It's not offshoring in the same way as it was 20 years ago. They are remote employees, they go through the same hiring process as everyone else but at 50% the price. And remote work is much, much more accessible.

Remote workers located in HCOL areas of US and Europe have shot themselves in the foot. I see it especially in the market for native mobile development in Western Europe. Salaries decreasing, freelance rates dropping. There is plenty of work, but positions are filled with workers living in the South or East.

As hiring manager, if I'm going to hire someone who works remote, I will pick the person with the same skillset and experience at half the cost.

Timezones still play a huge part here as well. My team has several engineers who are at par compared to the rest of the team but they're a pain to work with due to a 10 Hour time difference.They may be paid 50% less but they're 50% harder to work with to no real fault of their own

Engineers in LATAM are increasingly popular for that reason; the timezone difference is about four hours from PST and about one hour from EST.

> Engineers in LATAM are increasingly popular

It's because of the tax holiday Costa Rica is giving [0][1][2], and VMWare's acquisition by Broadcom (they had a massive engineering campus in San Jose, Costa Rica) leaving a lot of Support Engineers and C++ Engineers on the market.

Czechia, Romania, and Poland did the same thing in the 2010s, Israel and India in the 2000s, and Taiwan and South Korea (in electronics) in the 1990s.

[0] - https://www.thegreenparkfz.com/

[1] - https://afz.cr/v5/en_us/about-us/

[2] - https://www.procomer.com/wp-content/uploads/Guia-Zonas-Franc...

50% of the price is quite nieve It’s much less than that. No health care no benefits no pension. No employer side costs, currency conversion to your advantage. 15-20 % is the number that makes it worth it. Bell Canada achieved under 10% in the early 00’s offshoring support to India

50% is often the number talked about in public while its much higher in reality as you are saying.

Numbers I work with are ~45k for a senior software engineer in Hungary, Spain, Italy, Greece vs ~85k in France, Germany, the Netherlands. Fully loaded cost (tax, insurance) adds about 20-30% on top in West. South and East are considerably less.

You can find even cheaper staff but you're still competing for talent. I can pay someone in South or East a premium against their market and still save big compared to an average salary in West.

This is ignoring any other benefits you have as employer in South and East. Try to fire or lay someone off in France - it'll cost you.

I think your numbers for France are off. When I tried to hire there last year the burden of employer taxes and levies was ~70%.

That wasn’t the part that killed the deal though. My employer’s real worry was around how hard they believe it to be to fire someone who isn’t doing well in France.

Saw Suncor try the offshore to India on their major app around 2014. Commit history a few years later barely changed.

The benefit of living in a HCOL area isn't just salary. If you own property you've been getting huge gains in value.

That's a loophole, though, hopefully it'll close in my lifetime

> But when you go fishing for cheap, which is usually the reason for seeking it in the first place, you're never going to find it

That's the thing - employers aren't paying peanuts abroad anymore either.

Just take a look at YC salaries in India, Czechia, or China (the level of talent that FAANG in those countries would hire at).

Base salary plus bonus is at most 50% less than in the US, so factoring taxes and legal fees you save at best 40%, which isn't significant in an industry with 80-90% profit margins.

It's literally about talent at the end of the day - it's just easier to scale out entirely new teams to speed up delivering multiple features at once.

If you pay peanuts, then software is just a cost center for you (and for most industries, it is)

A company I worked for had a lot of Ukrainian developers (who were mostly pretty good) and well, that had a tragic outcome. That kind of thing is a risk no one saw coming.