
      Cost of living in Poland is not actually 1/3 of Austria, the difference in cost is much smaller than in salary. But it's true that the more senior you are the less geography affects your wage.
      - moonchrome 4y ago
        Austria != Vienna, similar to how London != UK. Equating for standard of living (eg upper middle class) you'll likely be 3x in Vienna. Although I'm just guestinating on Gdansk, maybe it's a really expensive place.
        ido 4y ago
        Austria is a lot less variable than the UK, and Vienna is not really the most expensive city there at all (generally the further west you go the more expensive it gets). I'm pretty sure a lot of the smaller cities like Salzburg and Innsbruck are actually more expensive than Vienna and not at all certain Vienna is much or at all above the Austrian average (or at least urban average).
        yrgulation 4y ago
        With the risk of sounding rude i am not even sure why austria is part of this debate as its totally irrelevant on the tech scene.
        ido 4y ago
        It’s simply a Westen European country I lived in, sorry I never lived and went to Uni + worked in the Netherlands to give a more topical example. My point was that borders are unfair in terms of compensation not just to Western Europeans but to a lot(most?) other people in the world outside [west coast/big city) Americans. And that true globalization will equalize things not only upward.
        4y ago
  - rocgf 4y ago
    Your example is anectodal, hence basically worthless. There is a lot of inefficieny in the market, some of it inherent, some of it due to artifical constraints like location, but over time those tend to naturally get normalized. What I'm trying to say is that if it really were better for software to be built in Vietnam for 10% of the cost, that would just happen. It may be that companies have not figured out this neat trick or it might be that there are some inherent issues with developing software based purely on the cost.
    - ido 4y ago
      My point was that this applies exactly the same for why European salaries are lower than American salaries. It makes no sense but it equally doesn't make sense that Europeans earn more than Asians or Africans. If you want equality it doesn't just mean you get to equalize with the top end, it also means the bottom gets to equalize with you.
    - sealeck 4y ago
      lmao the free market does not exist.
  - 988747 4y ago
    How long ago was that? Are you guys still in touch? Because it seems to me that recently developer salaries in Poland matched or even surpassed those in Austria :)
    - ido 4y ago
      It was maybe 15 years ago, but today instead of Poland it would be some poor Asian country. My point is that it's not just that Europeans earn less than Americans, they also earn more than other regions. If you want fairness that also applies to people under you, not just people above you.
    - sealeck 4y ago
      I don't think this is likely to be true at a population level; Austria is a much richer country than Poland; has a much higher standard of education and in other sectors salaries are usually higher in Austria than Poland.
      - 988747 4y ago
        Agree that this isn't likely to be true at population level - I was talking about Software Developers specifically. Disagree on "much higher standard of education" - even if Austria comes on top, it's just barely, not by a lot.
        yrgulation 4y ago
        I dont know where op gets their stats but pay in austria is by no means competitive. I know of a romanian dude who interviewed for a company there. Pompous session, ties, suit and the stench of a rigid hierarchy. Once they made their offer he laughed and told them he’d earn twice as much for the same (tech) job in romania. Perhaps an isolated case but DACH countries have an inflated sense of superiority not matching reality, at least in software tech. Interestingly i see many of them crapping on east europeans on this forum. Perhaps due to a sense of insecurity, but would be interesting if someone pulled some stats on how often they pull the east european “poverty” or “corruption” card out of their behind.
yakak 4y ago
This isn't really directly true. A global company manager is not allowed to balance salary accounts and is usually given rules where US/Canada/western Europe are the same one head count and other countries are multiples according to typical comparative cost. The end result is that many jobs don't get opened at all in Europe but the ones that do tend closer toward US rates as this is what they were planning to pay but could not find the one high cost head the manager wanted.
