Out-sourcing and off-shore dev

fantastic_mr_fox

In recent times we have heard more about companies out-sourcing their development to other countries, which pay lower salaries, just to save money. There are many ethical questions to be asked about this; what effect will this have on local employment? the economy? I've recently heard of a new term (to me at least); "Off-shore development". Companies are opening development offices abroad with development staff which I suspect will be paid at a much lower rate than local staff would (again for cost-effectiveness). It seems to be a half-way house between in-house dev and out-sourcing. They're part of the same company, but work in a cheaper economy. Do you think off-shore development has the same ethical questions as out-sourcing? Or is it just another way of describing the first stages of a multi-national company? =)

Paul Watson

I was part of such a setup in my old company except reversed in that the company started in a 3rd world country (South Africa) and then opened a sales office in London. We kept the developers back home and paid them in Rands and not Pounds. We could undercut London based development firms and still turn a healthy profit. I haven't thought through your question but another question is; Is it ethical for a company to earn a strong currency, Pounds, and pay the majority of it's staff in a weak currency, Rands. Even though I was earning a good salary for a South African it was still quite below what I would have earned had I been paid in Pounds. regards, Paul Watson South Africa The Code Project

Aamir Butt

I am in a similar situation. My company is earning in US Dollars and I am being paid in Pakistani Rupees. The amount I am being paid is about 1/10th of the amount they pay to a person of similar qualification and at a similar post there in US. It's tough to swallow but its like that. It is by Acts and not by ideas that people live**-- Anatole France** My Articles

Antony M Kancidrowski

Paul Watson wrote: Even though I was earning a good salary for a South African it was still quite below what I would have earned had I been paid in Pounds. I guess it is all relative. You need to compare the cost of living and then you will have a true reflection of your overall pay compared to other countries. Given that I live in the UK I can earn considerably more in the south compared to the north. However cost of accommodation in the south is much higher. Ant. I'm hard, yet soft.
I'm coloured, yet clear.
I'm fruity and sweet.
I'm jelly, what am I? Muse on it further, I shall return! - David Walliams (Little Britain)

Paul Watson

Yes, it is relative and it still works out to being underpaid. Your example of North UK vs. South UK is quite different to 1st World vs. 3rd World. And the main point is that the company is earning in X and paying in Y where Y is a fraction of the value of X* yet they are getting IT expertise equal to that of what they can get locally. * 10 to 1 in the case of Rands vs. Pounds. Other countries with IT expertise are worse off e.g. India. regards, Paul Watson South Africa The Code Project

Antony M Kancidrowski

The bottom line is that companies pay what they can get away with. The point I was making with the UK is one which I have personally experienced. I moved further south with my job (relocated about 250 miles) and was given a better enumeration package in doing so. Just a thought! If you were to be paid in X currency you would be subect to exchange rates. Sometime they would be in your favour, sometimes not. Would you be able to accept that some months you would be paided more than others!? Then again if you were paid more would it matter that it fluctuated? ;) Ant. I'm hard, yet soft.
I'm coloured, yet clear.
I'm fruity and sweet.
I'm jelly, what am I? Muse on it further, I shall return! - David Walliams (Little Britain)

Paul Watson

>The bottom line is that companies pay what they can get away with. I totally agree, that is part of the ethical question we are asking. >Would you be able to accept that some months you would be paided more than others!? I am in that situation now. There is some buffer should the exchange rate move unfavourably for me but if it continued to decline I would have to talk to my boss about renegotiating the package. >Then again if you were paid more would it matter that it fluctuated? Depends on the rate at the time of negotiating the package. regards, Paul Watson South Africa The Code Project

Allen Anderson

you 'just' heard of this? heh. where exactly have you been the past 4 years.

Kant

fantastic_mr_fox wrote: In recent times we have heard more about companies out-sourcing their development to other countries That's new trend for big companies who got opposed to the outsourcing. A big firm here this year opened new branch in India and hired 4 DBA's there. (4 Indian DBA's salary = 1 American DBA salary) Another big company in Wisconsin moving 450 jobs to a big consulting in India for $8 an hour. Don't freak out. $8 per hour in India is a very good salary (comes around Rs 6,00,000 yearly) Before IT boom it was 'Offshore-development via contract', after economy crashed it's 'Outsourcing' and now 'Offshore-development office'. You use any term, for an average IT folks in America (or for that matter any 1st world countries) the bottomline they are getting screwed.
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Giles

fantastic_mr_fox wrote: you think off-shore development has the same ethical questions as out-sourcing? Or is it just another way of describing the first stages of a multi-national company? The later. Don't know where you are from, but here in the UK there is a thing called London waiting, which means you get paid more for doing the job in London, than you would elsewhere in the country. Cost of living is more (house prices are 2 to 3 times the rest of the country), so if you want someone located in London then you need to pay the extra. Now if the company is happy to have all their devs abroad, and out by 8 hours then fine, but I'm guessing they also want people close by, in case there is an urgent issue. They could get a guy in on a Visa, but they would still need to pay him more, or put him on expenses, just beacuse eveything costs more. Will this continue? Who knows. When eveyone has been outsourced, western companies may also find there is nobody in the market who can afford thir products, as they were all made unemployed, when they outsourced eveybody. Frankly I really don't care, unless the jobs being outsourced have all the health and safety restrictions lifted, as I've heard of many companies doing, e.g. is chip fabrication plants, where they use a lot of nasty chemicals. Not going to name names, but its all your well known big blue chip computer manufacturers. I hope the law gets changed in those countries and the companies get prosecuted, and fined heavily.

