January 01, 2004

Outsourcing Trends

A very interesting article on the subject of outsourcing programming jobs (thanks, Slashdot) leads to the happy conclusion that the talent pool in the hot outsourcing spots is fairly shallow and all that demand going over there is driving up labor costs quickly.

Six months ago, I could find high-level programmers in India willing work for $15 an hour, vs. the $100-plus an hour I was paying Americans for the same work. In only six months, that rate has climbed to $25 an hour in India, while my domestic rates have dropped to around $35-$50. On the last project I bid out, two proposals from India came in higher than domestic contractors. Admittedly, I'm in a very small sector of the larger market, and it's too soon to tell even here whether the trend will last, but I've heard similar reports from other businesses (see BW Online, 12/2/03, "U.S. Programmers at Overseas Salaries").

Adjusting to the global marketplace isn't necessarily pleasant and I know that the lower rates and increased competition will lead to a lot of griping about the good old days but with US programmers beating Indian ones based in India on straight price concerns, it's pretty safe to say that we've gotten past the worst of it and it's at a salary level that's livable.

Posted by TMLutas at January 1, 2004 01:56 PM