About outsourcing

Date: 2018-12-29

Have you ever heard about outstaffing / outsourcing? It is “an agreement in which one company hires another company to be responsible for an existing internal activity”. Outsourcing is very popular & widespread in IT because usually you don’t need a person on-site & there is a difference in salary.

USA IT engineers have one the highest IT salary. Engineers with little experience usually have more than $6000 per month. There are a lot of people with a lucid mind who ask: is it possible to hire a remote person with more relevant experience and pay less? In the vast majority cases, it is possible. On one hand, they know about the difference between Moscow & Volgograd salary, but on the other hand, it is good enough salary in case of Volgograd.

If you want that kind of work you should know English at least C1 & be at least senior. However it is at the top level, it means that an average IT engineer salary is less. Also, keep in mind please, that every link in the chain from a customer to an engineer decrease the salary because every chain has interest.

Let’s calculate.

Our international customer wants to hire an upscale engineer in an outsourcing company. The customer has $6000 for that.
The outsourcing company has his own interest, risks & has to buy equipment. Let it be $1500. $6000 - $1500 = $4500
Also, don’t forget about 50% TAXes, please. $4500 / 150% = $3000

What does it mean?

Average maximum salary is about $3000.
You don’t know English… well.. let’s add an interpreter into the chain & decrease the salary.
Your timeshift is too big - let’s add a project manager & decrease the salary.

Is it possible to increase the salary? yes.

You are able to work as self-employed contractors, it allows to decrease TAXes from 50% to 6%.
You can reduce the count of the links in the chain.