{"id":2809,"date":"2012-04-19T13:59:24","date_gmt":"2012-04-19T11:59:24","guid":{"rendered":"https:\/\/www.rudebaguette.com\/?p=2809"},"modified":"2019-05-03T16:44:44","modified_gmt":"2019-05-03T14:44:44","slug":"the-offer","status":"publish","type":"post","link":"https:\/\/www.rudebaguette.com\/en\/2012\/04\/the-offer\/","title":{"rendered":"Recruiting a developer in France [SERIES 4\/4] – Making the offer"},"content":{"rendered":"

\u00a0In previous articles, we\u2019ve talked about creating a job profile<\/a>, getting it seen by the right people, selecting CV\u2019s, and doing interviews<\/a>. Our final installment talks about making actual offers to candidates, and the responsibilities, cost, and risks as an employer.<\/em><\/p>\n

Step 1 – Know your real cost<\/h1>\n

The real cost of employing someone is more than just a salary. There\u2019s the office space and computer. There\u2019s the secondary benefits. But most importantly, you need to understand the tax burden of the country where you hire. France, obviously, is at a huge disadvantage here. France\u2019s payroll taxes are infamous for a good reason \u2013 they are sky high. More than that, there are many hidden gotchas that are additional drains. If you pay a French employee a salary of \u20ac40,000 a year, figure that your total cost is about double that, when all is said and done. So that\u2019s an employment tax pressure of around 100%. Romania is much more reasonable in that regard \u2013 we pay around 40%, depending on the tax breaks that go in and out of fashion.<\/p>\n

The Silicon Valley’s Dirty Little Secret<\/h2>\n

So now you know how much it costs. But there\u2019s more than that. You\u2019re also taking on risk. But first, let\u2019s compare two places that are both famous:
\nUs Europeans hover between envy and irritation when \u2018Silicon Valley\u2019 people blow into town and brag about their superior employment conditions. But wait, is that really true?Having spent eight years working there, I feel I have a basis for comparison. And the truth is, the mythical place called \u2018Silicon Valley\u2019 is really located in a very real place called California. And guess what? California LOVES regulation, red tape, and high payroll taxes. Tax pressure is around 60-70% – in addition to the federal and state government, the city government also takes a slice of your taxes, so each city has different taxes. Not bureaucratic enough for you yet? The labor regulations are also crazy, right up there with French rules about how high the ceiling above the employee must be, and other nonsense.
\nSo next time Twitter is bragging about having negotiated with the city of San Francisco about their taxes, you need to remember it\u2019s merely to bring it down from the insane to high-but-bearable.\u00a0So \u2018Silicon Valley\u2019 (not a real place!) is right up there in terms of taxation and regulation with, say, Germany. Sorry to burst that bubble (no pun intended).
\nThe only thing where they are truly at an advantage is when it comes to firing. This is the stuff of myths, so let me explain both the French and the California side quickly.<\/p>\n

California<\/h2>\n

In California, \u2018At Will\u2019 employment is the norm, as in most of the United States. This means that both parties (employer and employee) can terminate the relationship at any moment. But wait? Doesn\u2019t that mean that all Americans get fired every time they take a cigarette break? No! First of all, to make sure that firing isn\u2019t because of discrimination, the laws around that are much more tightly enforced. So in practice, what does this mean? American employees are cautious about their behavior in the workplace, because they know that if they slack off, they will get fired eventually. But in reality, firing people is still a pain in the ass to do, so managers avoid it when they can. In my 8 year career in the US, I\u2019ve seen maybe 10 people fired. And they all deserved it. So nothing crazy \u2013 no Donald Trump situations. And do people work harder because of this? Yeah, but not that much.<\/p>\n

The French situation<\/h2>\n

Without exaggerating, in France, employment is very stable, in the sense that you need to really misbehave to get fired. To fire a French employee, you have to either document their misbehavior (warnings with registered letters, all that fun), or the economy must be in recession. Even then, there\u2019s a formula that for every year of employment, they get 5-10% of their year salary as a parting gift (and yes, there\u2019s an\u00a0 iPhone app to calculate this<\/a>). This adds up quickly. So more than anything, firing in France is EXPENSIVE and people avoid doing it whenever they can. Because of the parting gift, it also encourages you to leave senior people and fire junior ones. This is bad in several ways. It means that senior employees know that they are untouchable, and so get less and less productive with each passing year. Whenever there is a recession, managers all over France sigh with relief and fire their senior staff at discount rates.<\/p>\n

So what do we take away from this?<\/h2>\n

In France, hiring is something that you must do with extreme care. This cheerful motivated person may turn out to be the worst slacker in the world the moment the dreaded trial period – the first few months in which both parties can terminate with little notice, as negotiated in the contract – in the labor contract is over. You must do anything and everything to weed out the slackers-to-be before you make an offer. Also, you won\u2019t always succeed. And you\u2019ll have to pay the firing bonus to a person who least deserves it. Welcome to France.
\nThe upside to this is that people tend to stay long at one company, often without turning lazy. So you can build a team that knows each other super well. That\u2019s pretty awesome for productivity. Another thing is, your team size must be very stable. In the US, you can build up a team temporarily (say for 3-6 months) and then reduce the size. You can\u2019t do that in France, you have to work with freelancers for the temporary capacity portion.<\/p>\n

A straight-up comparison<\/h2>\n

So your conclusion should not be that you need to take a one-way flight to California right now. Let\u2019s compare cost. A French developer will run you about \u20ac50,000 a year, go ahead and multiply that by two as your real cost (\u20ac100,000). What about a San Francisco developer? This mythical creature will run you about $100,000 a year at minimum, these days. If you add up the tax pressure on top of that salary, you end up around $140 \u2013 160,000 a year. The only penalty you pay in France is difficult to fire, which in practice, with developers, is rarely an issue since they job-hop every 2-3 years on average. Office costs for San Francisco and Paris are roughly the same, and both places are cheaper if you move 10-20 kilometers away from the city center into the suburbs.<\/p>\n

Step 2 \u2013 Composing your offer<\/h2>\n

So now you know what you\u2019re getting into, cost wise. You\u2019ve probably already committed to your secondary stuff (the lunch tickets, free fruit, etc). In France, you now have to worry about the type of contract you will offer \u2013 CDI or CDD. It\u2019s not really my expertise but I\u2019ll say at least that CDD can actually be more dangerous than CDI, as it\u2019s even harder to fire someone halfway into their CDD. CDI with the maximum trial periods is probably your best bet. Don\u2019t skimp on having a good lawyer\/accountant\/labor contract expert look at your paperwork. Your life may depend on it.
\nIn the US, this part is easier. A one-page letter spelling out the conditions suffices.
\nIn Romania, we have our lawyer do what looks like a cookie-cutter contract. I know it doesn\u2019t take him a lot of time to crank out.
\nNow, what salary are you offering? There are several schools of thought. The first is, the cheaper, the better. Since you\u2019re paying, less is more, right? Sure. Developers are fairly vulnerable in this department, as they can be very clueless or indifferent about their market value. So sure, low ball the developer. The upside is monthly savings in the bank. The downside is that when they find out later, they will resent it and probably leave in a huff.
\nIn Romania, we made the choice to pay 10% above market. At the time, Romania was cheap anyway, so the idea was to ONLY have senior developers, since they are cheap. And to pay them above market so that they stay loyal. This worked \u2013 we put together a great team, but Romania got too expensive. So we still do above market, but we don\u2019t have only seniors anymore.
\nIn France, the situation is more nuanced. People don\u2019t just look at salary (with some exceptions, of course!).
\nSo when you make an offer, make sure it includes the following elements:<\/p>\n