I know there would be a range due to job type and domestic location. And perhaps whether you’re comparing direct compensation and benefits or more fully loaded. But any real anecdotes about % savings would be informative.
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That's the crux of the problem isn't it? The positions aren't equal for numerous reasons, including culture. My anecdotal experience is that the proportion of similar job title employees offshore with less competence is greater by a pretty significant margin. That's not to say there are no competent workers, but the truly good ones are more rare compared to the US workforce.
Layer on the logistical nightmare and compounded risk exposure and it's hard to make sense of the justification fir doing it. It saves us some expense in the short term, but it will probably cost us later. There are so many case studies of companies who put too many eggs into the offshoring basket only to have to reverse that decision later after realizing the benefits just aren't there.
Hire at highest or lowest rate? Isn't there a few more calculations involved? If all else equal except expected pay, then pay would be the determinator. However, add in quality of work, amount of work, type of work, customer expectations, ability to gain new customers based on reputation, etc. As you can see, "it depends". I love the phrase....LOL....it's used so often but true for this response. In IT, I want experience and no BS when working a problem. I want knowledge and ability. If that drives the pay higher, then so be it. Obviously, a function has a certain value to an organization. For example, one would not pay a janitor 500k a year to sweep the hall. Likewise, don't expect a network engineer who is an expert to work for 10 bucks and hour.
Just sayin.
"1 US FTE costs roughly as much as 3-4 WFI FTEs."
Yeah, but it takes 10 WFI to do the job of just one US FTE, and that usually includes bothering the 1 US FTE that is left to help them. Also the US FTE is expected to cover 24x7 where the WFI resource checks out when their shift is over and doesn't want to work US hours to support US customers, and God forbid they have to work weekends and holidays.
Here is a question for all of you. If you owned your own business, would you hire at the highest rate or the lower rate? Would you try to maximize your profits or just break even or take the loss?
They work for one burger and a coke . Sit whole day for you
you get what you pay for. Including work ethic. I remember working with offshore 2 am trying to resolve a tech issue. Suddenly it was their dinner time and they just left. Wasted another 2 hours finding another resource and trying to get them up to speed.
I used to care about this, but since I was checked outta the game. Not so much.
Based on what an engineering manager has shared, for SE and SSE roles in Technology, 1 US FTE costs roughly as much as 3-4 WFI FTEs.
If you compare like for like it depends on yoe but that will go away in next decade. For analytics
Entry level 30%
Mid level 40%
Senior level 50-60%
Very senior level close to parity. I
I used to work for a “Big Tech” company prior to coming to WF. We (Americans) could have worked for free and still not be financially competitive with our counterparts in India. Reason was the high cost of benefits for us, which simply weren’t in the equation for the offshore people. Infrastructure costs played in, to a lesser degree. Comparison between office space in large US cities vs India cities.
My guess is 3 I&P employees to 1. Other guess is that WF are also receiving large tax incentives from the India government to offset India infrastructure/ set up costs. Some of these tax incentives can last 10-15 years.
I have a hard time believing a principal engineer is making the same as one here in the US. How is it that a Sr. engineer is making 30-40k while a Principal is well into the 6 figure range? That scaling makes no sesne.
On a posting I saw that the Principal Engineering role salary they are paid the SAME as US based Principal Engineers. I had to convert from rupees to dollars, but it was the SAME range. Only, over there one can live like a king on a salary same as US.
When one counts the management bloat over there, the real estate costs, the huge campuses, and of course the executive travel back and forth.....savings? No way. Its costing more, way more.
The dirty little secret in HY is that even if I&P cost MORE Shart would still be doing this.
Our economy is skewed to drive shareholder value, not to prove economic stability and opportunity. Thus anything to drive bottom line results and earnings per share is what we'll keep getting. Offshoring is a blatant play on this. And sadly, everyone loses expect major shareholders.
I probably could have articulated that better, but I think we agree. I really meant the only efficiency we are getting is immediate labor cost savings; I didn't mean operational efficiency. But the true cost over time will be greater than it would be if we just kept things onshore, because of the operational efficiency loss we're all feeling quite accutely already.
Keep in mind P&I do not pay into social security. How is this legal to offshore all these American jobs?
I did a 120 million offshore for fnf financial with service now infrastructure and call center. At that time 2014 it was no more than 30% cost reduction. Or 70c in the dollar rate. It’s not worth it with the quality , however you do get near 24 hour service
@iqp "There is nothing efficient about this split model aside from cheaper labor"—that's not accurate. Cheaper labor isn’t always efficient. I found that tech workers from India were often less efficient compared to American workers and H1Bs. What concerns me is that Indian workers and their culture are generally more accepting of AI. The first to adapt and effectively use generative AI will likely gain the efficiency advantage. The Basel-X catalyst will also play a role in this.
75%
Even if I could do only 2 for 1 to replace domestic (and so still accrete some savings to earnings) it would be very inefficient and likely not be better than the one person stateside.
50 cents on the dollar or less.
Diploma mills are rampant in India. I’ve worked with them for the past 7-8 years. There is little in the way of creativity for the vast majority of them. If there is an issue and it falls outside documented steps, they are lost and a US engineer has to get involved.
They are great for pumping out volume work that has detailed procedures. Not so great when there are needs or events that fall outside procedures. It is part of the cultural differences between India and the west.
Stop defending American job loss. I don't care about their culture. I care that Americans are getting sh-t on in order to save a buck, while c-suite rakes in millions in compensation.
There is nothing efficient about this split model aside from cheaper labor. People are losing their jobs here, in our culture, while the rest of us have to pick up the broken pieces and manage the nightmare.
Wells looks at the offshore resources incorrectly and is very short sighted. If people were able to truly understand other cultures they would be able to communicate more effectively. They would also learn that what these folks had to deal with in college was ten times more trying and challenging than US colleges. How do you think you would do if you had to share a text book between three people? Yes they get paid less but in their economy it gives them a middle class( not like ours but a middle class) Also if you look at their degrees, you will find that they are being under utilized in many cases. They are eager to learn and contribute because that is how they can make a difference for themselves and their families. Many of you griping about India should actually go there and get out of an office and really observe . Would you find that the lunch delivery guys have one of the best six sigma efficiencies in the world and it’s all done manually. Look it up sometime. We can’t even get a semblance of efficiency to get an automated approval.
I work for another company, but I know we pay the Indian contractors’ company $10 per hour.
Its significant. An engineer makes about 1/4 to 1/3 of an American. But, you get what you pay for also.
Rule of thumb 1 US = 4 India