RR 315 Offshoring and Latin American Developers with David Hemmat
- Published on:
- June 20, 2017
Offshoring and Latin American Developers – David Hemmat
For this episode of Ruby Rogues we have Jason Swett and Brian Hogan for our panel along with Charles Max Wood and a special guest, David Hemmat from BlueCoding.com. David and the Blue Coding team work to connect developer talent to businesses in need through a thorough process of vetting as well as a database collection of potential developers. Check out this episode to learn more!
How did you get started?
David talks about going to school in the Dominican Republic worked locally, but later found work with US companies. He also set up a friend with a US job and they realized that there may be a demand as someone to bridge the gap. Developers did not have the access or a way to reach opportunities aboard so he started BlueCoding.com.
About Blue Coding
BlueCoding.com has clients in the US and Canada. They focus on Latin America due to having close timezones in relation to the majority of companies that would be looking for developers. Also, Blue Coding helps in regard to bridging the cultural gap. Latin American work culture can be different that US or Canadian culture. David talks about how it’s much of a communication difference. Developers sometimes will agree to jobs they are unable to do and are timid to communicate and often just disappear. Despite this, many Latin American companies spawned from United States companies and will tend to have a similar working environment and culture as US companies.
The General Experience With Offshore Hiring
David and the panel chat about their offshore hiring experiences. David expresses that there is sometimes an issue of many developers taking on work, and then seemingly disappearing. Often times coming back with excuses or in some cases actually over committing to work and just failing to communicate properly from the start. In some cases, like with countries like Venezuela, has a less reliable environment for the developers with things like power outages.
“Not All Good Developers Are Good Freelancers.”
Freelancers tend to need a different skillset. Extra communication and need tools in place like time tracking and daily reports , etc. Companies that hire freelancers or offshore hiring in general need to have tools setup as well. David expresses that the best developers often are the ones that already have full time jobs. Blue Coding tries to help those developers find a better opportunity and has structured systems to create a workflow that works for both parties. David talks about having those tools in place for the developer including the time tracking and daily reports.
The Companies Tools.
Blue Coding will also check with the client companies to make sure they have tools as well to help both parties have a smooth workflow. Project management software for the developer to see what they should work on next.
Rates vary between $30 and $45 an hour. David tries to stay away from junior developers, looking for developers with 3–4 years working experience. Some companies pay $30 to $60. Latin American countries generally see a starting rate of $30 an hour. Asian countries can start as low as $10 an hour, but in rare cases. Some developers on the opposite side of things charge $100 an hour.
Getting Offshore Developers
Most people start with upwork.com or Freelancer.com or something like that. Lower overhead but very limited vetting. Buyout fees are very high as well on these sites. There are companies similar to Blue Coding that are staffing companies that exist. Also, direct networking. Networking directly is extremely efficient. If you have a bad work history, networking also comes into play. David talks about their biggest source for developers are other developers, reaching out to find good hires by networking through the community.
Dealing with ‘Boom and Bust.’
Freelancers tend to run into boom and bust cycles, loads of work followed by slow spells. David tries to avoid this by hiring carefully and picking clients carefully. Looking for long term projects, either be a continuous flow of projects or one large projects. With this focus on long term relationship building, BlueCoding is able to have much lower rates. Other companies usually don’t have safety from downtime, offering internal work to make up for it.
Finding Companies that Hire Offshore
Most countries have job boards to help. Also, technology specific job boards. But it’s hard to compete there. US companies won’t hire offshore developers for the same rates and the same skills. You have to be really good. David pushes developers to have plenty of experience.
How to Get Noticed?
Companies can be prejudice, but isn’t seen too often. Becoming a top level talent is key. Being average is harder. As an average or novice in an area with no community, finding online communities, Facebook groups, LinkedIn communities, working on open source projects, and going to events can help.
Working remotely and being good at it [22:02]
It’s a two part effort. Companies can have tools to make things easier, but as a developer, you can request them. Communicate all online. All of the office talk should be online via Slack or some other documented system. Code reviews and Peer programming helps remote developers feel like a part of the team.
Onshoring vs Offshoring
Some companies are hiring remote developers from the US. Why would someone want to hire from outside the country? Ultimately it comes down to finding a developer that fits in with what a company needs as well as matches the budget. Cost of living can change the rates for developers as well as where the company is located. David expresses that he wants to find really good developers, even if it means reaching out to Brazil or other parts of Latin America.
Medical, Taxes, and Benefits
Each country has different laws. For example Dominican Republic has a law that states if you contract someone for over 3 months, they are considered employees and require benefits. Some countries allow Freelancers to work long term. Health care varies between companies.
The Finical and Risks.
Freelancers and hourly workers tend to have less working time, spending some time each day to chase down work as well as managing time. Developers in general should notice that projects in general can have budget cuts and even end prematurely. In general a developer working as an employee will need to account for the benefits and extras thrown in when considering their rates.
What kind of companies are looking for this as a solution to their staffing problem? Most companies are smaller companies, 1 to 20 employees with a lot of long term development work. Generally three sectors, non tech companies that need tech work, digital agencies, and tech startups or established companies that already have a software product that needs to be maintained.
How to find the Companies?