Ozzie_osman 4y ago
So my read of the second and third groups was that the companies are being competitive against the top of that range (vs the first group that is just benchmarking against local peers). If I'm competing to win a competition, it doesn't matter how low the lowest performer is. It does matter who the highest performers are. So I feel like you may have just read the definition incorrectly (granted article could also have been more clear).
TulliusCicero 4y ago
Winning a competition means beating people at the top of a range, not the dregs. Implicit here in benchmarking globally is that you want the kind of devs that can move around globally. The engineers working at Vietnamese companies for $300/month aren't that.
- kingkawn 4y ago
  Niiiice calling people from poor countries “the dregs”
  - pedrosorio 4y ago
    The competition is among companies (and the salary they are willing to pay to attract devs), so "the dregs" are the companies paying those salaries, not the devs.
    - abduhl 4y ago
      This is a VERY charitable reading of the GP’s post. They mention beating “people” not companies and talk about “the kind of devs that can move around.”
  - ctvo 4y ago
    The dregs, as in the bottom of the barrel, of the global developer salary band. There’s no need to jump to the conclusion that it’s a judgement on the country itself and look for something to be offended by. Due to current events someone could say the dregs of reproductive rights include the USA. They’re not making a value judgement on the entire country.
- ido 4y ago
  I know we all want to believe we're the next Carmack but if there's a ton of solid engineers willing to work for a lot less money than you & at the same time global barriers drop that means downwards pressure from lower cost countries and upwards pressure from higher cost countries. I think the last decade or so was an anomaly due to the asset bubble inflating how much money (and how cheap that money was) tech companies had to spend.
varispeed 4y ago
> what is the advantage of the European engineer that is worth paying >=10x as much? It is very simple - cost of insurance. It is much easier to persuade a worker making $300 a month to leak company secrets than someone making $20k a month. Plus workers in such countries may be incentivised (or have no choice but to do it) to spy on behalf of their government. If your company is doing something remotely serious, you can be almost certain someone you don't want will get hold of your IP.
- acchow 4y ago
  This makes no sense. If you want to pay to keep secrecy, why not just raise their salary by 9x to keep them quiet?
- logifail 4y ago
  > If your company is doing something remotely serious [..] (Sorry I have to ask this) but what types of companies are you talking about? Uber? Netflix? Spotify? For those maybe, just maybe, the secret sauce isn't actually secret any more, it was simply cheap VC money subsidising all our rides/viewing/listening.[0][1][2][3] [0] https://slate.com/business/2022/05/uber-subsidy-lyft-cheap-rides.html https://slate.com/business/2022/05/uber-subsidy-lyft-cheap-r... [1] https://financialpost.com/investing/investing-pro/investors-have-subsidized-our-uber-rides-spotify-tunes-and-netflix-bingeing-but-maybe-not-for-much-longer https://financialpost.com/investing/investing-pro/investors-... [2] https://www.nytimes.com/2021/06/08/technology/farewell-millennial-lifestyle-subsidy.html https://www.nytimes.com/2021/06/08/technology/farewell-mille... [3] https://www.latimes.com/business/technology/la-fi-tn-uber-ipo-lyft-fare-increase-20190511-story.html https://www.latimes.com/business/technology/la-fi-tn-uber-ip...
siva7 4y ago
If you think a dev is a code monkey then yes, it doesn’t matter if you hire someone from vietnam or seattle for your US business. If you’re actually looking for a software engineer then i have bad news for you: professional software development is all about communication (with customers, requirements engineers, other developers and so on). That’s why you are paying them ten times more, so they have a chance to understand your business domain and can consult you on technical decisions. Otherwise every manager and business owner on earth, including me, would hire just the Vietnamese dev instead of the 10 times more expensive US dev.
- ido 4y ago
  So you’re saying the Dutch in the article shouldn’t complain that they earn less than Americans then?
  - siva7 4y ago
