This is a body of e-mail message I've received today: =============================================== High skilled Developers only $15!! There isn't much we don't do. Our programming team can handle C++, Oracle, Java, ASP, Visual Basic, business applications, security and cryptography, database apps, and anything else you want to throw at us. We work on all operating system platforms: .NET, Windows CE, Palm, you name it. We represent a number of well-established companies staffed with hundreds of qualified people with a record of successfully completing hundreds of small and midsize projects and tens of wide-scale projects for Fortune 500 corporations worldwide. Get in touch and we'll provide ample references. If you don't know what any of this technical jargon is but still have a project in mind, we can tell you what platforms and apps you need and design your system from scratch at 15% the price you'd pay most programmers. And we can handle you back office work as well for just US$8/hour. This is stuff like payroll, data entry, voice transcription, medical transcription, checking invoices, and any other administrative tasks you'd be better off outsourcing to us for big savings. ============================================ --Alex
This might be an overzealous company but the reality is not very different from it. All "mundane" task can and are being outsourced to countries with cheaper workforce. Now, who is harmed and who is benefitted from this is a different issue. But it sure makes the management happy!
I'm just saying you get what you pay for. The sheer economics tells you no one can sustain a high-tech business outsourcing services that costs the client $8-$15 (an hour, I presume). What's the outsourcing agent getting from that? 20%? So you're finding highly qulaified Oracle help at $6.50 to $12.00? Again, I presume per hour. The ad doesn't specify. It could be "per task," which is nothing more than saying "I'll be your hotdispatch service but you won't selectively decide to pay for the work like they do." If all it ever took was price, it's a nice offer. Now consider what happens when your business commits time and energy to this kind of source, gets, say 1-2 months into an important project, and then the talent goes away. Or, more likely, gets a better offer and leaves you high and dry. Cheap bids are just that. [ December 04, 2002: Message edited by: Michael Ernest ]
Make visible what, without you, might perhaps never have been seen. - Robert Bresson
That's true. But then nodody outsources "key" or very critical tasks. Routine programming tasks are not very much affected by a change in the programmer. A company will be in trouble if their architect is missing! But a programmer can be replaced easily with another one. Those are the kind of things that can be outsourced for cheap. Outsourceing critical components to Big 5 consulting companies (KPMG, E&Y et.c) has been going on for years. Now there are such reputable companies outside US too, which are probably not as cheap as $15 but still much cheaper than Big5. In my office, we have some contractors from Infosys India. We pay $30/hr to Infosys for each contractors. And some of the contractors have been here longer than myself (1+ yr). What I am trying to say is that a company can always go to a reputable company for cheap resources to mitigate the risk of attrition. In our case, the contractors are in the US. But it is not at all unimaginable that the work they do here is shifted to India. In such a case, the cost will be even lower. Now, does $15/hr still look a bad proposition to you? Not to my management and I am s*** scared of it.
I agree with above sentiments that this particular ad is probably a landmine. I also agree that generally this is the trend we're seeing, if not $15, cheaper then US labor. Again, I say, hurray! Cheaper labor ==> lower cost of business ==> cheaper prices As a consumer, I am all for this. Of course, as a software engineer.... I'm also all for this! They can't possibly outsource the complex tasks that I do. Not anytime soon. Eventually, maybe they can, but then I'll have developed new skills.
Consider web development. In 1995 if you wanted a web page, you had to pay some high school or college kid $30/hour or more. Now there are enough tools out there so that you can build a basic web site without ever having heard of HTML. In 1997 we paid people $70/hour and more to develop e-commerce web sites. Again, modern tools have made this easy. Heck, if you're a small enough company, you can simply go to Amazon or a similar website and set up a z-shop. Instant online retail without ever writing code or hiring programmers! If your job was to build e-commerce web sites, you're in trouble. Yet we didn't see as much complaining about this as we do with outsourcing. Believe me, e-commerce and web developers are hurting plenty. They have two choices, die, or develop new skills that the tools don't provide.