It’s a work in progress. References are vital, David talks about how vetting for developers ends with a very happy client that gives references. Also they spend a lot of time networking, conferences, meeting people online as well as cold calling. David mentions that it’s hard to express the quality of their service through email.
Getting Started with Blue Coding?
Go to BlueCoding.com and find the link that says “join the team if you’re a developer” and you can connect that way. Just reach out to them and they will set up a conversation with you and see if there is a good fit. Then once a project comes in they will set you up with the vetting process.
BlueCoding will want to set up a call with you. Reach out to them and setup a call. They will work through if you need a developer and what that developer looks like in regard to technical skills, personal skills, and general ability.
Then the developers and clients have a meeting to make sure everyone is comfortable. Being comfortable is the most important part for this connection to end in a long term relationship.
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Links to Keep up with David
Offshoring and Latin American Developers – David Hemmat
The other day you said you couldn’t make it today.
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Hey, everybody and welcome to the Ruby Rogues podcast. This week on our panel we have Jason Swett.
I’m Charles Max Wood from Devchat.tv and this week we have a special guest and it is David Hemmat. Is it Hemmat or Hemmat?
Do you want to just give us a brief introduction and then, we can dive right into our topic today?
Sure. Thanks a lot for having me. Basically, I’m a developer. I’ve been doing Ruby on Rails development for about 6-7 years now. And I went to college in Dominican Republic. When I graduated, I started working for companies here locally. After that, I started working for companies remotely. At some point, there was a kind of gap that we could bridge.
There were lot of good developers here in the DR, really talented guys – excellent English and excellent skills. They are probably doing low paid jobs here. Part of it was that they didn’t have access to better opportunities. By access, I mean, these developers didn’t have a way to reach these opportunities that we have abroad. And at some point, I have a friend who wrote to me and he asked, “Do you have any developer friends that you might recommend.” I said, “Sure.” I know few developers. Let’s talk about what you’re looking for and I’ll sit down and find somebody for you that’s a good fit. That’s what I did. He started working part time with this developer. And we have this opportunity that we could turn into a company here. So that’s pretty much what we’ve been doing for the past 3 years.
We have a number of clients in the US and Canada. We try to connect them with developers in Latin America. We focused on Latin America, specifically, for a couple of reasons. One of the main reasons is time zone. We’re looking for people who are in the same time zone as our clients. We generally look between Eastern Time, Pacific Time and Latin America’s perfect place to do that. Then, another reason is there are some cultural differences between developers and work culture in Latin America and in other parts of the world. One of the most common complaints that we had from our customers when we’re talking about having developers abroad was we’ve had different communication issues with them. We’ll speak to the developers. We’ll ask whether what we want to do is possible. Everybody will say yes. And then, they’ll come back a month later and nothing will be done. It’s a simple matter of feeling uncomfortable saying no or raising your hand when there’s an issue. You know, these are all common complaints that we’ve had. And we found that developers in Latin America have had a lot of experience working with US-based companies.
The work culture that’s been adopted by software companies in Latin America is generally US culture. So you’ll get the same kind of behavior. They’ll be comfortable raising their hand saying, “This is a bad idea. We should talk about it.” Or saying, “I just don’t understand. Let’s discuss this before we move forward.” That’s just something that we have seen. That doesn’t often happen in other parts of the world. That’s not to say that developers in other parts of the world aren’t great. It just that you have to learn how to work with them. That’s a little bit more difficult some times.
Yup. Now, it’s interesting just talking about this from this standpoint because I’ve hired people to do various jobs for me from Philippines, from Pakistan, as well as from Brazil and Argentina. I’ve worked with people from Mexico, some of the companies that I contracted with. Some are programmers and some of them aren’t. It’s interesting just the way you’re talking through this. I don’t know that I had anyone tell me yes and not deliver. So much as they would just kind of disappear for a while. In Pakistan, India and Philippines, it’s like, “Hi are you there?” And then like, a couple of days later, you finally get a… “Oh sorry, I’ve had this thing happen or we had a typhoon or something.” But you know, some of this people, it’s like, “Well, you don’t have a typhoon every other week.”
That’s one of the indications… just for anyone that’s a freelancer. It’s one of the indications that maybe they’re overextending. There’s a lot going on and yours isn’t high enough in the priority list for them. That’s usually how I read that. That’s one of those things that if you’re working or you’re freelancing, it’s just always kind of comes back to the idea that staying in constant communication with people you’re working with the people you’re working for is very important. And if you can’t do that…
I think there’s a few limits there. For sure, there are some environment elements that affect. For example, we have tried to work with people in Venezuela, which is in Latin America. We’ve decided that for the most part, it’s not a good idea. That’s funny because I’m originally from Venezuela. But just the current political economic situation there, it gives us a lot of trouble. You know, there are power outages, internet outages, and so we can’t have somebody who’s reliably working with us every day, unless they setup a system to work around those issues. And so, I’m sure that there are some environmental issues that affect.