    The dutch isn’t earning ten times less than the average US developer. At best two times less, but that’s it (and FAANG salaries in US tech hubs are in no way representative for average US dev salaries)
    - ido 4y ago
      But it’s exactly the same type of complaint “salaries in SFBA are higher for the same job in Amsterdam”, why shouldn’t a Pakistani dev level the same complain about developers in Amsterdam?
      - siva7 4y ago
        For the same reason i outlined above: communication. Different time zones, language barriers, cultural barriers and so on. The communication between the SFBA and amsterdam team may still be easier due to more similiar cultures than between SFBA and pakistan.
- bluepizza 4y ago
  Even local subcontracting is quite difficult due to communication lines. I’ve worked with very talented offshore developers. They had good English, good CS knowledge, and good work ethics. Results were always crap anyway. And their number one complaint was always “they don’t tell us enough, and we have to guess things”.
breadloaf 4y ago
Well that really depends. I was outsourcing to India when it was still cheap. I probably did something wrong, but I provided definition of the project, set of unit tests and access to git repository so they can upload the result. I got completely useless trash code, incoherent excuses and wasted time. I paid the company for their "work" and never considered outsourcing again. Sometimes cheap means horrendously expensive.
- sumedh 4y ago
  How did you select the outsourcing company?
  - breadloaf 4y ago
    7 years ago, I don't really remember anymore.
- mlboss 4y ago
  Any developer charging $3k will not be good. And even then you need to pay lot of attention on how they are doing.
- bilekas 4y ago
  This might get a bad rep but I've had this experience too. It's not a blanket statement though. Outsourcing is fine but you definitely have need to do your homework. That's why you see a few of the outsourcing companies being bought over by their employers, because they're good. Out of curiosity and related to another HN topic, have you ever hired freelancers directly?
  - breadloaf 4y ago
    I tried to on the Upwork. But it is really hit or miss there. 1. I got hardware electric engineer to help me with a design of PCB. Guy was worth every cent. 2. Got embedded developer on separate project. Guy pretended that he can do a lot. I tried to explain to him, that I need a USB CDC device driver in MCU which has USB PHY and I want Windows to recognize and use usbser.sys (generic COM driver) or something similar. He told me that he understand what he is doing, I sent him the dev kit and then he ghosted me and I have ended up doing it myself with TinyUSB. So as I said, really hit and miss on Upwork. Some people are writing lofty skillset so they can get more per hour and then failing miserably.
lordnacho 4y ago
In my line of work, there are actually a bunch of Vietnamese guys making Western level quant trader type salaries, living in small castles in their home country. The thing is, you can't suppress the wages unilaterally for someone who knows how to do things. There's always going to be some other firm offering them a similar deal, with the same capital (equipment, IP, support, trading capital etc) for them to use. So even if you know they only need a tenth of what a Western quant needs to live well, you can't just offer them that, they will end up taking an offer very similar to what they'd get if they moved to NYC or London. The $300 people are victims of supply and demand. Often it's cookie-cutter type contract work that many people know how to do, and the real problem they have as a supplier of that knowledge is how to get in the front of the queue to be the guy to help a western small-time entrepreneur build his website. When this is the case, the organiser, basically the owner of the outsourcing company, has all the negotiating leverage and sets the price accordingly. The difference is that the firm with very specifically exploitable capital needs specific knowledge to operate that capital. You need devs with certain skills, and there's only so many of them, especially as your process gives a lot of false negatives. As such devs are rarely identified, you are wasting a lot of money not splitting the pie generously when you find one. I was talking to someone the other day and the agent told me there were 40 candidates interviewed for three roles, which is a huge amount as I had 5 one-on-ones plus a takehome. Firms that don't really have anything special will not pay anything special, in relation to where the employee is based.

