I think it's 2. I don't see why senior dev salaries should go any higher. At that point it would be easier to open office overseas even for smaller shops.
>I don't see why senior dev salaries should go any higher
Because they're vastly underpaid compared to the value they produce.
>At that point it would be easier to open office overseas even for smaller shops.
Which means you're getting junior devs, at best. The entire concept of outsourcing hangs on the idea that the people being outsourced to will behave exactly the opposite of those doing the outsourcing, i.e. not really caring about money. Well they do care: when they get senior they leave and go somewhere they can earn western money.
> Well they do care: when they get senior they leave and go somewhere they can earn western money.
It seems like the offshore contracting companies have a better grasp on how to maintain tech workers than the companies that hired them do. I've noticed my contracting counterparts get regular performance reviews, decent raises, and title changes actually open up doors for them.
I get my regular 2% a annual bump and any title change has no impact on my actual work.
World doesn't work like that. You are not paid by the value you create, but by supply/demand for the position. The economics of the product only dictate whether something will be done or not.
And your second statement is not true. You simply get cheaper workforce in other countries. Even on senior levels.
>You are not paid by the value you create, but by supply/demand for the position.
The labor market isn't the greatest place to talk about market forces. Companies do everything they legally (and illegally to an extent) can to ensure that it's not an efficient market. Further, companies have all the power in the relationship: most of us must have work but a company doesn't absolutely have to hire someone. I saw a 4-person startup on this site say they'd been looking for a "rockstar" for 2 years to expand their company. They were willing and able to wait 2 years for a highly skilled person willing to take a low enough salary. Not many people can wait 2 years to get a job.
To see what a real labor market would look like, you need to address the power balance. So I think sports teams are a better representation because they have unions to address this issue. And they do capture more of the value they produce (not all of it, obviously).
>And your second statement is not true. You simply get cheaper workforce in other countries. Even on senior levels.
Oh, I had assumed you meant the typical outsourcing locations. If you mean places like Europe, yes you can get good senior people for lower rates there. But it's a percentage lower, not X times lower, you can't get a truly senior level person on e.g. 7k/yr. I'm sure there's someone somewhere that has, but they'd have done better to buy a lottery ticket with that luck.
This is good comment, and I wish I had seen it when it was made. The labor market is strange; it actually must be messed up, for profitable ventures to pan out in the software development space (if developers were paid directly according to their contributions, capital would not invest in developer-oriented businesses).
The counterpoint is that you get what you pay for. If you wait 2 years for a rockstar to take a shit salary (and let's be real, someone numerate enough to be a rockstar won't take a bad deal) you also are pricing into your organization that it's not worth it to acquire a rockstar for anything less.