But the other thing is that, not all developers are good freelancers. In the sense that being a good freelancer requires a little bit of a different skillset. You have to be willing to communicate on time and adequately. And say, “Look, I have a number of things that I have to do. I’ll be able to get your item in three days or one week sometimes.” And a lot of people just don’t feel comfortable doing that. The way we’ve approached this is that we’re not necessarily looking for freelancers. In fact, most of our developers are not freelancers. They are people who have been working full time job elsewhere and we’ve offered them a better opportunity.
We’ve tried to structure some things around that to avoid these communication issues. You know, it is simple stuff. Time tracking is one. So we have a pretty uniform way of tracking time. We have developers to kind of log few hours every day and they work with small description of what they’ve been doing. Another is to have a little email sent at the end of the day, kind of like a daily report saying, “Oh, did I work on this so I’m expecting to work on this.” And these are some of the challenges I’m facing.
So that’s on the developer side, we have to have some of these tools in place so that they can be successful. Because you can take a great developer and put him in a position… if you don’t have tools in place where they can communicate properly, then they’re not going to be successful.
I can just second that. So of the three people that I’ve worked within Latin America, I have one guy that he was in Brazil and just didn’t work out. That was the main problem. Whereas the other two… the developer that I’ve worked with in Mexico, I didn’t hire him. He was just contracting for a company I was working for. It was a pairing culture and so he has to be on us every day. A lot of these issues didn’t exist. The last person that I’m thinking of has actually been on the show, I think once or twice, and did some work for me for a few years. He was really good about just making sure that I knew what was going on. Down in Argentina… I mean, yeah, that’s usually what it boils down for me. Am I hearing back from these folks? And do I know what’s going on?
Right. And these are issues that you could have with developers in the US if he’s remote also. It’s just different to have somebody in office. In other part that what we’re trying to work around is that we have to work with our clients and make sure that they have a system in place. Do you have proper project management tool where developer can go in and see what he’s supposed to be working on next? Are you using any kind of development methodology? It could be Scrum. It could be any variant that you want. But just having some of these things in place, really makes things move forward quickly. Ultimately, there are challenges we’re working remotely. The advantage is that you get really good developers that you wouldn’t be able to find locally. Or you wouldn’t be able to find them for a good rate.
Yeah, that’s fair. You’re bring up rates and I’m sure it varies from country to country and person to person depending on experience and things like that. But generally, what kind of rates are you seeing people get?
I think most companies like ours… we tend to be $30-$45 an hour. We tried to work with more experienced developers. I think most of our developers have this 3-4 years of working experience. We don’t like working with new developers very much because ultimately, you don’t know what you’re going to get. There are other companies out there that are more expensive. I’ve seen $45-$90 an hour. I’ve seen $30-$60. It really depends on the company. But I think, starting at $30 in Latin America is pretty common. In Asia and other countries, it really varies. I’ve seen super low rates. I’ve seen $10 an hour from some companies in India. Then, there’s also developers here in the DR that will be charging a $100+ an hour. What we do is we’ll sit down and say, “Okay, what is an acceptable budget for you?” And we’ll try to work around that budget to find somebody who’s really good within that rate.
That makes sense. If you’ve convinced me or some other business manager, “Hey, look. Maybe I should hire in your shore, which is in a similar time zone to me – US time zones.” That usually means South America or you know, something close to the US.
How do I get started with this? Do I have to go in an agency like yours or can I find people other ways?
Oh, there are several ways to do it. The first thing that everybody tries is Upwork or Freelancer, or one of those companies. There’s ups-and-downs to that. In that kind of company, you’ll have a generally lower overhead, I think, generally, between 5% and 20% above whatever the developers are getting. On the down side, there’s pretty much no vetting so anybody can create a great profile. There’s a lot of shady stuff going on, I guess. There’s a lot of developers working with somebody else but they won’t let you know about that. Ultimately, you just have to be careful and you have to spend a lot of time kind of looking through different developers to kind of figure out who the right guy is for you.
The other down side to that type of companies is that they have fairly large buy out fees. So if you decide at some point, “You know what, I don’t really want to go through these websites.” Payment system – I want to hire this person directly. I haven’t done it personally but I know that they have pretty large fees to do that. There’s a lot of companies like ours, which are essentially staffing companies. We offer, a little bit, more personalized service. We’ll sit down with you trying to figure out what your business is, what your technical needs are, what your team looks like. And based on that, we’ll create a profile of what developer this needs to look like. We already have a network of developers who regularly work with. We’ll look into that network and try to find somebody who’s adequate. There are a number of other ways. If you have developer friends in Latin America, I would go ahead and ask them. They’ll probably recommend somebody good.
Yeah, that’s how I wound up with the guy that worked for me for a few years out of Argentina. He listened to the podcast and he wound up chatting. Then, I wound up hiring him for some work and then, wound up hiring him for work.
I don’t think people understand how powerful that network effect really is. I see so many people getting great opportunities because of the people they know. I also see a lot of people missing out opportunities because of their work history, because of the communication issues we’re talking about. Just as someone will recommend that, “Yes, you should work with this person because she’s awesome.” They’ll also say, “You probably want to avoid that person because they’re unresponsive.” I think that’s really important to keep that in mind that your reputation, good or bad, tends to follow you around. That saves an individual developer who’s looking for some help in a project. It saves them some time if they can just go to Twitter, to their close circle of friends, go to business associations, saying, “I’m looking for someone to augment my team. Who can I go to?” I suspect that’s sort of what you provide David is sort of that.