by ido 4y ago

wyager 4y ago

> what is the advantage of the European engineer that is worth paying >=10x as much? They produce better product.

ido 4y ago
Maybe they do, maybe not? I mean that is exactly the same argument SFBA-based engineers can also claim. I believe it is mostly untrue. When I studied in Vienna a fellow student of mine returned to Poland after uni because his wife wanted to & we both started our first jobs as juniors at the same time with comparable positions, me in Vienna and him in Gdansk. His salary was almost exactly 1/3 of mine & I don't believe there was any performance component to that, I was simply earning according to Viennese standards and he according to Gdansk standards.
- moonchrome 4y ago
  In more recent times (especially post COVID), by the time both of you are competent enough be independent he will be earning as much as you for 1/3 cost of living.
  - ido 4y ago
    Cost of living in Poland is not actually 1/3 of Austria, the difference in cost is much smaller than in salary. But it's true that the more senior you are the less geography affects your wage.
    - moonchrome 4y ago
      Austria != Vienna, similar to how London != UK. Equating for standard of living (eg upper middle class) you'll likely be 3x in Vienna. Although I'm just guestinating on Gdansk, maybe it's a really expensive place.
      - ido 4y ago
        Austria is a lot less variable than the UK, and Vienna is not really the most expensive city there at all (generally the further west you go the more expensive it gets). I'm pretty sure a lot of the smaller cities like Salzburg and Innsbruck are actually more expensive than Vienna and not at all certain Vienna is much or at all above the Austrian average (or at least urban average).
        yrgulation 4y ago
        With the risk of sounding rude i am not even sure why austria is part of this debate as its totally irrelevant on the tech scene.
        ido 4y ago
        It’s simply a Westen European country I lived in, sorry I never lived and went to Uni + worked in the Netherlands to give a more topical example. My point was that borders are unfair in terms of compensation not just to Western Europeans but to a lot(most?) other people in the world outside [west coast/big city) Americans. And that true globalization will equalize things not only upward.
        4y ago
- rocgf 4y ago
  Your example is anectodal, hence basically worthless. There is a lot of inefficieny in the market, some of it inherent, some of it due to artifical constraints like location, but over time those tend to naturally get normalized. What I'm trying to say is that if it really were better for software to be built in Vietnam for 10% of the cost, that would just happen. It may be that companies have not figured out this neat trick or it might be that there are some inherent issues with developing software based purely on the cost.
  - ido 4y ago
    My point was that this applies exactly the same for why European salaries are lower than American salaries. It makes no sense but it equally doesn't make sense that Europeans earn more than Asians or Africans. If you want equality it doesn't just mean you get to equalize with the top end, it also means the bottom gets to equalize with you.
  - sealeck 4y ago
    lmao the free market does not exist.
- 988747 4y ago
  How long ago was that? Are you guys still in touch? Because it seems to me that recently developer salaries in Poland matched or even surpassed those in Austria :)
  - ido 4y ago
    It was maybe 15 years ago, but today instead of Poland it would be some poor Asian country. My point is that it's not just that Europeans earn less than Americans, they also earn more than other regions. If you want fairness that also applies to people under you, not just people above you.
  - sealeck 4y ago
    I don't think this is likely to be true at a population level; Austria is a much richer country than Poland; has a much higher standard of education and in other sectors salaries are usually higher in Austria than Poland.
    - 988747 4y ago
      Agree that this isn't likely to be true at population level - I was talking about Software Developers specifically. Disagree on "much higher standard of education" - even if Austria comes on top, it's just barely, not by a lot.
      - yrgulation 4y ago
        I dont know where op gets their stats but pay in austria is by no means competitive. I know of a romanian dude who interviewed for a company there. Pompous session, ties, suit and the stench of a rigid hierarchy. Once they made their offer he laughed and told them he’d earn twice as much for the same (tech) job in romania. Perhaps an isolated case but DACH countries have an inflated sense of superiority not matching reality, at least in software tech. Interestingly i see many of them crapping on east europeans on this forum. Perhaps due to a sense of insecurity, but would be interesting if someone pulled some stats on how often they pull the east european “poverty” or “corruption” card out of their behind.

yakak 4y ago

This isn't really directly true. A global company manager is not allowed to balance salary accounts and is usually given rules where US/Canada/western Europe are the same one head count and other countries are multiples according to typical comparative cost. The end result is that many jobs don't get opened at all in Europe but the ones that do tend closer toward US rates as this is what they were planning to pay but could not find the one high cost head the manager wanted.

