You Should Be Looking for your Next Developer in India

by Gonzalo February 05, 2018

Great english level, a solid technical foundation and relevant work experience. Can you find that in India?

Photo by Varshesh Joshi on Unsplash

“Buy low, sell high.”

You probably heard this investment cliché adage a million times. It’s plastered across every financial blog on the Internet, and as with anything that’s overused, it slowly lost its value.

But as hackneyed as it is, the underlying principle is still relevant and will be forever valuable –The key to performing on any marketplace — stock, real estate, even cryptocurrency — is to find undervalued assets.

In financial markets, the term ‘undervalued’ refers to a type of investment that is selling for a price presumed to be below the investment’s true intrinsic value. If you can find something that’s undervalued, purchase it, wait until it inevitably rises to it’s true value, and sell it to get a winner.

The same dynamic is present in other markets, including developers. In fact, as in any tough sellers’ markets, looking for undervalued opportunities is even more crucial.

We know finding a good developer is an uphill battle, and this will only get worse every year. There’s increasing competition, sometimes your local market isn’t enough, or you just can’t get that American developer to relocate to Barcelona.

The solution is to look somewhere other companies aren’t looking, so you can find your own gold nugget.

How misconceptions turned India into an undervalued market

During the outsourcing boom of the past decade, telecommunication and other multinational corporations started offshoring their customer service centers to India as a “cost-saving measure.”

In theory, this works. But there’s a long way between a great plan and great execution. By giving their distant call center operators little training and even less authority to help customers, corporations ended up providing infuriating service to Western customers.

This generated an undesired side effect — by associating a horrendous business experience with India, they perpetuated the impression of the country’s labor pool as presumably cheap but apparently unskilled, apathetic and with a below-average command of English.

Yet to use this rather limited experience with “Indian outsourcing” to make inferences about the broader labor market is absurd. India is, after all, a country of one billion people.

But don’t worry.,e’ll use this to our advantage. As Warren Buffet says — “The best thing that happens to us is when a great company gets into temporary trouble…We want to buy them when they’re on the operating table.”

These misconceptions are what wrongly set India as an undervalued market, and put the country on the metaphorical operating table.

Now it’s time to objectively look at the data and understand why India is a great place to find your next developer. Often, things are in the last place you expect them to be.

Let’s dive in.

A great English level

Contrary to popular belief, India’s English level is way above average. Recent Education First data study shows that India sits #27 in the world for english proficiency, surpassing countries like Spain, France or Hong Kong. What’s more impressive, it takes fourth place overall in Asia.

Public English language instruction began in India in the 1830s during the rule of the East India Company. In 1857, just before the end of company rule, universities modelled after the University of London and using English as the medium of instruction were established in Bombay, Calcutta and Madras.

Nowadays, English is the official language in some states and the lingua franca used to communicate between tribes or regions who don’t share a common language.

So if you are worried about hiring someone from India because communication will be difficult, you can rest easy. They probably speak better English than you do.

Enviable work experience

Even though you might not be aware of it, there’s a phenomenal tech scene in India. The trend is so strong, Techcrunch and Quartz have been predicting a bubble burst for over a year now. Yet, nothing has happened.

Internet access is growing like crazy and dozens of local companies have ridden the wave. A great case is Flipkart, founded in 2007 and headquartered in Bengaluru, with a $15 billion valuation but you can find dozens of examples across the nation.

On top of that, tech giants have stationed themselves in India, using it as a hub for the region. Google, Adobe, NetApp, Intuit, PayPal have offices there.

With a booming tech scene and multiple high profile employers, comes great talent. This ensures that most developers have work experience and are used to a Western style of working, culture and management.

Top university education

India has some of the best technical universities in the world. So much so, that getting accepted is an ordeal only the top students can overcome.

Delhi University has issued cutoff scores at some of its colleges at a near-impossible 100 percent. The Indian Institute of Technology has an acceptance rate of less than 2 percent — and that is only from students who qualify to take the entrance exam after years of specialized coaching.

To provide some context, Harvard’s acceptance rate for the class of 2021 was 5.1%. Yes, Indian students look at Harvard’s acceptance rate and rejoice. There are even cases of people getting into Ivy League schools in the US (or Oxford), but not Delhi University.

The reason for such a phenomenon is the top technical level at those schools. In 2015, Outlook India ranked seven IITs in its top 10, including the top six positions. In 2016, IIT Indore was ranked 8th in the world followed by IIT Kanpur under a ranking released by Hackerrank for the world’s best coders.

A strong computer science foundation is something a lot of western developers often lack, and here’s where India can take the lead. Even though a degree is not a must-have, it’s always a strength, especially if you are hiring technical positions that require deep expertise like machine learning, AI or data science.

Willingness to relocate

According to the United Nations latest survey on international migrant trends, India’s population living abroad is the largest in the world with 16 million people living outside the country in 2015. To put it in perspective, one in twenty world migrants are born in India.

Perhaps it’s because of their low salaries. Payscale’s median salary for software developers in India is Rs 378,570 or almost $6,000 per annum.

On top of that, quality of life in top Indian cities isn’t optimal. According to Mercer’s Quality of Life Index, the first indian city to appear in the ranking is Hyderabad in place 144, followed by Pune in 145 and Bangalore in 146.

This unique combination of factors produce an undeniable effect: indians are more willing to relocate than other nationalities. This makes your company’s job a lot easier.

If remote, geoarbitrage is your friend

Geoarbitrage, a term popularized by Tim Ferriss, means leveraging disparities between international labor markets to generate a bigger return on our capital investment.

In plain english, the magic of geoarbitrage is that if you work with someone in a country with a lower cost of living, you can pay them double the local market rate, and it’d still be more cost-effective than hiring in your own market.

Win-win.

So yes. Cash. As we’ve seen before, a European company can pay someone twice the high-end market salary for a software developer in India — our about 22,000 EUR — and it’d be a bargain compared to the 42,000 EUR for a similar developer in Paris.

But there’s a second, overlooked benefit that might as well trump the first one. When you’re a software company with an expensive office in a large European city, with a team composed entirely of European full-time developers, you simply can’t afford to spend much time expanding your team’s skill set.

When labor is more affordable, you have a wider margin to make choices that favor increasing the skill and expertise of your team — things like establishing formal learning hours, sending them to conferences and more.

Wrapping up

If I had to blindly mix and match the perfect candidate for relocation, she would have a great english level, a solid technical foundation, deep work experience and willingness to relocate.

India has the perfect combination of factors, and this will only keep growing over the next 15 years. Even though we used it as an example for this article, at Jobbatical we don’t advocate for any one country.

We believe that anyone who cares about crafting good software should keep the vast pool of talent available in India (and around the world) in mind when assembling a team of developers.


This post is a part of Jobbatical’s hiring blog, designed to help hiring managers get their teams to the next level. To get our new articles straight to your inbox, please sign up for our hiring newsletter.

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