Yeah, it’s essentially that. You know, our largest source of developers by far is other developers. So the first thing we’ll do when we need a NodeJS developer is we’ll go ask another one. They will say, “Hey, we have this new project. We know you’re busy. Do you have anybody you can recommend?” Then, we’ll put that person in a vetting process but that generally, results in finding new people who are really good on what they do. Likewise, people that we’ve done work with, that we’ve been happy with, we call them again. Sometimes we have a project that’s a year long, two years long. And the project will drop off and whenever we have an opportunity, that person will be our first pick because they have a good track record of working with us.
That makes sense.
David, that kind of leads to the question that I was going to ask you. All freelancers that I know and agencies that I’ve worked with have had a boom and bust cycle, where they get really busy and then, things get really slow. They get really busy, and so on. How do you deal with that boom and bust cycle?
I think we’ve dealt with it by selecting our customers carefully. What we’re looking for is we look for smaller companies, which is the people we could serve well – that have long term projects. Long term projects sometimes mean they’re an agency that has a continuous flow of projects. And sometimes, it means they have one product that you’re developing.
The reason we look for these specific types of clients is that the best developers already have jobs. The only way we can convince them that we have a better opportunity for them and they should join us is we could offer them a long term engagement. We’re looking for people who ideally have no end in sight for this projects. That allows us also to offer more affordable rates. There are other companies out there that will have much higher rates and then, they’ll cover the downtime. They’ll have a developer hired with a monthly salary and whenever there’s work, good, whenever there’s not work, they’ll have them working on internal projects, probably.
One thing that I’m wondering about, I mean, most of this conversation has been pretty US-centric. I guess first world centric. We’re in a wealthy country and we’re trying to offshore maybe to save a little bit of money. And you know, finding opportunities to get high quality developers from a market that isn’t as competitive or hard to find people in. I’m curious. If I’m one of those people, let’s say, that I live in Latin America somewhere, how do I go about either meeting people or finding agencies like yours that are going to allow me to get the kind of work that I want? Because Upwork, it seems like, it’s kind of a hit or miss if you’re going to find somebody that will actually hire you. What are my other options?
That’s a tough question. The good thing for developers is that they only wait one job at a time. It’s full time job. They only need one hit. You know, there’s a lot of job boards that are using each country. Each country has its own job boards that are mostly focused on local jobs. There’s sites like Working Nomads that I think work remotely. Well, there are opportunities from companies all over the world, mostly Western Europe, the US and Canada. Those are places that I generally recommend people to look at.
Then there’s also technology-specific jobs around. I don’t recall any of them right now but I remember this big rails one, something like, Rails Jobs. And so, if you’re free, you might want to look into those. The truth is, it’s pretty difficult to compete if you know you’re applying for a job that is from a US company. It pays US salary. Then, there’s no real reason for somebody to hire you as oppose to an equally qualified developer in the US. So you have to be really good. That’s the first thing I told developers that want to start working with us. I’ll have a brief conversation with them after about their work history. Oftentimes, we’ll say, “Look, you’re on the right path but come back at a couple of years because you still need to gain some experience so that we can place you to the right jobs.”
That makes sense. The other question I guess I have is how do they demonstrate their expertise? I mean, is it harder to just even get looked at if you’re from one of these Latin American countries as oppose to being in the US?
In searching companies, I don’t think it’s that common. I have a number of friends who are working for Silicon Valley start-ups from here in the Dominican Republic. They have very active Github profiles. They have a great work history. The companies are just looking for talent wherever they can find it. So I think that’s once your top level talent, then, it becomes a lot easier. That’s mainly it. If you’re okay, if you’re average as a developer, I think it’s more difficult. It depends on how open the company is to hiring abroad also.
There are certain complications that come with hiring abroad. Sometimes it’s tax implications. Sometimes it’s, you know, do I want to hire remotely or would I rather have somebody in my city who can go to my office every once in a while? There are some of those things that the company that’s hiring needs to be aware of and needs to think about how they’re going to handle. That’s also one of the things that we try to take care of. We take care of all the legal and tax implications for the developers. Our clients are just working with a US-based company.
So one more question that I have, just related to a lot of this is I had a conversation with somebody from Trinidad, I think, a while back. I’m putting the other course on how to find a job as a developer. It’s mostly aimed to people who have been working in the industry for a few years and are looking for a better job. It talks about the network effect that Brian mentioned. But anyway, when I was talking to this particular developer, he was new-ish, and there really wasn’t a large community on there that he could go to kind of level up with friends, or with any kind of in-person help. So if people are in that kind of a situation in Latin America, you know, what are they options there? It seems like here in the US, you know, you can still find a lot of English speaking friendly opportunities. And down there, if you don’t speak English or you’re not connected with the community in some way, it feels a little bit harder to get to the point where you can actually get hired.
Sure. There are less networking opportunities down here. It depends a little bit on the country. Argentina, for example, has a big developer community. Chili does too. Brazil is a huge country, huge numbers of developers and they’ve got their own things going on. Then, there’s a lot of smaller countries. Here in the Caribbean, for example, developer communities are smaller. In the Dominican Republic, we have a fairly active developer community in the capital. But in where I am, there’s pretty much nothing going on. So I’m in the same situation. How do I get involved with developers around me? It’s difficult.