Henry miller

I have to take issue with your last two paragraphs. Jobs are not a zero sum game. When they guy in India gets a job, he now has money to spend on goods, some of which you can make. It all comes around. In the mean time those smart people in India are creating more tech (4 of them for 1 of you), which brings your standard of living up more because you can work with better technology. Sort of, this is all too complex for simple debates. I don't have time for complex ones. I'm just presenting the other side of the issue that you need to consider before you worry. In the case of India, they are already worrying, because wages in India are higher than other countries, so those who are looking for bottom dollar workers are going elsewhere!

Giles

Yep, everything you say is totally true, and it is too complex to describe the issues that may come about in a few sentences. I like having fun being a bit controversial, when everyone else is trying to summarise their thoughts in a paragraph. ;) By taking one side to the extreme someone always come back with something thoughtful. Its true though about the companies outsourcing purely for the lack of heath and safety. That really is bad for companies that like to claim they are responsible employers. Nike got caught with kids in sweatshops, and now chip firms are making people work in envirnments with nasty chemicals without telling them the dangers.

Colin Angus Mackay

Giles wrote: in the UK there is a thing called London waiting I always thought it was called "London weighting" (because the weighting of an employee in London is more than, say, the west country). Having said that. When I was looking for a new job last year I noticed that jobs in London were not paying that much more than elsewhere in the country (maybe by only 5K-10K more - which is not enough to offset the additional costs of living there)

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Giles

Colin Angus Mackay wrote: I always thought it was called "London weighting" (because the weighting of an employee in London is more than, say, the west country). :-O Ooops. Having a spelling moment. Colin Angus Mackay wrote: Having said that. When I was looking for a new job last year I noticed that jobs in London were not paying that much more than elsewhere in the country (maybe by only 5K-10K more - which is not enough to offset the additional costs of living there) But they are still weighted. As well, it depends what kind of job. If you have financial experience, and strong maths then things pick up a bit.

Colin Angus Mackay

Giles wrote: If you have financial experience, and strong maths then things pick up a bit. Actually, for equivalent financial experience you can earn about the same in Edinburgh (at least if they adverts are anything to go by). And the cost of living (while the most expensive for Scotland) is very cheap compared to London.

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Giles

Colin Angus Mackay wrote: (at least if they adverts are anything to go by). If its being advertised its probably not the same kind of job. Most decent financial jobs in London all go via recruitment agencies. I can't remember the last time I worked with someone who got the job via an ad, as you don't need to. The agents steel copies of your cv when they move jobs, so they have potential candidates to phone up when they get new clients.

Colin Angus Mackay

Giles wrote: If its being advertised its probably not the same kind of job. I mean advertised on a recruitment site (like jobserve or monster or the agencies own site) Giles wrote: I can't remember the last time I worked with someone who got the job via an ad, as you don't need to True, I just went through the list of Microsoft partners.

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Giles

Colin Angus Mackay wrote: I mean advertised on a recruitment site (like jobserve or monster or the agencies own site) Many of those jobs from agencies for finance jobs are fake. Its a way of getting new cv's, nothing more. I know as my brother is an agent. Here's one of their other tricks. They phone up, and ask to be put though to the head developer or some other rubbish. They get to speak to you and say they are from FHM, and that they got your name from a cometition. You one a ticket for you and 5 mates to go to a party with ladies who don't wear many clothes and the booze is free. Now all you need to do to get the ticket is give them your full name address and job title, and those of 5 of your work colleges. Nice. ;)

Colin Angus Mackay

Giles wrote: They get to speak to you and say they are from FHM, and that they got your name from a cometition. You one a ticket for you and 5 mates to go to a party with ladies who don't wear many clothes and the booze is free. Now all you need to do to get the ticket is give them your full name address and job title, and those of 5 of your work colleges. Interesting, but since I never enter competitions I would be somewhat suspicious to begin with.

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Giles

Same here. Which is why I phoned FHM to tell them that someone was pretending to be them. As you can guess they were not very pleased. Whats funny, is that 3 weeks later they phone up again with the same story. You can have fun leading them on. "Yes, I'm a sub system nano architect.....yes my name is Egbert Longbottom, and my coworker I.P.Freely". Well, maybe not the I.P.Freely bit.