Not saying that’s not the case for you, but I used to work for one of those foreign companies paying for US outsourcing labor.
@thefartographer has more of a point than this answer implies. The rates you mentioned, tend to be gross rates the outsourcing company makes (and there’s a growing number of them, compared to freelancers - which often aren’t really an option for various, frequently silly, reasons). If there is any stock comp, it usually does not pass through to the employee, while outsorcing company stock is, well… Outsorcing company stock (with some notable exceptions).
All in all, things aren’t so rosy all around, and they’re only getting worse. Takes some mean salesmanship to seel those rates nowadays, and it won’t work forever.
Don’t get me wrong, US software engineers are great - one of only 2 locations I go for these days (3 if it’s academic work). But this is a bad path to go down, and no amount of marketing is gonna change that in the long run (talking generations here).
Yes. Assuming that you can actually find clients and that those clients don’t have policies against hiring contractors directly (a lot of the big ones do). Those seem like low barriers to entry but the majority of developers don’t meet them (I used to be one, and most of my friend circle still is), much as LinkedIn would have us believe otherwise.
Solutions for individuals tend not to work for large groups (I got lucky, you might just be that good). These changes point to a systemic shift which could work out for the better but I really don’t think it will.
The truth is, except for niche requirements and expertise, one US engineer is not as good as 4 Eastern European devs (and I could get you those for the same price while making a hefty margin). Only the best are needed, the rest are competing in a market that doesn’t even cover their living expenses, and they can’t even negotiate as hard because they don’t have as many local jobs as alternatives. Moving down the value chain is never a good sign. Eventually you capture less profit no matter how you slice it.
Speaking from experience, those are business practice problems, not technical competence issues.
You do get what you pay for, but top line (counting the middlemen on both sides) Eastern European outsorcing rates are only about ~30% lower than US rates these days, and people still think of it as a cheap labor destination. So companies give you 25% allocation while pretending to give you 100% and such to make the math work out. Lots of shady business practices like that + outsorcing companies don’t really give a damn about your product. I imagine you’re thinking startups since we’re talking “apps” here, and the industry gameplan there has been to bleed them dry for a while now unfortunately.
But if you’re outstaffing and can actually manage the talent yourself, trust me these guys have no issue going toe-to-toe with US devs.
You bring up a valid point about why though (despite bad comp). My guess is free education up to and including your PhD, general technical inclination, differences in values (a lot of them straight up refuse to move or change their lifestyle for 4x the money for instance, almost inconceivable in the US). I do wonder if that will last though.
Of course it really depends on who you hire, there are also shit developers everywhere and you can get majorly screwed if you don’t know what you’re doing, and that becomes way more likely the moment you’re hiring abroad (information asymmetry is a removed).
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