I can say that there’s always a chance to try and join some open-source projects. There’s a number of Facebook groups or LinkedIn communities that one can join to try to be a little bit more involved. Then, there’s a lot of people that are actually making efforts to build development communities. In this area, I have a friend who organized Pycon in the Caribbean. It was a pretty big undertaking, you know, for a country like ours. They have guests from a dozen countries, speakers from a number of places. And just setting all of that up is pretty complicated but there are definitely people who are trying to work to make those things happen. If you’re a lonely developer in an island in the Caribbean, the first thing I’d say is try to find some online communities that you can join. There are a lot of places that are up there, sharing ideas, sharing content. That’s a good place to start. And then, try to attend events whenever they are near you.
Yeah, that makes sense. I’m also trying to create an online community where people can come here that doesn’t cost a lot but, you know, it’s tricky for people to make all of that work.
Yeah, it’s definitely a challenge.
I don’t know if I have anything else to ask you. Is there anything else that people don’t think about when they start thinking these kinds of things?
Sure. There’s a lot of things that they don’t think about. Maybe I can bring up some of them. One of the most important things that I could bring up, in terms of working remotely, being good at it and being successful at it, is that it’s a two-part effort. From one side, you know, the employer has to make sure that tools and the systems are in place so that could happen. But developers can also request them. There are simple things that you can do.
For example, make sure that if you have an in-house team and you have some guys working remotely, make sure that everything’s written somewhere online. Right? If you use Slack, then, write everything on Slack. Or you use a project management tool… just because there’s a lot of office talk that goes on and then, you’ll leave some developers out. You have to make those developers really feel like they’re part of your team. Another thing is that there’s a lot of things that I would encourage that some companies don’t think of, things like, code reviews and pair programming, which look like an additional cost but ultimately bring up the quality of the code. Allow the developers who are remote to feel like they’re really part of the team.
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Makes sense to me.
Makes sense to me. I have a question. There’s a lot of areas around the country. I’m going to take a kind of a localized area – Minneapolis, St. Paul versus Duluth Minnesota is couple of hours north of there. Hiring software developers in the Minneapolis state is… it’s expensive to hire local developers. So some of the companies in that area are doing something called “onshoring” where they’re essentially hiring people from Duluth and other smaller areas where the cost of living is smaller. If that’s an opportunity, if you have a company that’s willing to hire a remote developer, what would you choose to go with someone in another country as opposed to someone in the same country? I’m sort of wondering. I can think of a few reasons myself but I’d like to hear what your experience tells you.
One thing is definitely cost. What kind of rates are we talking about in Minneapolis, for example? What are your thoughts on rates?
Well, it’s funny when you say that you’ve got people that are getting $35-$45 an hour. If I do the math on that, that’s around $90,000 or so. If you you’ve got a full time job, you know, that’s $90,000 a year. In the United States, it’s going to be worth so the person can be responsible for their own taxes. That’s still, you know, you’ve got some developers working in areas where I’m…. I’m east of Minneapolis. It’s 80 or 90 minutes away.
Software developers’ rates here are anyway from $60,000-$85,000 a year. That’s the salary here. It seems you’ve got benefits involved in that too. So if you’re hiring someone full time… but if you’re hiring someone as a contractor, I’m kind of wondering. You’re not talking about the $10 an hour kind of an hour rate that some place is charging. You’re talking about a higher rate. That’s a big of surprise. I was surprised that the rates were higher than I thought they were going to be.
I know, definitely. I think that’s common thing that we need to discuss with our clients. You know, the first thing I ask them is “Okay, what type of developers are you looking for? Let’s have a conversation trying to figure out that. And then, what is your budget?” Because depending on what your budget is, we can find somebody for you in one place or another. Ultimately, our goal is to find the best developer possible for your project that fits within your budget. We have had great developers at $20 an hour, really, really good guys. And then, we have great developers at $40 an hour.
Big factor was cost of living. If you live in Rio de Janeiro and Brazil, the cost of living is just really high. It’s very close to the US in a lot of senses. So their rates are higher. Again, it depends on where you are in the US. We have number of clients in New York, for them they’re paying half of what they pay there, for example. The other factor is how easy it is for you to find a developer in smaller cities in the US where the cost of living is lower. We have never thought of focusing in the US as a place for finding developers but just having a conversation with you makes me realize that that is definitely a possibility.
To answer your first question, which was, “Why would we want to go look in Brazil when we have good developers right nearby whose rates are even potentially lower?” The only real reason I can give you is that we want to find a really good developer and how easy is it to find a good developer in that smaller town? It’s a matter of the fact that we have a network in Latin America. We don’t necessarily have a network in the US, not so much. And so, when we have a new Rails job that we need to fill, we already know where to reach out to in Latin America.
True. It’s that network effect.
I was going to wonder… this is one of my thoughts. I’m not sure how true this is but when we talk about the cost of living, I know what the health insurance system is here in the United States. I’m not that familiar of what it is in Latin America. I suspect that that also has something to do with the rates and the cost of living because a person who’s working remotely or freelancing here in the United States has to cover the cost of their medical coverage themselves.
