Reply
cancel
Showing results for 
Search instead for 
Did you mean: 
Reply

With the Russian Ruble so weak, should their programmers be cheap?

Highlighted
Active Member
George B Member Since: Jan 21, 2016
1 of 67

2 years ago, a $25 per hour rate was worth 850 rubles.

Today, $25 is worth 2,100 rubles.

 

The math says $10 is worth 850 rubles.

 

I am trying to hire a fulltime worker that has good, but not great, javascript skills.   I certainly could hire someone here in the US for $25 per hour, but $10 an hour is more attractive.

 

I would think this is a good job for a Russian:  they could work from home, their hours (assume Moscow) would 9am to 5pm and we would work through skype.

 

I got a message from one guy in Moscow basically telling me that I could never find someone for $10 (he wanted $45).

 

What am I missing?

 

Thanks,

 

George

 

Community Guru
Nikhil D Member Since: May 28, 2015
2 of 67

Hi George,

 

I am from India, and just like the Russian Rouble, the Indian Rupee has seen a sharp decline as well. However,  that doesn't mean that I am able to make a killing off my jobs as I get paid in US dollars.

 

Since the rupee has depreciated so sharply, prices of everyday commodities as well as other things have skyrocketed and likewise inflation has seen record growth in the last 2 years.

 

Its reminds me of the old adage, "Your salary grows arthimetically, whereas inflation grows exponentially" Smiley Very Happy Smiley Tongue

Active Member
George B Member Since: Jan 21, 2016
3 of 67

Thanks for the response.  With respect, the Rupee has devalued 18% and the Ruble has devalued 270%.

 

Using your logic, if the dollar became weaker, and you got fewer Rupees for each dollar, you would suggest that the my dollar rate stay the same?  Nonsense. 

 

You should get a fair wage in Rupees and be happy that I have an incentive to hire more people.  

 

George

Active Member
Alexandr M Member Since: Jun 27, 2015
4 of 67

Yes, rouble drops, but developer skills don't drop with it. They actually keep growing over time and become more expensive as developer gets more experienced. Of course such currency rates makes russians stop working on local market and go to freelancer sites. But you are missing one point - even with those extra russians there is a big deficit of good developers on market. 

 

Community Guru
Irene B Member Since: Feb 17, 2015
5 of 67

While the conversion rate might mean that the Russian guy is getting more Rubles to the Dollar, it does not mean the price of commodities in his country stays consistent. It rises, meaning he pays more per item. A Russian (or anyone else for that matter) should still be paid prices that are market-related, as you pay for the quality of a service, not the value of their currency.

Active Member
George B Member Since: Jan 21, 2016
6 of 67

Hi Irene,

 

Thanks for the reply.  Do you really think that a Russian programmer that made 850 Ruble per hour 24 months ago should get a raise to 2,500 ruble?  Why?

 

Here is the way financial incentives work.  The Russian economy is saying that dollars are much more valuable than they used to be.   The Russian economy WANTS more dollars.  I am trying to give them more dollars only because it is in my interest.  Guess what?  If I don't get a benefit, I will just hire here in the US. 

 

Which is more valuable to a Russian a job at 850 ruble per hour or NO job at 2,500 ruble per hour.  That is the choice.

 

George

 

Community Guru
Petra R Member Since: Aug 3, 2011
7 of 67

Will you happily pay more if the exchange rate goes the other way?

 

This is Supply and Demand.

 

If Russian Freelancers can get work at the rate they are asking they will not drop their prices, regardless of what the exchange rate is doing

 

People don't ask for the rate they need to survive, they ask for the price they can attract clients with.

 

Exchange rate and cost of living are not valid bargaining tools.

 

Clients and Freelancers are not in places as such on a platform like this. They are on a worldwide global marketplace where prices are determined by a complex interaction of supply, demand, and perceived value.

 

The freelancer's cost of living is as much any of your business as the colour of their underwear.

 

You need to decide what the work you need doing is worth to you, then find a freelancer whose skills allow them to perform that work within your budget.

 

 

 

 

Active Member
George B Member Since: Jan 21, 2016
8 of 67

Hi Petra,

 

Wow!! I could not have said it better myself.  This is the first post that has made any sense to me at all.

 

But this is what doesn't make sense to me.  If the price of turkeys goes from $25 to $10 at the grocery store, what happens?  Demand goes way up.   If the price stays at $25, demand does not rise.   Agreed?

 

Now, supposed the government decided to subsidize each turkey with $15 coupons.  The turkey farmer gets the same $25 and the buyer gets the same $10 price.  What happens?  In the short term, we have a shortage of turkeys. In the mid-term, the turkey farms produce more turkeys.

 

That is the way it is supposed to work.  If freelance Russian programmers are really making triple what they were making 2 years ago, I would expect a huge surge in Russians wanting to have those jobs.  Why work for a domestic company when you can make much more as a freelancer?  In the mid-term, the supply should start to drive the price back to the historic price (say 900 rubles).  As the price comes down in dollars (because of the exchange rate) the demand for Russian programmers should go up.  The net effect, it seems to me, should be far more Russian freelancers employed by far more US employers.  And it should stay that way until the currency rates move toward a weaker dollar causing the cost to the employers to rise and reducing demand.

 

What am I missing?  

 

Thanks,

 

George

Community Guru
Petra R Member Since: Aug 3, 2011
9 of 67

George, Turkeys or no Turkeys, as long as the good Russian developers can make $ 30 / $ 40 / $ 50 an hour (and many do) that is what they will charge.

 

You'll also have to remember that freelancer and employee is not the same, anymore than client and employer.

 

If you EMPLOY someone at an hourly rate in the US their cost to you will be much in excess of $ 25.00 as you have all the employment related costs, holidays, sick leave, contribution, office space, computers, work tools, insurance and and and and.

 

A freelancer has to factor those into their hourly rate, and you will be hard pushed to find a good FREELANCE Developer in the US willing to work at a FREELANCING rate of $ 25.00 an hour

 

So essentially you re compring apples and oranges. (Freelancers and Employees)

 

I set my rate to what I can keep myself at or just above full capacity every week.

 

If demand gets to a point where I am turning down too much good work at my current rate I raise it. Should I find that  can't get enough work at my current rate I ma need to revise it downwards.

 

The fact that the Dollar has risen sharply against the Euro (So I am getting more Euros for my Dollars) and I have moved to a cheaper country with a better standard of living did not make me think "OK, I shall lower my price" - It made me think "OH, I can work less hours or buy nicer things and live in a nicer place!"

 

At the end of the day we as freelancers are businesses, not employees.

 

So it makes no sence to charge less when we could be charging what the market is willing to pay for what we can bring to the table.

 

There are enough cheap freelancers - you "could" take a chance on them. Or on a newbie. It's a risk and it could pay off, or cost you more in the long run.

 

Depends on how much of a chancer you are Smiley Wink

 

Active Member
George B Member Since: Jan 21, 2016
10 of 67

One more thought.

 

"...should still be paid prices that are market-related"

 

I agree with this, but the market has devalued the Ruble and that is no reason to give the Russians a big raise.  It is quite the opposite.

 

Thanks again,

 

George

TOP KUDOED MEMBERS