Ozzie_osman 4y ago

So my read of the second and third groups was that the companies are being competitive against the top of that range (vs the first group that is just benchmarking against local peers). If I'm competing to win a competition, it doesn't matter how low the lowest performer is. It does matter who the highest performers are. So I feel like you may have just read the definition incorrectly (granted article could also have been more clear).

TulliusCicero 4y ago

Winning a competition means beating people at the top of a range, not the dregs. Implicit here in benchmarking globally is that you want the kind of devs that can move around globally. The engineers working at Vietnamese companies for $300/month aren't that.

kingkawn 4y ago
Niiiice calling people from poor countries “the dregs”
- pedrosorio 4y ago
  The competition is among companies (and the salary they are willing to pay to attract devs), so "the dregs" are the companies paying those salaries, not the devs.
  - abduhl 4y ago
    This is a VERY charitable reading of the GP’s post. They mention beating “people” not companies and talk about “the kind of devs that can move around.”
- ctvo 4y ago
  The dregs, as in the bottom of the barrel, of the global developer salary band. There’s no need to jump to the conclusion that it’s a judgement on the country itself and look for something to be offended by. Due to current events someone could say the dregs of reproductive rights include the USA. They’re not making a value judgement on the entire country.
ido 4y ago
I know we all want to believe we're the next Carmack but if there's a ton of solid engineers willing to work for a lot less money than you & at the same time global barriers drop that means downwards pressure from lower cost countries and upwards pressure from higher cost countries. I think the last decade or so was an anomaly due to the asset bubble inflating how much money (and how cheap that money was) tech companies had to spend.

varispeed 4y ago

> what is the advantage of the European engineer that is worth paying >=10x as much? It is very simple - cost of insurance. It is much easier to persuade a worker making $300 a month to leak company secrets than someone making $20k a month. Plus workers in such countries may be incentivised (or have no choice but to do it) to spy on behalf of their government. If your company is doing something remotely serious, you can be almost certain someone you don't want will get hold of your IP.

acchow 4y ago
This makes no sense. If you want to pay to keep secrecy, why not just raise their salary by 9x to keep them quiet?
logifail 4y ago
> If your company is doing something remotely serious [..] (Sorry I have to ask this) but what types of companies are you talking about? Uber? Netflix? Spotify? For those maybe, just maybe, the secret sauce isn't actually secret any more, it was simply cheap VC money subsidising all our rides/viewing/listening.[0][1][2][3] [0] https://slate.com/business/2022/05/uber-subsidy-lyft-cheap-rides.html https://slate.com/business/2022/05/uber-subsidy-lyft-cheap-r... [1] https://financialpost.com/investing/investing-pro/investors-have-subsidized-our-uber-rides-spotify-tunes-and-netflix-bingeing-but-maybe-not-for-much-longer https://financialpost.com/investing/investing-pro/investors-... [2] https://www.nytimes.com/2021/06/08/technology/farewell-millennial-lifestyle-subsidy.html https://www.nytimes.com/2021/06/08/technology/farewell-mille... [3] https://www.latimes.com/business/technology/la-fi-tn-uber-ipo-lyft-fare-increase-20190511-story.html https://www.latimes.com/business/technology/la-fi-tn-uber-ip...

siva7 4y ago

If you think a dev is a code monkey then yes, it doesn’t matter if you hire someone from vietnam or seattle for your US business. If you’re actually looking for a software engineer then i have bad news for you: professional software development is all about communication (with customers, requirements engineers, other developers and so on). That’s why you are paying them ten times more, so they have a chance to understand your business domain and can consult you on technical decisions. Otherwise every manager and business owner on earth, including me, would hire just the Vietnamese dev instead of the 10 times more expensive US dev.

