THIS! This is exactly what I hate about being an "Indian" developer living in Bangalore.
It really hurts me that when someone is working with an offshore team they are looking at me as a "cheap resource".
I don't expect the valley crowd to understand this, so let me suggest an experiment. Go to your best developer, and tell her that you are there in the company cause she is "cheap labour", and if it was possible in a fraction of second you would get an engineer from Google and would hire him to do your job! Repeat this constantly for 3 weeks and see if her productivity drops or if she is still around! Its really painful to spend so much time, understand your own workflow and identify shortcomings, being self critical, overcome shortcoming with tips from HN / Stackoverflow, to concentrate on the problem at hand and implement a feature and then have someone come in and call it cheap labor. Previously I was working with a team in US and was reporting to an American. I know he was happy with my performance compared with the rest of my team members in the Valley as a lot of R&D work would be assigned to me. I have worked with angualr, react, rails, java, chrome extensions, ios, android apps. I am definetly not the best in any of this. But based on my previous work I think I am fairly competent.
In enginerring its a huge challenge to bring down cost. SpaceX is celebrated cause they have brought down the cost of launching satellites, when ISRO does it, it hursts me to see the first person who says that they were able to do it cheaper cause of the labor cost in India. I respect my work, and take pride in having built it.
If you want to offshore work don't make them feel like that the only reason you are giving them the work is because they are "cheap".
I know this is not what the article says but I wanted to share this even though this is off topic.
I feel what you are saying but... that IS the reason people offshore. Why else would they ship jobs out of the US, deal with funky hours, bad phone connections, and often times very thick accents (which when combined with bad phone connections often render conversations 80% understandable at best) if not to save money? I would feel like crap if I was in that position too but I don't know how you go about solving it and still have a valid justification for offshoring that outweighs the negatives.
Shortage of local talent might be another possibility.
On my team, about half the people are not local--I'm a remotee working from a different country, and a bunch of other folks are outsourced from India and Ukraine. I don't have insight into how much the outsourcing costs, but a figure of $50 per hour has been floated in this discussion. At that point you are pretty much back to local wages, so my guess is it's not the money.
This may not be your typical outsourcing story though. Individual people are actually hired like you would hire anyone local, with interviews and all, except it's a manager traveling there to do a series of interviews and not vice versa. The team is quite stable, the churn reported in the article doesn't seem to be a problem.
Don't feel bad - lots of people just assume it's all about saving money, but sometimes the reason is the available to talent in Bangalore. I don't have any proof except what I have seen over the past 11 years. Most of the places I have worked had pretty good pay in Bangalore ( > 80000USD ) and it showed in the work they do. Also, if any of the good employees who were planning to resign, we did try our best to see if they would be interested in shifting to US instead. While this is anecdotal, I wrote it to point out not everyone looks at Bangalore as cheap resource and good developers are respected irrespective of where they are located.
Quick search for developer salaries in Glasdoor lists avg salary in Bangalore at Rs. 500,000 which would be approx 8,000 USD as opposed to > $80k. The max I could find was for Microsoft and Amazon, which was $19k.
That sounds similar to my experience at a financial company a few years ago (2010 - 2014). The pay in Hyderabad for devs was in the $10K - $20K (USD) range, with most around the low middle of that. These were offshore employees, though, NOT outsourced contractors.
Keeping devs who learned something met with mixed success. On the one hand, the salaries were at least market rate for devs, I think, but management still offered the real Rs.
Average salaries are not a good indicator as there are lots of variation in Bangalore. Firms like Amazon, Flipkart, Walmarts, Ola (not sure of Microsoft) and lots of startups and financial firms pay quite high for their core engineering team.
For example see this : https://www.glassdoor.co.in/Salary/Goldman-Sachs-Vice-Presid.... Average is 60K USD and max 82K USD. Technology does not includes the securities division, where some people do technical work but are paid much more. (Note that to be VP here is not a very senior position )
In my previous firm (a financial firm) we paid people fresh put of college from 16000 USD (support tech) to 45000 USD (trading tech).
I was involved in compensation at my last two firms and was looking for a new job for the past few months - hence I had exposure to this, but sure how to prove any of this though.
It really hurts me that when someone is working with an offshore team they are looking at me as a "cheap resource".
I don't expect the valley crowd to understand this, so let me suggest an experiment. Go to your best developer, and tell her that you are there in the company cause she is "cheap labour", and if it was possible in a fraction of second you would get an engineer from Google and would hire him to do your job! Repeat this constantly for 3 weeks and see if her productivity drops or if she is still around! Its really painful to spend so much time, understand your own workflow and identify shortcomings, being self critical, overcome shortcoming with tips from HN / Stackoverflow, to concentrate on the problem at hand and implement a feature and then have someone come in and call it cheap labor. Previously I was working with a team in US and was reporting to an American. I know he was happy with my performance compared with the rest of my team members in the Valley as a lot of R&D work would be assigned to me. I have worked with angualr, react, rails, java, chrome extensions, ios, android apps. I am definetly not the best in any of this. But based on my previous work I think I am fairly competent.
In enginerring its a huge challenge to bring down cost. SpaceX is celebrated cause they have brought down the cost of launching satellites, when ISRO does it, it hursts me to see the first person who says that they were able to do it cheaper cause of the labor cost in India. I respect my work, and take pride in having built it.
If you want to offshore work don't make them feel like that the only reason you are giving them the work is because they are "cheap".
I know this is not what the article says but I wanted to share this even though this is off topic.