U.S. Techies Working At Overseas Salaries?

from the competition-at-work dept

The issue of tech companies offshoring programming work is certainly a contentious one, and Business Week has an article talking about how one company dealt with the dilemma of saving 50% on salaries (vs. the standard asking price) by outsourcing to India or, instead, offering much lower salaries to American workers. The company found that they were flooded with resumes for the low paying job - many of which turned out to be high quality programmers. The company hired four programmers at the lower wages, and used them for the one project. Two of the programmers were eventually hired on as full-time employees at regular salaries. Of course, this sort of thing only works while the job market is weak, but does suggest that the market is correcting somewhat for boom-time salaries that were out of proportion with reality. Still, I take issue with the "obvious" choice, as described in the article, of going with cheaper overseas workers. I think that the benefits of having local, on-site staff who you can communicate with directly is quite valuable - often in excess of the amount of money "saved" in offshore salaries. In this case, the employer only valued the location at $5,000/year - which is much less than it's probably worth. The risk in offering salaries that are so low is that you may get lower quality workers who are much more likely to jump ship. However, in this case, it's clear that the employer realized this, and appears to have made his reasons clear to the employees - and, in fact, adjusted the salaries well upwards for the employees he wanted to keep. This all brings to mind the whole concept of "professional internships" that seem to become popular when the economy is down. People who want to convince a potential employer of their worth sometimes agree to unpaid (or barely paid) "internships" to convince the company that they're worth hiring.

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