Technology generally follows this pattern: 1) Development Extremely intellectual work, requireing advanced knowledge (e.g. PhD) 2) Initial Commercialization Application of the technology to the marketplace for comemrcial purposes. Usually requires large upfront costs in tools or training. 3) Widespread Adoption As a tool/service becomes widely used, it becomes "codified" and standardized, allowing it to be done more cheaply. Long gone are the days of proprietary email systems which don't interoperate. 4) Automation Ultimately the task becomes so commonplace that tools are created to do it cheaply. Thanks to call center software, we can now create complex call centers anywhere in the world, with minimal training of the staff as to creating the system. Why? because call centers are so common, that we automated some of the difficulty of setting them up. This doesn't bring the cost to 0. We still need human operators, but we've done our best to automated their overhead so they can work more efficently.
Web development is somewhere between 3-4. Complex business applications are still in stage 2. Virtual reality displays are still in stage 1, for the most part. Learn your history. Very few developers do the same things for 20 years straight, event 5-10 years, unless you want to maintain legacy systems. Don't expect your knowledge today to work tomorrow, you must constantly adapt. If someone can do my job cheaper, that's great, especially when it's the mundane part of my job. That frees me up to spend my free brain cycles on more intellectual persuits which someone without my knowledge, capabilities, locational advantages, domain knowledge, etc cannot do.
--Mark [ December 04, 2002: Message edited by: Mark Herschberg ]
Mark Herschberg, author of The Career Toolkit
Here is a story.. Couple of days back, I visited a doctors office, a specialist's office. The time I actually spent with the doctor is about 5 to 10 miniutes. A that happend there was checking if there were any external signs of certain disorder that might have come back (which I myself could have known). After that, I got a bill for roughly about $150. So, it is something like $1000/hr? Another one.. A few months back, I was at a music school, where I was taking some lessons (I pay roughly $150 every month, which is about $50/hr). I overheard the lady who runs the institute talking to someone else. Her s/w application broke and she hired a programmer or some comp professional to fix. Apparantly, she was paying about $20/hr. While he was on the "duty", he went out to smoke. For that, she was complaining so much and also complaining that his rate was a little too high. It makes me think.. Comparing an ordinary computer professional with an ordinary medical professional, why is there so much difference in their rates? Intellectully, is one so much better than the other? I am not talking about any hi-fi research candidates here. Is it the reason - that there are there too many computer professionals? For that matter, aren't there are a lot of doctors too? How are they able to maintain their rates in spite of so much supply. I think this is the case in every nation. Not just US..
For starters, not everyone can be a doctor. It takes a college degree and medical school -- 8 years or so of training. It's not an easy profession to enter. Only a part of the work involves direct examination of patients; so imagining them going room-to-room all day long generating bills is more like a legal industry approach than a medical one. Medical malpractice insurance is no small part of the cost, there are support staff, supplies, expensive diagnostic and testing equipment -- all that 'hospital' stuff -- and other costs to consider. But of course, doctors also command higher pay, so ultimately they do get paid more than your average programmer. Add that to the cost of running a practice To fix a computer, you need a pulse and (one hopes) some experience in what you're doing. You don't need a state-certified license, no formal schooling, and you probably don't need a staff or an office for contract work. Most contractors I know don't bother carrying liabilility insurance, much less know why they should. There may be little or no difference in the intellectual capability of your average doctor and your average programmer, but your doctor has had to prove his ability under a lot of scrutiny and peer competition. The barrier to entry into the medical profession is a deal-breaker for most people, and we're not even talking about how hard it is to get into a medical school yet. Plus, y'know, dealing with life and death and all; tends to jack up the going rates. Even then, many staff doctors only make a small fraction of the bill you see. I don't know if there are too many doctors in this country, but getting access to one has never seemed trivial to me. Not so hard finding a programmer. [ December 08, 2002: Message edited by: Michael Ernest ]
Make visible what, without you, might perhaps never have been seen. - Robert Bresson
I think this is the case in every nation. Not just US.. Nope. In Russia (or fUSSR) doctors for long time were one of lest paid workers. To make a decent living, ordinary folk had to work nights in hospitals, less ordinary accept bribes etc. I used to make more money as a programmer than my cousin, who is a child doctor and a single mother, and who had to work nights while her 7-years-old twins slept home alone. As for $1000/hr - do not imagine these money go directly to the pocket, insurance takes a lot, and all what Michael already said.