Yeah, it depends on the country. I’ll give an interesting example, which is the Dominican Republic. Basically, the law in the Dominican Republic states that if you work for somebody as a contractor or as an employee for more than 3 months, you’re considered as an employee. What that means is that if I hire somebody in the US for more than 3 months, then I suddenly I owe them a bunch of benefits – social security or the equivalent. We have health insurance, pension fund. They have vacations, they have severance.
So there’s a bunch of things that get factored into that. That’s part of what drives the salaries down in some of those countries because the company has to deal with all of that. It depends on the country how we handle it.
Dominican Republic is a country where we’ll potentially hire people directly as employees so they’ll get a lower salary than they would have if they work as contractors but they’ll get all the benefits. And then, other countries, they just allow developers to work as freelancers for the long term. And what we ensure is they’re actually paying their taxes properly. They’re reporting everything properly. Health insurance in Latin America tends to be cheaper. A lot of countries have either good public health or they have cheaper insurance plans. As you know, the cost of health care, in general, is probably lower so the health insurance is cheaper in general. There are a lot of things to consider. There are taxes, vacation time, all of these things that our contractor in the US would have to consider too.
I would have to bring something up real quick. I don’t want to take us down the rabbit hole with this but I do want to mention it. What is the distinction between hourly rates and annual salaries? A lot of people think, “Okay, if I’m making a $100,000 a year, that’s $50 an hour times 2,000 hours in a year. That is a $100,000 a year.”
I think I actually heard Chuck talking about in some of the freelancers show some time ago, help people come up with their freelance rates that way. But it really doesn’t work that way. If you charge $50 an hour as a freelancer, you’re not going to make $100,000 a year because you don’t get paid vacation and you’re not going to be stealthily utilize… to your whole entire time. And so really, you’re going to probably make some $50,000 a year if you charge $50 an hour. That’s like from the freelancers’ end. From the employers’ end, I don’t know this because I’ve never been… but I understand that your fully loaded cost for an employee is probably going to be closer to twice the employees’ salary. Correct me if I’m wrong if anybody knows better.
Yeah, it’s closer to about 40%, in most cases. But when I throw out the numbers and doing that Math in my head, I was doing it based on the thought of the effect that David was talking about bringing people into a project for full time. That becomes tricky because to Jason’s point, I think it’s fully important that everybody who’s thinking about going in freelancing keep that in mind. Because if you do the math, as I did in my head, and the math that Jason suggested, there’s also the thing about the fact that you’re lucky to get… if you’re freelancing because I’ve done this before. You’re lucky if you get a full day, you know, you’re lucky to get 4 hours of work done. Because the other 4 hours, you’re chasing down billing, you’re doing invoicing, you’re doing some marketing things like that.
A long time ago, freelance websites used to have an amazing calculator that made you answer about hundred questions to help you compute your freelancer rate. That’s gone now. Everybody has any things like that, it’s nice to share too.
So we’ve looked at the developers’ perspective. There’s a couple of things to consider. One is that if you’re working on all of these projects, there’s always a task that’s going to end. Unfortunately, if the client who’s hiring you has to fund employees and suddenly their budget is running out, our remote developers are the first one to be cut. It’s an important situation but we understand. And so, what we try to do in our side is we try to find them work as soon as possible. But there’s always, you know, a possibility of down time with this kind of work.
The other thing is that their covering all of their benefits so a lot of companies in the US will give you different benefits. Sometimes it’s vacation time or good health insurance. There’s a number of things that do add on to the total cost of having an employee. Here in Dominican Republic, we’ve calculated about 50% above whatever they’re paying an employee. There’s different ways of doing it in the US depending on what kind of benefits you’re giving. And then, there’s other things to consider just with remote developers versus on site, you know, office space equipment, all that kind of stuff.
One of the things I’m wondering about… Jason actually says this was his question. But I’m going to ask it anyway. What kinds of companies typically looking for this sort of solution to their staffing problem?
I can’t tell you what kind of companies. I can tell you the ones that we’ve worked with at least.
I’m saying, I can’t tell you which types of companies because we haven’t had a lot of experience working with medium to large companies. Most of our clients have been smaller companies. There’s some common things that I’ve seen most of them have. There’s usually 1-20 employees. I think they have a lot of development work, long-term development work.
We found that there are generally 3 sectors. One is companies that are not tech companies but do have an important tech component to them. So for example, we have some clients that are online shops. They have, probably, a team of 5 that manages everything but they don’t really have in-house developers. And so, we kind of provide them with somebody who can be their CTO and developer at the same time. That requires a type of developer who has experience understanding things in the business perspective.
Then, we have some clients that are digital agencies that just have a lot of work coming in. They have enough work where they can move developer from one project to another with pretty much no downtime.
And then, we have a number of clients that are startups or established companies that have software or developing software products that need to be maintained in a long-term. Most of these are, you know, are companies that have been building their product for at least a year or two. We have a roadmap of how to get where they’re looking to get.
