Salary Arbitrage in Software Development is (Nearly) Over

A number of years ago,  I joined a fin-tech company to help it transforms its ability to compete as a SaaS based business. We decided to expand its capabilities beyond market data distribution to electronic order execution and management. We knew our growth was dependent on the quality of our programmers and our ability to scale quickly. We also knew, it didn’t matter where they were located. We created several home-grown tools to help manage remote work, but it was far from perfect.  What was shocking was the huge range of salary appropriate for each market we hired into. Local market range of similar developers was on the low end perhaps $750/month to more than $7,000 per month depending on where people lived.  

Today that gap is not nearly as broad and the tools available for remote work are so greatly improved that working remotely has become the norm even where staff are in the same city.  Automatic, the parent of WordPress is one of the companies that has made a move I have long expected. They pay for work to be completed and allow developers and most positions to locate anywhere, they choose. I am at the front of the line of leaders and staff who argue face to face interaction is important from time to time. I believe it is helpful when solving problems, but it is not nearly as critical to many as I used to believe. Yes, a personal relationship matters and face time does as well, especially when building those relationships. However, most employees will opt for a video conference or chat even where they are a building, a floor or even a few feet away.

Can you still get “cheap” development? Sure, but it usually yields a false sense of price.  I’ve had clients and colleagues that either used “offshore” or paid low in today’s world for inexpensive development wherever that might be.  In the end, after re-writing code, deleting code, adding hooks to make it easier to support and extend, the re-work from going cheap cost more than having done well to begin with.  In the past, the market was off around the world. Today, its closer than you think, and cheap usually means just that. The salary band for developers globally has closed significantly.  Of course, we will continue to see differences, but more in the range of different pay ranges that exist within the U.S., perhaps 50% or even 75% but not the multiples the existed years ago.  I also think that remote work has truly arrived and more companies like automatic will switch to paying for position not for location. It’s good for globally connected companies to consider.