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CodeLance newsletter January 2004

1. Outsourcing and labour costs - your reaction
2. Primary vs secondary projects, a reminder
3. Other freelance sites, what's so great about them?

But first, before we get started on any of the above I'd just like to say a very happy New Year to all CodeLance members. I hope 2004 brings you happiness, prosperity and outstanding good health. Cheers!

Rod Morris (Owner, CodeLance)

1. Outsourcing and labour costs - your reaction

In the last issue of the CodeLance newsletter I brought up the subject of the differences in labour costs between certain parts of the world and the impact this has had on service provider bidding, specifically the ability of developers in some locations to bid signicantly lower than those from many Western nations. I asked for your reaction to this situation and received a large number of replies. I'd like to share some of them here:

"As much as I regret the fact that India and other countries are snooping away work that's pleasant and highly profitable from people like me, I also think that it makes perfect sense and I certainly do not think it is unfair...I like money as much as the next person, but the amounts that have been made in IT became absolutely outrageous over the last fifteen years. And that certainly isn't because we are better at it than anybody else. I have heard extremely good reports on outsourcing to India. Not only is it cheaper, but they work in a highly structured manner and know what they are doing. That said, I still think the majority of IT work for the Western European market will stay where it is - in Europe. Because outsourcing your work to the other side of the world means specifying the requirements and the functionality to a level that we're no longer accustomed to. It is basically a return to the waterfall method, and that will be too big a step to take for most customers."

"Lower wages does not mean lower standard, but due to communication problems the task of specifying the work to be done goes up."

"Outsourcing is killing the freelance community in North America. My monthly expenses come to around $800 a month, and I just can't cover that by taking on $50 jobs that I won by under-bidding a programmer from a former Soviet state, Pakistan, or India. While it's great that people in "developing" nations are finding better ways to provide for themselves, they're also displacing the revenue that people like myself desperately need. I try to be as understanding and supportive as possible, but when it affects my bottom line, it really hurts."

In summary, the vast majority of replies seemed to be making two main points:

a. Lower labour costs in certain countries are making it very difficult for developers elsewhere to bid at a similar level.

b. Despite the impact on those who have been affected negatively by this situation (i.e. developers from high labour cost locations) most people, including those just mentioned, thought that the benefits to lower labour cost countries were welcome.

This echoes conversations I've had elsewhere recently, both with developers I know and others I've conversed with on the newsgroups. What the long term effect will be for programmers worldwide remains to be seen but I hope that professional developers will be able to continue to make a living from their craft for a long time to come, wherever they live.

2. Primary vs secondary projects, a reminder

The most common problems we see at CodeLance are usually caused by members who have not read or understood the differences between primary and secondary projects, especially with regard to the disclosure of contact information.

Here's a quick summary to help:

Primary projects

A primary project is a high profile project which brings a range of benefits for both buyers and developers. Primary projects involve a one-off charge to the buyer of $20 after which the project is listed prominently on the CodeLance homepage (and all other top level pages at www.codelance.com) thus guaranteeing maximum exposure to potential programmers. Developers and buyers are free not only to discuss project details but also to exchange contact information via the "Send Message" user to user email facility or via a private message posted to the project's message board BEFORE a winning bid is chosen. As a result, developers can provide buyers with URLs of previous work or even send them demo code directly. Furthermore, both buyers and developers pay NO COMMISSION whatsoever on primary projects.

Secondary projects

A secondary project may be placed FREE OF CHARGE by a buyer and is visible to all developers who carry out a search for open projects (it is also visible on the CodeLance homepage as long as it remains one of the 10 most recent projects). Before a buyer selects a developer for a project both parties are able to communicate via the CodeLance messaging systems but disclosure of contact information is NOT ALLOWED. Once the developer has been selected and the work has been successfully carried out the buyer is required to transfer the appropriate funds from their CodeLance account to the developer's CodeLance account. The buyer is charged NO COMMISSION, the developer is charged the current commission rate.

IMPORTANT: Contact information includes, but is not limited to, the following:

Company names
Website names and URLs
Email addresses
Phone numbers
Fax numbers
"Messenger" addresses (MSN, Yahoo, ICQ, etc.)
Physical addresses (although country name is acceptable)

3. Other freelance sites, what's so great about them?

During a recent newsgroup discussion one of the contributors posted a list of all the things that he disliked about certain other freelance sites he'd used in the past. Fortunately none of them were really applicable to CodeLance so I felt that I was off the hook (for the time being)! It got me thinking, though, about what other sites might be doing better than CodeLance.

I guess on a practical level we're just not as busy right now as some more popular sites (although growth continues to be steadily upwards) and I have to confess that in the past I've been a little slow, on occasion, in replying to emails. Both of these issues I'm aware of and will be working to improve this year. I'd be interested to hear what else could be improved so if you use a service elsewhere and they're doing something better than us please let me know. I can't promise to do everything but I will carefully consider each suggestion.

Well, that's it for another newsletter. Just a quick reminder that our sister site ImageLance (http://www.ImageLance.com) is up and running so if you're interested in freelance design or advertising services why not check it out?

See you next month!

Kind regards,

Rod Morris
--
Owner, CodeLance