We have had some companies that weren’t self-funded. They were bootstrapped but those are always kind of dangerous because they tend to hire 3-4 developers and then their money runs out. And then, they have to cut down. We’re trying to avoid that kind of situation if that makes sense.
Sorry, I stole your question, Jason.
I’m very upset. You and I are going to talk about this later.
Jason, I think you wanted to know how we find clients.
Yeah but Chuck stole my question. And then, I told a joke that nobody laughed at.
No, actually, I wasn’t answering that specific question. I think Chuck asked me what type of companies we’re reaching out too.
That makes sense? As to how we find clients…
Yay, I’m off the hook.
It’s a work we’re still trying to figure out. But you know, one of the main ways is references. In general, the people that we’ve worked with have been very happy with our work. The thing that’s most important to our credibility is how well we vet developers. And so, we have to say, “We don’t have a developer for you. We’re sorry.” You know, go to somewhere else. And the reason is that we’ve much rather do that than introduce somebody who’s not a good fit for the project. Once we do that, we’re in trouble. So we’ve had a lot of references. A lot of it has been networking, different conferences, different people we’ve met online.
And then, we’ve also done some cold-calling, which has been successful sometimes and not so successful other times. I’m sure you guys have all received tons of emails from companies in India that are looking for the same thing as we are. I feel that we are offering a high quality service but it’s hard to convey that via email. I think a lot of our clients are now just coming through friends.
So if there’s a company out there that wants to hire Latin American developers, or in the other end of things, if there’s a Latin American developer who thinks you might be able to find them work, what do you recommend?
You can go to our site – www.bluecoding.com. Blue as in the color. We have a little section that says join the team if you’re a developer. And you can drop us a note if you’re looking for a developer. Either way, it all starts with little conversation. So if it’s a developer role, we see their CV. We’ll have a little chat with them and see what they have been doing and what they’re looking to do. If we have a position at the time where they might be able to be a good fit, we’ll put them through a vetting process. If we don’t at that time, then, we’ll add them to our database of developers. We’ll tag them with the technologies that they work with. Once we have a project come in, then, we’ll look them up and give them a call to see if they’re still available and try to put them in a vetting process.
If you’re a company that’s looking to hire developers, it’s fairly simple. We want to have a call with you and try to figure out what you’re looking for. That means what are you building? What industry are you in? What does your team look like? What are the difficulties you’re facing? We’ve had clients coming after developers and they actually didn’t need them. What they need is a better project manager and process. So we’ll try to help them figure that out. And if we determine that you actually do need a developer, we’ll try to figure out what that developer looks like, you know, what their skills are, in terms of technologies that they’re going to be using, in terms of seniority. What kind of people skills do they need? We will go and find somebody who has those.
We put everybody through an extensive vetting process. Vetting process is a number of interviews. Some of them are technical, some of them are not. But ultimately, we want to introduce one or two developers max. We want to say, “Look, these are the two guys that we think might be a good fit for you project. Let’s have a conversation with them.” Once our clients meet these developers and are able to have a little conversation with them, we want two things. One, we want the clients to feel comfortable with the developers. Is this somebody who you’d like to work with? And the second thing is, we want the developers to feel comfortable with the clients. So it’s a two-way street. We’ve had developers back out of deal because they didn’t feel comfortable with the opportunity. That wasn’t going to work out with us because ultimately, we want this to be long-term relationships. We’re not looking for three-month projects. We’re looking for long-term ones.
Alright. Well, let’s go ahead and do some picks.
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Jason, what are you picks?
Okay so I have one single pick. It is… I’m just reading the description on Amazon – Samsonite Colombian Leather Flap-over Laptop Messenger Bag. It’s the laptop briefcase I bought recently. I’ve just been logging my laptop around in a backpack for a long time. And since, I’m not in high school anymore, I thought maybe I should have a grown-up bag. I bought this online and it’s been really great. I’ll probably have it for years and years to come, definitely, worth the money. So check it out!
Nice. I have a really nice bag like that but it’s starting to give me shoulder issues so I had to switch.
Same, I went back to the backpack for that same reason. I had a nice shoulder bag and looked all professional. Now, I look like a guy who’s trying to crash a high school or something like that.
Do you have some picks for us, Brian?
I have one pick because well, I have that MacBook with the Touch Bar. I’m one of the rare people who enjoys that Touch Bar. Because it actually does something for me because I’m using an app I use for a long time called BetterTouchTool. BetterTouchTool is great because it lets you do keyboard shortcuts and mouse gestures and things like that. Bu they have support for making your own customized stuff for the Touch Bar too so you can… if you’ve got all these blank space because their app you’re using doesn’t support it, you can go ahead and put your own stuff up there.
You can make things that are available on the Touch Bar and you can make shortcuts that are applications-specific. I’ve got some special things for when I do presentations on my Touch Bar that I can just activate. I also have quick keys on my Touch Bar for switching my presentation software and my terminal. It’s really handy… and the web browser. It’s just really handy to be able to take control over that thing. And I think it’s… if you find yourself with one of these laptops from work or maybe bought one because you needed an upgrade, you’re just not getting what you need from the Touch Bar, check out BetterTouchTool! There’s a nice trial for it. The application’s not that expensive. And it’s incredibly powerful if you dig into it.
