Mr Hamilton pointed to National Australia Bank as an example, which has opened new engineering centres of excellence in Vietnam and India.
“They’re not going there just to save money. It’s highly likely they can’t find qualified iOS and Android engineers at the level they need at the scale they need in Australia’s current market,” Mr Hamilton said.
Salary comparison
A senior software developer in Australia would earn $150,000 to $200,000 a year, compared to candidates with the same skills and experience based in South-East Asia or India, who would earn $20,000 to $50,0000, data from recruitment firm Talent shows.
Talent managing director Matthew Munson said employers could save as much as 80 per cent in salary costs by hiring a remote worker in South-East Asia, compared to a remote worker in Australia.
“It is not just large employers, now small- to medium-sized companies are also increasing offshoring as the cost of technology projects being completed locally is becoming prohibitive,” Mr Munson said.
Sharon Melamed, who runs Matchboard, a website that matches businesses with suppliers, said she had observed a 20 per cent increase year-over-year in the number of requests for offshore IT and digital roles.
“Companies simply can’t find the staff, most commonly developers, onshore and, even if they could, the wages are so high, it’s just not viable, particularly in today’s cost-conservative environment,” Ms Melamed said.
“COVID got people into the mindset that remote work is fine, so it’s not a big jump from a remote worker in Sydney to a remote worker in Manila with just two hours’ time difference.”
Less productive at home?
As well as higher salaries eroding company’s margins, Mr Hamilton said employers were also concerned about a drop in productivity of teams working remotely.
“Executives aren’t just waking up and deciding to have their teams back in the office two to three days a week to be difficult,” he said.
“The reality is work from home doesn’t work for everyone and productivity in some functions has dropped.”
Jonathan Barouch, chief executive and founder of software start-up Local Measure, said he hired two technical quality assurance engineers in the Philippines and a technical team of seven people in Cape Town, South Africa.
“Prior to COVID we had most of our technical talent in Australia, and for core R&D it is still advantageous to do so in Australia. However, with COVID and our technical teams going remote, it actually doesn’t matter nearly as much where we hire,” Mr Barouch said.
“It makes sense not only from a cost perspective but there are some markets where it is way easier to find talent, and as we serve global clients, the extra timezone coverage also reduces our support costs.”
