A friend told me about his new job: setting up an office for a Silicon Valley hardware/software company here in the Boston area. “I need to hire about 10 engineers,” he said. Why would they want to fragment their workforce by adding an office 3000 miles away? “Everything costs about 30 percent less here in Cambridge, including salaries.”
Readers: Is this a trend? Should we coin the term “other shoring” for hiring cheap workers in Boston?
Same here in Austin. We’re hiring folks from California like crazy. The cost of living is low and there’s no state income tax. Kinda hot, though. But we compensate with BBQ.
A number of Silicon Valley companies have engineering offices here in Seattle. The move to Seattle is primarily driven the the availability of engineering talent in the area. Notable companies with offices in Seattle include Google, Facebook, Twitter and Splunk.
How about “right shoring”? Similar to right sizing in that it lowers costs, puts people on the “right” coast as you look at a map and puts them in a better or right/correct place. 🙂
I’ve been calling this “rural sourcing” though in this case, it’s not so rural. I’ve worked with software engineers all over the world, and my default preference is to work with US based engineers. There are tons of talented engineers all over the US who can have a way better lifestyle than might be found here, where the salaries might be 2X but the cost of living is 5X, so even Obama’s $250K “rich” person feels squeezed and needs some sort of equity windfall in order to put kids through college/retire. See analysis here: https://blog.wealthfront.com/college-vs-retirement-savings-silicon-valley/
I’ve been putting together a financial model to see whether it might be possible to actually get on the other side of this equation and move someplace cheaper, but still sell services to silicon valley companies.
Why not save the money by not evening opening an office, having people work from home, then spend more on people and the rest on things that aren’t useless in 2013.
It makes sense at least from a Silicon Valley perspective since everything there is hyper-inflated beyond stupidity so why not expand your business elsewhere where prices are at least grounded a bit in the real world.
Tangentially related, but I just put the finishing touches on a 5-year plan to re-engineer my career from a management role to something more conducive to telecommuting and bought a house in the mountains at 50 cents to the Boston dollar. With that came a much less stressful lifestyle and the freedom to do a lot of the things I couldn’t do in the city. I wonder if this trend will pick up in the next 15-20 years.
I’ve had some friends pass on big job offers in Silicon Valley because everything is too expensive there. “No one goes there, it’s too crowded” actually changed from a joke to a truism.
If you don’t have a $500,000 nest egg for a down payment, even a Google engineer pobably won’t be able to make enough to qualify for a mortgage. Unless married to another Google engineer.
Somewhat similarly, over the past thirteen years, I’ve turned down job offers that paid 20% more but required relocation to Washington DC and South Florida. On the other hand, while I live in a relatively low cost, southeast coast, warm weather, desirable area (to me), my annual salary has been exactly flat since 1999 due to the “great recession” and a couple of layoffs and missed opportunities.