I probably admit I’ve been a little bit skeptical of the Touch Bar. I’ll jump in with a couple of picks here. So things are picking up a little bit with the show. And I guess I have to talk about this at some point on the show. If you’ve been listening to Ruby Rogues for a while and you’re subscribed to the RSS feed, you’ll notice that I have spun up a new show called My Ruby Story and I’ve been putting it on the Ruby Rogues feed. In fact, if you’re paying attention in your podcast app, that actually now says All Ruby Podcasts by Devchat.tv. So it hints that I’m working on another one, another two, actually. You know, kind of keep that in your head if you want just Ruby Rogues, you can actually go subscribe to Ruby Rogues Only. If you want just the My Ruby Story, then, you can go check that out, as well. And yeah, all of that’s going on.
One other thing that I’m going to pick here really quickly is something that I’ve been working on. I owe a little bit of an explanation to the audience with this. I was going to put Ruby Remote Conf. I think it was next week or the week after. And I have a bunch of stuff come up. I couldn’t quite line up the speakers that I wanted. And then, I ran across this new format for online events. That’s the Online Summit. I really like the idea so if you’re planning on attending Ruby Remote Conf, of course, this will probably come out after the conference where it’s supposed to be held.
I’m pulling together Ruby Dev Summit, Ruby Developer Summit. You can go to rubydevsummit.com. A few things that I’ve changed – one is that it’s free to attend. The Ruby Remote Conf would have caused you a hundred dollars or something to attend. You can get an all access pass that can get you into the Slack room that I’m going to have some bonuses for that. You’ll get the recordings, you know, you can download the recordings after the conference if you would like with the all access pass. But if you want to just attend, put your email address in and you’ll get emails about speaker announcements and reminders to show up when the talks are. I’m super excited about that. I’m going to run it for a week. It’s going to be… it looks like the third week in October. Two of the keynote speakers that I’m talking to right now… I may have to move back a week. So it’s either going to be the 16th or the 21st or the 23rd to the 30th, or something like that. Anyway, keep an eye out for that. It’s going to have some awesome speakers. We’re reaching out to them right now. Yeah, I’m super excited about it. Go check that out.
And then, also, Ruby Rogues Parley – I moved it over a Slack channel. I don’t have quite enough people to start paying people to come and do presentations yet. But I soon as I have 20, 30, 40 people in there, you know, paying 10 bucks a month, I’m going to dedicate most, if not all of that money depending on how much it costs to get somebody to come and talk to us for an hour, to come speak to us. So, you know, I’m hoping to line up some folks and so what we can make happen that way. Definitely, go check those out. I know I’ve talked about a lot of my own stuff here but yeah, that’s kind of what I’ve been working on in the mean time for everybody here. David, do you have some picks for us?
Yeah. I have three if that’s okay. I’ll be quick about them. The first is Microconf. I don’t know if anybody has brought that up here but it was my first time attending Microconf. This year I was able to go on April to the growth edition. It was fantastic. It was a small conference. I think we had about a little bit less than 300 participants, is that right?
Something like that. It was terrific though. I agree with you there.
Yeah. You know, there were two things that were particularly interesting for me. One was the mix of content, you know. We had a lot of stuff in marketing which I’m not good at so I learned a lot on that side. We had a, you know, one speaker bring up some accounting things that were really important for SAS companies and I didn’t explain what it was but basically, it’s a conference for Bootstrap SAS companies. And, you know, the thing that benefit from the most was the bunch of great contacts that I made so I’ve met a lot of cool people, had an opportunity to speak to some people that were now working with … clients or provided them services. And, yeah, that was great.
On my way back from Microconf, I passed through New York which brings me to my second pick. I went to visit a client there. And my Lenovo laptop… it was my gaming laptop that I have been using for a couple of years. It died. I’m a Ruby on Rails developer so I basically need to work on either Linux or Mac. And I had this huge heavy laptop that I have ran a virtual machine on so that I could run Rails and it died. And I needed to continue work so I went out to the closest Best Buy and I bought a Mac Book Air. So we have two Mac Books as picks. And it was the simplest cheapest Mac Book Air that I could find and so far, I’m loving it, you know. It is much much much lighter than my heavy little gaming laptop. And it does the job just fine.
And then finally, there’s a book called the One-minute Manager, have any of you heard of it? It’s a great book. … It’s a little story. It’s about 70 pages, I think. It is a story about a guy who is out to find the best manager. And it just has some simple principles. … principles in it that have been really really good for our team. We have a small in-house team of five people. And we work with a number of developers that are not in office. But it has really helped us getting things on track. So those are my three picks.
Nice. And, yeah, we ask people how to connect with your company. If they want to see what you’re doing these days, are you on Twitter, or Github, or have a blog? What’s the best way to…?
Yeah, sure. We have a blog on Medium. It’s medium/blue-coding. We haven’t been able to set the sub-domain up yet properly. But you can check out www.bluecoding.com. We always keep things up-to-date there. And you can also email me at email@example.com.
Awesome. Alright, well, we’ll go ahead and wrap this one up. Thank you for coming David.
Thank you very much for having me.
Alright. We’ll catch everyone next week. Bye, guys.
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