I agree. But theres no specific reason why you need to go through a third party to hire labour in india, especially as barriers come down.
Yeah, personally I am feeling like the challenges of dealing with managing a remote workforce of domestic colleagues is going to create some resistance to more outsourcing. I am not sure the business case is going to change materially because of the post pandemic model, just look at how hard companies are trying to get people to return to at least a hybrid model. For every instance of “well we have the infrastructure now, we should outsource overseas” there with be an instance of “we can barely get the people that are an hour outside of the city to function, do we really want to try to move this role to India?”
Some are. But theres a few things here.
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Managers wanting something and it being the best thing arent always aligned.
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WFH was a massive windfall to employees. I’ve seen estimates that it’s worth 10 to 15% of your salary.
If hybrid was even just 2% better for the employer, you would see what we are seeing now. Fights to bring people back. Part of that is because salaries arent flexible.
Over time as salaries and work locations adjust, the market might settle on lower salaries for WFH with an outcome that is better for everybody.
- Many managers and companies are terrible at working remotely. Again. Only two years in, and most companies are run by mediocre gen xers and boomers. Give it another 3 or 4 years and give millennials more of a shot at it, and the effectiveness of remote work will keep increasing pretty dramatically.
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For the purposes of your prediction, why does it matter? This is like making a prediction about the future of the US labor market and assuming we had no (protectionist) immigration system.
I think we’re going to go in circles.
In the end, even if people in low cost of labor countries are getting more talented, the real premium talents in those countries who are able to replace the labor in high income countries will also want to move to those countries where the standard of living is higher. For example, why is some Indian lawyer who is a super expert at Nebraska law going to want to live in Mumbai and interact with his clients and opposing counsel in the middle of the night. He’s going to use his skills to find a way to get his family over to Nebraska, even if he has to settle for something like H1B.
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Agree completely. And you got much better at it with practice.
Now imagine companies are massively financially incentivized to build this sort of capability in their leaders. And you can just bring one of these folks into your team to work alongside everyday.
Those barriers are going to come crashing down pretty quickly.
It’s a very big challenge to deal with the business and figure out what they really want, and design the app so that it can handle what they want now, and what they’ll probably want in the future, w/o turning into a maintenance nightmare.
There’s a ton of art to it. It’s not a job just anyone can do. Now add in not being in the same time zone, never meeting in person, and coming from a very different culture - and it gets really hard to fill in the blanks of what the business really wants.
Imagine me trying to fill in the blanks of what a Japanese business owner really wants while navigating all the confusing social norms and unspoken cues.
Maybe some can do it. But those people would probably also be in high demand just like they are here. It’s not like you’re going to just order one up in India.
Once you find a dev that’s really good at that stuff, AND now they have that institutional knowledge from a few years under their belt – they’re incredibly valuable. So you better pay them well to keep them from jumping ship - just like here.
If someone in India is that good, you’ll probably always been in danger of someone else sponsoring them to go to Europe or the US. Assuming they want that. Not all do.
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Yeah, definitely see where you’re coming from. In terms of predicting broad trends, it doesn’t seem as obvious to me that those factors will outweigh other factors. Another angle on this is that frustrations with remote work are going to drive a huge swing away from globalizing the labor force because eventually senior management will snap and say THAT’S IT ENOUGH IS ENOUGH EVERYBODY BACK INTO THE OFFICE THIS IS BULLSHIT.
I’m still skeptical that we really figured remote work out as a long term solution.
Like maybe the existing company could perform well working remote during covid, maybe even better than before covid, but will they be able to integrate new entry level hires or maintain a corporate culture over decades? I am not so sure.
This is what I’m experiencing too. It’s very hard to separate noise from signal, but an unsubstantiated impression I have is that the more effective WFH employees are the ones that were already really good at their jobs, and it’s harder to make new employees effective because if they don’t already know what they’re doing it’s harder to get up to speed.
I agree to a certain extent. I guess the question is how much of that could be overcome with the benefit of the labour arbitrage.
For example.
Shipping a car from Korea to the states is expensive, plus import tax (I think?), admin, paperwork, etc.
We do it anyway because you can build a better product so much cheaper and still pay all those extra costs.
Imagine you are hiring people at 50% of the price. They are considerably smarter, better educated, ambitious and hard working. You then spend 30% on training, systems, education, coaching, cultural awareness, good management etc.
I have to think you can build a better employee at 80% of the price?
They have and will continue to try. But they keep running in to this.
I’m snap choosing Mumbai over Nebraska.
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We found that with training new hires for the contact centre.
A lot of our training didnt work very well remotely.
Over time, with a LOT of effort, and hundreds of refinements to training, we have got much better at it. Still not quite as good, but getting close. Now it’s tothe point we get the same result but need to add an extra week or two to an 8 week process.
That’s the kind of thing that labor arbitrage could pay for easily.
That’s pretty common in a lot of the world. Lots of places influenced by the British system will send people straight to medical school right after secondary school. It’s longer than 4 years because I assume they’ve put all the pre-med stuff in there too (normally 6, I think), but when they’re done, that’s the only degree that they have.
Recently met someone who just went straight from secondary school to dental school in the UK (which sounds like the norm). Can’t do that here. And while I’m sure there are plenty of jokes related to the British and teeth that come to mind, I’m sure their dentists are perfectly competent.
I mean, it depends. Do those people have higher turnover rates than the domestic counterparts? With increasingly onerous data security and privacy laws is there a hidden cost to managing the flow of data in and out of various countries? Is there a cost to maintaining a business license in other countries? What about the cost of monitoring local regulation changes and making sure that all your policies work in every country you operate in? Etc. etc. etc.
None of this is conclusive in either direction but I think a lot of outsourcing business plans tend to crash on the rocky shores of The Devilish Details. Things that look AMAZING on a PowerPoint slide in Toronto are shitshows in the real world.
Yeah I’m skeptical about bringing remote employees up-to-speed en masse as well, as much because of the human connection factor as the barriers to learning (IE - not being able to pester someone constantly). I don’t think it’s impossible, just that it will be slower. And you have some employees like me who would really rather work face to face a few days a week.
I’ve been on an all remote team where the shit hit the fan. The people who knew each other IRL circled the wagons and blamed everyone else.
Well keep in mind life in Mumbai basically means working a graveyard shift and making significantly lower wages.
This forum is more anti middle America than most people are globally. Standard of living is actually really high for professionals in American flyover states if you don’t care about America’s politics or culture wars. The cost of housing low compared to incomes, suburbs still have good educational systems, crime is low. Almost all houses have luxuries like central air conditioning
Anyway my first hand experience tends to involve software guys in Mumbai or Noida and clients in Berlin, not Nebraska
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Speculative prediction - the Fed interest rate policy commitment to crushing the labor market creates a sea change in 2023. Big layoffs and a cooling job market are going to inspire business leaders to crack down with my way or the highway hybrid work requirements. Workers will complain but ultimately acquiesce. Once a critical mass of articles in places like the HBR justifying the end of WFH:
The only thing keeping the WFH dream alive for workers is their vanishing leverage in the labor market. Big Jerome is coming for you home office and his tools are more powerful than yours.
We trained about 200 new hires fully remote during lockdown. They are now 12 to 18 months in and doing great.
Some barriers. And we need to work extra hard to create connections between them all, but it’s working fairly well.
And this was with training and trainers who really weren’t prepared for fully remote. We are going to get better.