How to survice being outsourced

Steve Sammartino – author of Start Up Blog – just listed ten reasons for outsourcing digital work and why it’s ethical. My personal ethics were easily satisfied with reason 9:

The outsourced work is not dangerous – we are not sending kids down a mine or employing child labour.

So I don’t see any ethical problem, but I do believe that outsourcing is going to be a massive problem for Australian software developers.

I often hear stories about misunderstandings, cultural differences and bad code. Many see this as proof that outsourcing doesn’t work and is really not as cheap as it sounds. The way I see it, these problems provide local developers with a strong competitive advantage. But they also create a massive incentive to do something about these problems.
In fact, I think these problems will be gone in a couple of years. People learn and nowadays they can learn really fast. Intercultural understanding will improve and with it the resulting code.
As a result, in the next couple of years it will become harder and harder for local developers to justify their much higher cost. The same goes for a lot more knowledge workers.
There are a couple of ways these local developers can deal with it:
Ask the government to “protect” Australia with massive tariffs on services.
That’s a stupid idea for a lot of reasons so let’s not even consider that. Nonetheless, I would not be surprised if the government contemplates such ideas.
Pray for the dollar to drop by a factor 10

This would solve your problem as you are now very competitive. You may even find yourself working for an Indian company. Of course, this also means your next iphone and laptop will be 10x more expensive and you’ll learn to appreciate a simple Nokia phone like never before. It will have pretty dramatic repercussions for the economy in general.
Most importantly, like the previous option: it’s out of your control and as far as I know even out of the government’s control.
Developers become entrepreneurs
Their know-how makes it easier for them to manage an oversees team. It might even tip the balance in their favor compared to non-techy entrepreneurs.
Learn to live cheaply
Share a house, use public transport, drink at a friends place in stead of in a bar and forget about children. But even that might not be enough.
As you find yourself struggling for new assigments and you watch your hourly rate drop, consider that Australian minimum wage is $14.31(€7, $9.44 US). Perhaps you can even go below that as a contractor, but you could ask why on earth you would do that.
Even at McDonalds or in a supermarket you can earn more than minimum wage. Of course, these two options are a one way ticket to brain death. There a very good reasons to be willing to earn less in order to prevent such brain death.
Perhaps you will find mentally challenging work in a different discipline, that moves you forward and pays more than software development: go for it.
But what if there is no other suitable work?
Get out of the country – but get out of debt first

Working outside the office is something many software developers are already familiar with. But usually that means working from home, which is probably in the same city and very probably in the same country.
Another way to compete with people from low income countries is to move to those low income countries yourself. You may be able to obtain a relatively high salary over there, because you can act as a liaison to companies in your home country.
But there is one major catch: debt
Once you move overseas and start earning local wages, that $10.000 debt on your creditcards suddenly looks a lot more scary. In fact, it will quite litterly kill you. Even worse: if you just bought a house at current insane Melbourne prices and these prices drop by a little as 10% you might end up with $50.000 debt after you sold your house.
That’s a debt-trap.
What I suspect is going to happen is something like this: unemployment rises, people with cash leave the country, people with debt stay behind.
If there is one thing you should take away from this post is that you should get out of debt.

1 comment

  1. It’s a very interesting thing. I think what could also happen, is that overseas coders will get more expensive as they move up the learning / skill curve. Or at a minimum there will be some form of equalization where western coders price drops and offshore coders become more expensive. Regardless, structural displacement and unemployment is a fact of life, that most workers face at some point during life. The only people who can and have, historically avoided all potential for structural change effecting their employment is Management and those ‘who control the factors of production’. Otherwise it is a required plight of humans to constantly re-skill as technology and economies develop.
    Thanks for the link and the thoughtful post after reading mine.

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