Software Engineer: $7,000 a year in China, $8,400 in India... $90,000 in U.S.

kmiklas said:
You may need to hire one crackerjack Sr. SE in the U.S. for USD200k+, but then hire ten offshore guys as USD20k to follow that person's instruction.

Cost analysis:

OPTION 1: Offshore with U.S.-based lead SE:
Code: 
$200,000: 1 @ 200k: 1 US-based Sr. Software Engineer (tech lead)
$90,000: 6 @ 15k: Six offshore mid-level programmers
------------
$290,000 Total


OPTION 2: All U.S. based onshore talent:
Code: 
$200,000: 1 @ 200k: 1 US-based Sr. Software Engineer (tech lead)
$540,000: 6 @ 90k: 6 US-based mid-level programmers
-----------
$740,000 Total

Cost savings: $450,000

Option 1 is almost 1/3rd the cost, with comparable results. No-brainer.
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This is exactly why management by Excel is so dangerous. Without thorough understanding what your business is, it's easy to assume offshore people can replace in-house domain experts. If that were truly so, if your business needs are truly so simple and shallow, then you're probably better off buying off-the shelf products and renting cloud services that do the business for you. But then again, why wouldn't someone else do that and already be serving your customers, or even take over your business if it proves worthwhile?

In reality, you don't know where your business will be going in the future, and thus, you don't know where IT will go either. In order to accomodate for survival and thriving in that inevitable future, you need the right people by your side, not on another contintent browsing for better job offers and doing multiple projects simultaneously! Without that competence, the risk is simply too high for most established companies.

Agile is often misapplied, but the manifesto got many good points on exactly this, alas will continue to be misunderstood as most people lack experience with true collaborative innovation, for which the currently repressive incentive structures are all opposite!
 
You also need to consider that good coders who work remotely know that they can compete with US talent and they're going to demand similar wages. If they don't, it's most likely that they either don't have the experience to back up their wage demands or they just flat out know they're not worth it. Employers will scrutinize their productivity much more if they're asking for near US wages. If they demand near US wage, then they need to produce. On the other hand, an employer is willing to ignore poor productivity because it comes at a low cost and when they live in a low cost area, it works out -- they don't produce much, they're making a good wage (for their area), and their employer doesn't question their productivity because they're so cheap.

The other thing to note is that you do not always get what you pay for. There's plenty of shitty developers asking for high rates and you won't necessarily know until you see them perform. I've dealt with a well paid developer who was a net loss for the team -- honestly, he was producing negative value. Getting rid of him actually improved our productivity (because as a team we no longer had to waste time in meetings listening to his excuses for not getting things done, jump around technical hurdles that he introduced/insisted we needed that were ultimately of no benefit to the project, but he went through with them anyway, and otherwise introduced problems for the team as a whole).

The point is, some posters have commented that a bad developer can be a net negative and that a good developer can be 10x-20x as productive as a bad developer. I'm not sure what the actual ratio is, but bad developers really can be a net loss, so when you have a range of net loss through super productive, you can get some impressive ratios.

Having said all of that, I'm not suggesting you should never hire offshore. For the current company I work for, half the developers are outside the US (they're paid US wages though).
 
JSOP said:
A NANNY (I assume is a legal US resident/citizen) makes $75K??!!! 83% of the salary of a SE who's just incurred a six-figure student loan after spending FOUR years in a CS program??!! That's ridiculous!! What's the point of working if you are going to just give 83% of your salary to somebody who looks after your kids? That's almost like working for free!!! No wonder the Californians hate Trump so much for wanting to build that wall forbidding illegal aliens from entering USA. LOL

On the other hand those software companies REALLY should allow their workers to work from home. That way they will be able to get more value out of their super-expensive house/apartment and at the same time save on nanny cost.
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I do (let my devs mostly work from home). You've got an excellent point, I don't see why more managers don't see it.
 
Sig said:
I do (let my devs mostly work from home). You've got an excellent point, I don't see why more managers don't see it.
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And/or rent apartments or houses by the blocks for the workers that you need to keep close to the company for face-to-face collaboration. It would be so inefficient for each worker to rent units on their own but if a big company like Google is able to rent a block of housing for the workers, they would be able to do it lot cheaper due to economies of scale. With all the profit that they are making, I think they can spare some to find some places for their workers to live in?
 
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JSOP said:
And/or rent apartments or houses by the blocks for the workers that you need to keep close to the company for face-to-face collaboration. It would be so inefficient for each worker to rent units on their own but if a big company like Google is able to rent a block of housing for the workers, they would be able to do it lot cheaper due to economies of scale. With all the profit that they are making, I think they can spare some to find some places for their workers to live in?
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Having experienced military housing, not getting to choose your house and where you live is a big deal, so that may be taking it a bit far. However that is the theory behind the Google and Apples of the world having free good food, coffee, gyms, child care, pet care, massages, medical...On campus; cuts down on time their employees waste doing that so they can focus better on work.
My team does all come in once a week to ensure we're all on the same page and get synched up, and if we're launching a new product or have client meetings we may come in one other day, but beyond that it's just butt in seat time for its own sake, at least in our case in my opinion. Again wouldn't work if you couldn't hire (and pay for) A players. But if you can it makes life so much more enjoyable for everyone and in my experience we see a pretty impressive productivity level.
 
My employer's adventures in offshoring software development has been an abysmal failure. Horrible quality. Transient workers who are never there to support their bug-ridden code years (or even months) later.

Everything had to be re-done by in-house engineers eventually.
 
Sig said:
Having experienced military housing, not getting to choose your house and where you live is a big deal, so that may be taking it a bit far. However that is the theory behind the Google and Apples of the world having free good food, coffee, gyms, child care, pet care, massages, medical...On campus; cuts down on time their employees waste doing that so they can focus better on work.
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To me, if I run Google, I will get rid of all the gyms, pet care, massages, but invest instead in housing. In my opinion, commuting is the activity that wastes the most of the time of an employee, let alone stress.

Sig said:
But if you can it makes life so much more enjoyable for everyone and in my experience we see a pretty impressive productivity level.
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Yes nothing beats coding in cozy pyjamas basking in the rising sun... :)
 
Ryan81 said:
My employer's adventures in offshoring software development has been an abysmal failure. Horrible quality. Transient workers who are never there to support their bug-ridden code years (or even months) later.

Everything had to be re-done by in-house engineers eventually.
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Yes the problem is "offshore". You can have employees telecommute but there is a limit on how far they can telecommute from. To a certain point, the savings perhaps from cheaper offshore labour is going to completely offset by the degradation in quality and the extra cost that you would have to incur in redoing all the work.
 
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