Ask HN: Will WFH hurt income of some software engineers?

https://news.ycombinator.com/item?id=37101663

by hintymad • 3 years ago

6 8 3 years ago

news.ycombinator.com

The US has the hottest job market for software engineers in the world. The demand is so high yet the supply is so low that the income of software engineers in the US can be multiples of that of the engineers in other countries. Case in point, London has a pretty bustling IT sector, yet merely £200K is considered top salaries for an engineer. So, if WFH were truly popularized across regions, wouldn't the average package of engineers in the current IT hubs shrink? So, for those who advocate for WFH policies, you don't worry about intensified competition and therefore reduced income? I'm sure some of you are at the top of the game and therefore wouldn't worry about "competitions" because there would be none. But I'm talking about the averages with the assumption that there will be way more great engineers outside of the few IT hubs. I'd also assume that more supply of engineering talent does not necessarily mean larger or faster-growing market.

gregjor3• 3 years ago

Work from home and hiring someone overseas are different things. A company may allow WFH but still prefer people with legal right to work, no language or cultural barriers, no timezone hassles, no tax and accounting complications.

The US programmer job market went through this in the ‘80s with offshoring, it didn’t make much of a dent in programmer salaries in the US.

hintymad2• 3 years ago

A company may allow WFH but still prefer people with legal right to work, no language or cultural barriers, no timezone hassles, no tax and accounting complications.

If there's a demand, I was wondering if companies will eventually figure out a cheap-enough way to hire remote talent. Besides, even within the US, the income of the engineers in the Bay Area can shrink due to additional supply from other areas. As for outsourcing, could it be due to the explosive growth in IT industry in the past 20 years or so outstripping the supply from outsourcing?

gregjor3• 3 years ago

US companies figured out the cheap-enough way to hire remote talent decades ago. And they found that those remote employees come with their own set of problems, leading to offshore outsourcing firms managing the remote talent locally. So you don't see hundreds of thousands of remote non-US programmers working for US companies. Instead you see a small number of large outsourcing firms and agencies hiring and managing people locally and contracting back to US firms. They can continue to pay local salaries because demand for decent jobs in places like Bengaluru or Dhaka, and the difficulty of getting a visa and work permit and relocating to the USA, means those remote employees will have to settle for salaries far below what people doing the same work get in the US.

US companies offshore mainly to reduce overall labor costs, in other words. That works if the employer can reduce the work and work product to well-defined tasks that they can farm out to just anyone. It doesn't work for high-end creative work that requires specialized knowledge or business domain expertise.

ThrowawayR2• 3 years ago

Even relatively small tech companies can afford overseas offices with full time employees nowadays. The kinks and legalities have largely been worked out.

It's just a matter of time really. The US automotive industry, consumer electronics industry, and even the chip industry were thought to be invulnerable until, one day, suddenly, they weren't. And most coding isn't a fraction as technically difficult as the engineering done in those industries.

gregjor3• 3 years ago

You continue to confuse WFH with offshoring. Yes, some companies and entire industries did move manufacturing out of the US to take advantage of lower cost of labor. I wouldn't call all of those jobs unskilled, but they don't require high-end technical expertise. And local employees in Mexico or China or Vietnam can work at a local facility (no need for work permit or visa), don't have to learn English, and have logistics, timezones, cultural differences, and legal/government regulations handled at an organizational rather than individual level. And I doubt many of those overseas employees get to work from home.

Offshoring software development to India and some other countries started back in the '80s and still happens when it makes economic sense for the American companies paying for it. But programmers in India working for a US bank (for example) are getting paid Indian salaries, not US salaries. Despite lots of worry and fear back early in my career (yes, back to the '80s) about offshoring eliminating jobs and lowering salaries for US-based programmers, that didn't really happen. It turns out that managing offshored software development comes with its own set of problems that I won't get into. Offshoring programming doesn't have the logistics problems of manufacturing, and talented people exist around the world, but few programming jobs work with the developers so detached from the rest of the business.

The OP asked about lower salaries around the world pushing salaries down in the US. Labor prices do get affected by supply and demand, but also by other things such as geography, local labor laws, education, language, etc. Where a person lives, and what passport they hold, still makes a difference. People with remarkable talent and skill who can demand high salaries wherever they live exist but as a proportion of people working in software development those exceptional people represent a small percentage. With so many people (look at the sweeping layoffs across the US tech sector recently) chasing a relatively small number of WFH/remote jobs employers offering those jobs will have their pick of actually talented and productive people.

I travel full-time and work for US companies. I have US citizenship, so I don't present any novel tax or labor/immigration law problems to the companies I work for. The jobs available to me as a full-time nomad working from home (wherever that is) look pretty sparse, and represent some of the most desirable kinds of jobs because lots of people want f/t WFH/remote jobs, but few companies want to do that if they can find someone local. If I didn't have decades of experience, some talent, and a good professional network I would have to physically locate myself somewhere in the US to avoid unemployment.

robswc• 3 years ago

I haven't seen too much of an effect on remote salaries. I only really see the difference for really high profile jobs or jobs in places like SF or Seattle where cost of living is insane so they have to comp you for that.

All the remote jobs I've seen pay the same as if they were in person. I've only ever seen a 5-10% bump in offer for non-remote... but that 5-10% is 100% worth it for some so they can live anywhere they want.

kosasbest• 3 years ago

WFH doesn't democratize software engineering, because programming is so hard, very few people want to do it, and the reason for the exorbitant salaries is because people are paid to basically bang their heads against walls all day in frustration. Unless you are so competent that the act of coding feels smooth and isn't an adversary, but then everyone would be doing it, so?

hintymad2• 3 years ago

very few people want to do it, and the reason for the exorbitant salaries is because people are paid to basically bang their heads against walls all day in frustration

This does not explain why packages in London's IT sector are much smaller than those in the US. It seems supply and demand still plays a critical role in engineering pay. In addition, EE is much harder to learn and requires rare talent to master, yet the engineerings in EE have been seeing decreasing pays for years.

Ask HN: Will WFH hurt income of some software engineers?

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