I agree on "it is a good time for hiring people with high qualification at a discount". Here is a cultural caveat:
A very closed friend of mine started his company (internet startup) in Spain just over 12 months ago. He wanted to hire Spanish developers, with c. 5 years experience. And he did. Even if this was a startup, the working conditions were pretty good for Spain: €32,000 (well above many corporate jobs), private health insurance, equity, job responsibility and decision making. My friend was paying salaries out from his own savings, no seed money raised, and he was paying himself zero.
Since founding the company, he has fired two developers because of a "legacy" cultural clash. What my friend (late 20's guy) found out was that many developers (and probably this extends to many other industries) were looking for a 9-to-5 job, no frills jobs. They did not show any motivation/passion at all. They took no ownership of projects, did not step-in when issues came up and showed no motivation for "getting things done". He was frustrated because the company was a startup, not a large corporate, and his bank account wasn't cash rich, but Spanish developers showed no respect and did not go that extra mile to ship product in a responsible timeframe.
These two developers, in their mid-30's, are probably not representative of the entire dev community in Spain, but my friend burnt out, and hired developers in Poland. The Spaniards were let go, in time to pay them no equity.
From what he has told me, a part from some minor communication issues, Polish developers showed the right work attitude and passion, with a mentality very much like the Valley. Since the initial work crunch, from working 80 hour weeks, he is now doing a 9-6, and the company is cash flow positive. Just shows that hard work does pay off, and how a 9-5 mentality (specially when starting a company form scratch) is cancer to the company.
If your friend needed people ready to work 80hr weeks in Startup Crunch mode, in exchange for 32k + eventual equity, and hired people who wanted 9-to-5, he is a horrible recruiter or a terrible leader. Don't get me wrong: lots of people here are angry at the situation and will act pissy and self-entitled. But good engineers are still not cheap, and motivating them takes a lot more than "at least you have a job".
Anyway, happy it worked out for your friend. Yay for outsourcing!
just to clarify: FT hire in another country != outsourcing
It's more like: devs tell him, "yes, super excited to work in a startup, salary is terrific, challenge accepted."
truth: "oh, it's 5pm, lets go home. we haven't had the time to push production code to fix that bug, but we can do it tomorrow."
it is easy to say that someone is a bad leader/bad recruiter, but the fact of the matter is that it is a common cultural issue (as per other comments in this thread). Hence, why did it work in Poland and not Spain? Many good engineers at large corporates in Spain don't make that money, and yet for less one can get an equal service in Poland.
Clearly "at least you have a job" was not an approach to motivate hires, they were let go.
If he hired people who became 9-5ers, either he failed to correctly identify their expectations and attitude and their true self revealed once they were in, or he failed to keep them motivated and they scaled back to more relaxed work schedules. It's quite possible they were the best he could find: even in the current climate, I don't know any highly skilled developers willing to give up their personal life for E32k unless they really really believe in and share your project.
Poland has almost 1/3 the GDP of Spain; of course his money was more effective there. Did he bring them to Spain? Last time I interviewed a Polish developer, salary expectations including relocation to Spain were roughly 2/3 from a pool of candidates decidedly more expert than their Spanish counterparts.
That's one of the big challenges Spain faces in the next few years: reducing the cost of living without destroying the standards of life, so it can become competitive again while keeping a reasonable amount of experts and highly skilled workers (who are now fleeing the country in droves).
He didn't bring de Polish devs over, they work from Poland. on the "2/3" comments, i think you are pretty much spot on.
Don't get me wrong on the hiring issue, I think they are both parts at fault. The irony in this whole situation is that you hear from Spaniards (primarily those called "indignados") complaining about €1k/month salaries, shitty jobs, etc. and my friends stumbles into a situation where his employees have above avg working conditions (€2,700/month, with private health insurance and equity"!") and there is no reciprocity in specific working situations (he was definitely not asking 80hr/week in perpetuity, he was just asking to ship on time to meet deadlines, if that means working leaner, or working more hours that is up to each individual, just get it done).
For 11 hours of high quality, skilled technical work every day, 7 days a week, and the minimal job security of an unproven business? €32k is not going to buy you that person. You have to find someone who believes in you and your project, shares your passion (and equity), and can afford to have basically no family & social life until things work out.
I know a lot of people who really believe in a project and it's leader who ONLY work for equity without any money, benefits, health care and such.
I know where you are coming from but unlike people here on HN seem to think; the whole world is not Silicon Valley (and I know at least one person in Silicon Valley crunching 11+ hours/day for equity in a startup actually); the amounts paid to programmers there are not really examples for the rest of the world. If you want that just move there and pray the stories are true; there is no bubble.
One of my best friends in the Netherlands has been working for around E40k gross as a top dev for 15 years; he doesn't care about money, doesn't ask for raises. The company still looks like a startup, but is making enough to pay salaries every month for 15 years. He doesn't mind crunching outside work time and often does.
Besides the question if it is 'smart' or not to do so, I don't know a lot of people who worry about these kind of things much. They just work and have fun doing it and the moment they don't like it anymore, they switch.
Exactly what we found. And time after time again; I live parts of the year in Spain and I love it, but the mentality is really off. Unless they fix that, I'm not positive about the future of people here. It's good to see that that's not only me; someone else in this thread (read my other comments if you care to) said mid 30s might be ok, but they don't seem to be either in mine (and your friends' experience).
A very closed friend of mine started his company (internet startup) in Spain just over 12 months ago. He wanted to hire Spanish developers, with c. 5 years experience. And he did. Even if this was a startup, the working conditions were pretty good for Spain: €32,000 (well above many corporate jobs), private health insurance, equity, job responsibility and decision making. My friend was paying salaries out from his own savings, no seed money raised, and he was paying himself zero.
Since founding the company, he has fired two developers because of a "legacy" cultural clash. What my friend (late 20's guy) found out was that many developers (and probably this extends to many other industries) were looking for a 9-to-5 job, no frills jobs. They did not show any motivation/passion at all. They took no ownership of projects, did not step-in when issues came up and showed no motivation for "getting things done". He was frustrated because the company was a startup, not a large corporate, and his bank account wasn't cash rich, but Spanish developers showed no respect and did not go that extra mile to ship product in a responsible timeframe.
These two developers, in their mid-30's, are probably not representative of the entire dev community in Spain, but my friend burnt out, and hired developers in Poland. The Spaniards were let go, in time to pay them no equity.
From what he has told me, a part from some minor communication issues, Polish developers showed the right work attitude and passion, with a mentality very much like the Valley. Since the initial work crunch, from working 80 hour weeks, he is now doing a 9-6, and the company is cash flow positive. Just shows that hard work does pay off, and how a 9-5 mentality (specially when starting a company form scratch) is cancer to the company.