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I've been on sales calls and in PoCs with a couple major Mexican conglomerates (think Cemex, Pemex, or Azteca level or the MX operations for BBVA or Santander) so I've had the chance to interact with a number of Mexican software engineers, plus I have a couple Mexican diaspora SWE friends and honestly the talent is there, but it won't really be the next "Poland" or "India" like how the article portraies it.

The issue I've seen is you're going to be paying Austin in the 2010s level salaries ($60-70k base plus stock) for competitive talent due to remote work or Central Europe salaries at the lower end ($30-40k base), plus the added salary pressure of MX nationals being able to move to the Bay Area, Austin, NYC, or Seattle via the TN visa (most undocumented immigration coming from MX are not MX nationals - they're primarily Honduran, El Salvadoran, Nicaraguan, or Guatemalan nationals).

With that level of salaries, you aren't getting a significant discount compared to other locations nor the ability to run 24 hour operations. American companies are fine paying MX level salaries if not higher when you factor in equity in India, Romania, and Poland or pay US level salaries in Israel because it gives them the ability to have continuous 24/7 operations and a level of redundancy from a risk planning standpoint.

None of this is to say MX ain't a bad spot to develop talent - anything but given the free trade agreements with the US, South America, and the EU and the very American-esque regulatory system making it a great hub for American companies to expand within the Hispanoblante world - but the scene is similar to Germany or France's in the sense that the dev industry seems heavily Finance, Manufacturing, Defense, or Conglomerate driven and treats it as a cost center.

3 comments

What's the benefit of 24-hour operations in software engineering?

I once worked for a US-based software company that opened an engineering office in Western Europe, planning to have engineers hand off features from one office to the next and keep development going around the clock. Of course this didn't happen because of the overhead of the daily handoff and the aggravation of your code never being in the same state in the morning that it was in the night before.

What actually happened was that both offices worked independently on different features, which was a perfectly productive arrangement, but there was no particular benefit to the fact that they were doing it "around the clock".

I always suspected this plan was just an excuse to seek cheaper talent outside the U.S. without offending the American developers, but now that I've seen someone else mention it, I wonder if there's a real benefit that I'm missing.

24 hour operations matter in large budget (>$20k/year) deals. There are SLAs to hit, massive penalties if they are not hit, and customers are VERY trigger happy with filing Severity 1 escalations and texting your company's C-Suite, Board, and Sales Leadership to get a bug resolved ASAP.

In additon, some level of regional redundancy is critical to prepare for black swan events (eg. a regional power outage like in the NE in 1996, flooding in Sacramento or East Bay suburbs leading to Product Owners or feature owners dealing with evacuations - this happened to us with the current flooding).

And finally, 24 hour operations allows you to expand to markets outside the US. While engineers in San Jose are sleeping, it's the middle of the workday for customers in London, Paris, Istanbul for example and they will inevitabely have bugs and issues arise.

Also, like I mentioned in the comment below:

2. Training and mentoring is a reflection of your company's Engineering Management. My employer has had an easy time offshoring development to Slovakia and Bangalore because we had Tech Leads and Engineering Management make the initiative to mentor, train, and onboard offshore team employees as we would domestic employees. I've seen similar examples occur across the industry (eg. Google Pay's dev team in Hyderabad, DE Shaw's dev team in Gurgaon, Motive/KeepTruckin dev teams in Lahore & Islamabad). If Management views Engineering as a cost center (which, it pains for me to say as an ex-cybersecurity engineer, at times it can be), that's where you tend to see the relationship between offshore and onshore teams collapse, because the relationship is based on the implicit arbitrage of labor.

Fair points. Continuous operations create significant drag in day-to-day feature development work, but I can see the value for truly urgent things like Sev-1s, or having engineers that can jump on customer calls in different timezones.

Definitely agree on the training point. That was one of the things we did right. I and several of the other senior engineers rotated through the foreign office for the better part of a year to get the new teams spun up on our codebase. Both offices maintained a good relationship afterwards.

Thanks for the clarification.

For sure. As an early stage startups (pre-Series D) that target lower market or mid-market (B2C startups like Chime or B2B SaaS startups like many of the ones you see in YC), continuous operations aren't significantly important at their stage, but as their revenue grows, it becomes more and more critical.

1. I don't think there would be an intention to move folks from MX to the bay area, Austin, etc. so not sure why you mentioned that.

2. I think having folks "near shore" makes it far easier to train, mentor, manage, etc. when there is a lot of overlap in time zones. When I had a team in India that was THE major challenge. The speed of iteration was abysmal.

3. I may be wrong but I have some nephews by marriage getting STEM degrees in Tijuana (TJ) and salaries for a new mechanical engineer hire are terrible IIUC. Per https://www.salary.com/research/mx-salary/benchmark/mechanic... average annual salary is 324,000 MX Pesos which is < $17000 USD. Software is similar: https://www.salary.com/research/mx-salary/benchmark/mechanic... . And TJ has a higher cost of living than other cities in MX and thus salaries due to proximity to the US. It will take years for supply to meet demand but I can see Mexico and South America being good sources of talent in the future. To me it's just a marketing, education and pipeline problem.

> 1. I don't think there would be an intention to move folks from MX to the bay area, Austin, etc. so not sure why you mentioned that.

It's actually quite easy to do it. For real engineers at least.

1. It isn't companies moving employees - it's Mexican nationals applying to jobs in the US and then moving. So long as you have working English fluency and a relevant degree, it's pretty trivial to get a TN, H1-B, or EB-1 as a Mexican national.

3. Tijuana is not a software hub. It is a medical device manufacturing hub though (all the design and R&D is done across the border in San Diego and manufacturing is done in Baja California). Also the MechE salary in MX is apparently higher than it is in Poland (~$13k/yr - https://www.salary.com/research/pl-salary/benchmark/mechanic...), Romania (~$4k/yr - https://www.payscale.com/research/RO/Job=Mechanical_Engineer...), or China (~$15k - https://www.salary.com/research/cn-salary/benchmark/mechanic...).

In fact, I think the Poland salary is overestimated as I know for a fact starting salaries for new grad SWEs in Poland (not working at MNCs) is around $7-8k/yr. Most of the software roles in MX are in CDMX, Monterrey, or Guadalajara. So in fact devs in MX might be earning more than in Eastern Europe.

I know for a fact McKinsey pays Associates 33% more in Mexico ($127k) than they do in Poland ($96k) for the exact same role, and generally McKinsey salaries take regional job markets into account when setting salaries, so I guess it shouldn't surprise me that Dev salaries might be higher in MX than PL or RO (and they 100% are higher than in UA or RU)

> MX nationals being able to move to the Bay Area, Austin, NYC, or Seattle via the TN visa

TN visa requires candidates have the "correct" university education (self-taught and music majors need not apply). Aside from that, you're absolutely correct.

I'm sure that the government is keeping track of how many people are getting TN visas per year, but otherwise these people just blend in and become part of the normal workforce. Eventually many of them get a green card or US citizenship.

They def can, though one of my diaspora buddies is seriously considering returning to CDMX even though he's making good money in SV, graduated from a top CS program in the US, and already got his GC.

To him the QoL in CDMX was better than other cities in the US (but homesickness is also playing a part)