ido 4y ago
So you’re saying the Dutch in the article shouldn’t complain that they earn less than Americans then?
- siva7 4y ago
  The dutch isn’t earning ten times less than the average US developer. At best two times less, but that’s it (and FAANG salaries in US tech hubs are in no way representative for average US dev salaries)
  - ido 4y ago
    But it’s exactly the same type of complaint “salaries in SFBA are higher for the same job in Amsterdam”, why shouldn’t a Pakistani dev level the same complain about developers in Amsterdam?
    - siva7 4y ago
      For the same reason i outlined above: communication. Different time zones, language barriers, cultural barriers and so on. The communication between the SFBA and amsterdam team may still be easier due to more similiar cultures than between SFBA and pakistan.
bluepizza 4y ago
Even local subcontracting is quite difficult due to communication lines. I’ve worked with very talented offshore developers. They had good English, good CS knowledge, and good work ethics. Results were always crap anyway. And their number one complaint was always “they don’t tell us enough, and we have to guess things”.

breadloaf 4y ago

Well that really depends. I was outsourcing to India when it was still cheap. I probably did something wrong, but I provided definition of the project, set of unit tests and access to git repository so they can upload the result. I got completely useless trash code, incoherent excuses and wasted time. I paid the company for their "work" and never considered outsourcing again. Sometimes cheap means horrendously expensive.

sumedh 4y ago
How did you select the outsourcing company?
- breadloaf 4y ago
  7 years ago, I don't really remember anymore.
mlboss 4y ago
Any developer charging $3k will not be good. And even then you need to pay lot of attention on how they are doing.
bilekas 4y ago
This might get a bad rep but I've had this experience too. It's not a blanket statement though. Outsourcing is fine but you definitely have need to do your homework. That's why you see a few of the outsourcing companies being bought over by their employers, because they're good. Out of curiosity and related to another HN topic, have you ever hired freelancers directly?
- breadloaf 4y ago
  I tried to on the Upwork. But it is really hit or miss there. 1. I got hardware electric engineer to help me with a design of PCB. Guy was worth every cent. 2. Got embedded developer on separate project. Guy pretended that he can do a lot. I tried to explain to him, that I need a USB CDC device driver in MCU which has USB PHY and I want Windows to recognize and use usbser.sys (generic COM driver) or something similar. He told me that he understand what he is doing, I sent him the dev kit and then he ghosted me and I have ended up doing it myself with TinyUSB. So as I said, really hit and miss on Upwork. Some people are writing lofty skillset so they can get more per hour and then failing miserably.

lordnacho 4y ago

In my line of work, there are actually a bunch of Vietnamese guys making Western level quant trader type salaries, living in small castles in their home country. The thing is, you can't suppress the wages unilaterally for someone who knows how to do things. There's always going to be some other firm offering them a similar deal, with the same capital (equipment, IP, support, trading capital etc) for them to use. So even if you know they only need a tenth of what a Western quant needs to live well, you can't just offer them that, they will end up taking an offer very similar to what they'd get if they moved to NYC or London. The $300 people are victims of supply and demand. Often it's cookie-cutter type contract work that many people know how to do, and the real problem they have as a supplier of that knowledge is how to get in the front of the queue to be the guy to help a western small-time entrepreneur build his website. When this is the case, the organiser, basically the owner of the outsourcing company, has all the negotiating leverage and sets the price accordingly. The difference is that the firm with very specifically exploitable capital needs specific knowledge to operate that capital. You need devs with certain skills, and there's only so many of them, especially as your process gives a lot of false negatives. As such devs are rarely identified, you are wasting a lot of money not splitting the pie generously when you find one. I was talking to someone the other day and the agent told me there were 40 candidates interviewed for three roles, which is a huge amount as I had 5 one-on-ones plus a takehome. Firms that don't really have anything special will not pay anything special, in relation to where the employee is based.