[OFFTOPIC] Medical practitioners and building trade people vs. software developers (was: Re: Goodbye, Lingnu)

[Oleg Goldshmidt]

On Tue, Nov 15, 2011 at 3:20 PM, Omer Zak <w1 at zak.co.il> wrote:

> I am curious to know how do people in the building trades and in the
> medical area manage to attract high payment in exchange for excellence.

Why do you think they do? The vast majority of medical services are
provided by unionized personnel, as we all should be painfully aware
of. Their salaries may be low or high, but quality is not a factor
that determines them. Construction workers and architects (I happen to
know a bit about the latter profession for personal reasons) are
woefully underpaid and underappreciated in Israel, and quality does
not matter there either.

I suspect the only case that supports your statement is private
medical (or legal) practice - let me defer it for just a few lines...

> How do they differ from software developers, who are often forced to
> race to the bottom?

How often do you hear the statement "we _cannot afford to do it right_
- it is too expensive" ("expensive" means in terms of time or money or
both)? I hear it every day[1]. With this attitude, one's hope of
"attracting high payment in exchange for excellence" is lost.

The difference between staying alive or dying (or becoming an invalid)
may make you be prepared to pay a lot of money if a private physician
convinces you that with his services you have a better chance. Ditto
for staying out of jail with the help of a good lawyer. Living in a
house that will not crumble, or leak smelly dirty stuff from pipes, or
whatever is less drastic but still makes a difference (maybe not a lot
of difference if you buy an apartment you intend to let). In every
case, we are dealing with perceptions rather than facts at the time of
rate negotiation. Software or engineering services must only be "good
enough" even at perception level, and that bar is pretty low.

In addition, (really) shoddy work in either construction or medicine
has at least the potential of being punished, criminally or in
monetary terms. A software vendor typically assumes virtually no
responsibility for substandard products, and this further reduces the
incentive to pay for quality.

I basically agree with Shachar's calculations. One can invert his
argument (same thing, different angle): while his break-even point is
at par with a full time salary at the same hourly rate, his rate
actually should _include_ compensation for those periods of
"downtime", looking for new contracts, etc. This means that the hourly
rate for the actual work done for a particular customer _should_ be
quite a bit higher than his monthly salary divided by the number of
hours. The incentive to the customer should be that once Shachar does
his work he will not need to be kept on payroll, provided with office
space, equipment, benefits, all sorts of services, etc. However, the
associated savings are too difficult for a typical beancounter (or
board member who needs to approve it) to assess - costs are easy to
quantify, while savings are not. The proposition of having such a
qualified engineer as Shachar permanently on the payroll, available to
do whatever management directs him to do, etc., etc., somehow looks
cheap in comparison. In addition, one wants a consultant for stuff
that is outside one's core competency, so it looks like outsourcing,
which _must_ be cheaper than paying permanent staff, right? The
perceptions may or may not be wrong, but it does not matter if they
are.

[1] My attempts to say, "No, we cannot afford to do it _wrong_!"
usually fail to embed the message into the consciousness of my
interlocutors. Repeat after me: costs are easy to quantify, savings
are not.

Shachar, sorry about your venture, and best of luck at LiveU.

-- 
Oleg Goldshmidt | oleg at goldshmidt.org