I agree on "it is a good time for hiring people with high qualification at a discount". Here is a cultural caveat:

A very closed friend of mine started his company (internet startup) in Spain just over 12 months ago. He wanted to hire Spanish developers, with c. 5 years experience. And he did. Even if this was a startup, the working conditions were pretty good for Spain: €32,000 (well above many corporate jobs), private health insurance, equity, job responsibility and decision making. My friend was paying salaries out from his own savings, no seed money raised, and he was paying himself zero.

Since founding the company, he has fired two developers because of a "legacy" cultural clash. What my friend (late 20's guy) found out was that many developers (and probably this extends to many other industries) were looking for a 9-to-5 job, no frills jobs. They did not show any motivation/passion at all. They took no ownership of projects, did not step-in when issues came up and showed no motivation for "getting things done". He was frustrated because the company was a startup, not a large corporate, and his bank account wasn't cash rich, but Spanish developers showed no respect and did not go that extra mile to ship product in a responsible timeframe.

These two developers, in their mid-30's, are probably not representative of the entire dev community in Spain, but my friend burnt out, and hired developers in Poland. The Spaniards were let go, in time to pay them no equity.

From what he has told me, a part from some minor communication issues, Polish developers showed the right work attitude and passion, with a mentality very much like the Valley. Since the initial work crunch, from working 80 hour weeks, he is now doing a 9-6, and the company is cash flow positive. Just shows that hard work does pay off, and how a 9-5 mentality (specially when starting a company form scratch) is cancer to the company.

If your friend needed people ready to work 80hr weeks in Startup Crunch mode, in exchange for 32k + eventual equity, and hired people who wanted 9-to-5, he is a horrible recruiter or a terrible leader. Don't get me wrong: lots of people here are angry at the situation and will act pissy and self-entitled. But good engineers are still not cheap, and motivating them takes a lot more than "at least you have a job".

Anyway, happy it worked out for your friend. Yay for outsourcing!

just to clarify: FT hire in another country != outsourcing

It's more like: devs tell him, "yes, super excited to work in a startup, salary is terrific, challenge accepted."

truth: "oh, it's 5pm, lets go home. we haven't had the time to push production code to fix that bug, but we can do it tomorrow."

it is easy to say that someone is a bad leader/bad recruiter, but the fact of the matter is that it is a common cultural issue (as per other comments in this thread). Hence, why did it work in Poland and not Spain? Many good engineers at large corporates in Spain don't make that money, and yet for less one can get an equal service in Poland.

Clearly "at least you have a job" was not an approach to motivate hires, they were let go.

If he hired people who became 9-5ers, either he failed to correctly identify their expectations and attitude and their true self revealed once they were in, or he failed to keep them motivated and they scaled back to more relaxed work schedules. It's quite possible they were the best he could find: even in the current climate, I don't know any highly skilled developers willing to give up their personal life for E32k unless they really really believe in and share your project.

Poland has almost 1/3 the GDP of Spain; of course his money was more effective there. Did he bring them to Spain? Last time I interviewed a Polish developer, salary expectations including relocation to Spain were roughly 2/3 from a pool of candidates decidedly more expert than their Spanish counterparts.

That's one of the big challenges Spain faces in the next few years: reducing the cost of living without destroying the standards of life, so it can become competitive again while keeping a reasonable amount of experts and highly skilled workers (who are now fleeing the country in droves).

He didn't bring de Polish devs over, they work from Poland. on the "2/3" comments, i think you are pretty much spot on.

Don't get me wrong on the hiring issue, I think they are both parts at fault. The irony in this whole situation is that you hear from Spaniards (primarily those called "indignados") complaining about €1k/month salaries, shitty jobs, etc. and my friends stumbles into a situation where his employees have above avg working conditions (€2,700/month, with private health insurance and equity"!") and there is no reciprocity in specific working situations (he was definitely not asking 80hr/week in perpetuity, he was just asking to ship on time to meet deadlines, if that means working leaner, or working more hours that is up to each individual, just get it done).

E32k is not bad for Spain in general tbh.

For 11 hours of high quality, skilled technical work every day, 7 days a week, and the minimal job security of an unproven business? €32k is not going to buy you that person. You have to find someone who believes in you and your project, shares your passion (and equity), and can afford to have basically no family & social life until things work out.

I know a lot of people who really believe in a project and it's leader who ONLY work for equity without any money, benefits, health care and such.

I know where you are coming from but unlike people here on HN seem to think; the whole world is not Silicon Valley (and I know at least one person in Silicon Valley crunching 11+ hours/day for equity in a startup actually); the amounts paid to programmers there are not really examples for the rest of the world. If you want that just move there and pray the stories are true; there is no bubble.

One of my best friends in the Netherlands has been working for around E40k gross as a top dev for 15 years; he doesn't care about money, doesn't ask for raises. The company still looks like a startup, but is making enough to pay salaries every month for 15 years. He doesn't mind crunching outside work time and often does.

Besides the question if it is 'smart' or not to do so, I don't know a lot of people who worry about these kind of things much. They just work and have fun doing it and the moment they don't like it anymore, they switch.

Exactly what we found. And time after time again; I live parts of the year in Spain and I love it, but the mentality is really off. Unless they fix that, I'm not positive about the future of people here. It's good to see that that's not only me; someone else in this thread (read my other comments if you care to) said mid 30s might be ok, but they don't seem to be either in mine (and your friends' experience).

"€32,000 (well above many corporate jobs)" ... "80 hour weeks"

If your friend expected his early employees to work 80 hour weeks, the pay he was offering was not "well above many corporate jobs".

I don't see that Spain is at the worst of it. The majority of the people I talk to about this, both family, friends, and people on the street (seriously, I ask cashiers, waiters, friends of friends) don't seem to get it it yet.

Most of the debt issues are just coming to light, small town/village governments are still doing the same old thing, and the "people in power" are still getting away with it.

Nothing is going to make this go away, and this government, with their watered down transparency plans and regional examples (think Madrid and Comm. Venlenciana) isn't going to be capable to doing what it takes. There's just too much mud on their hands.

I will say when my wife and I spent some time on Ibiza and Mallorca that the attitude of the workers there seemed a little different, perhaps because these places are so heavily sold into servicing northern Europeans. On the mainland the amount of people I have seen collecting paro and working, or collecting power and rejecting work is horrible.

Unfortunately all this is true, but something is finally changing (although slowly). My wife used to see as a doctor lots of people that where feigning illness just to get the medical dismiss and receive a pay without working. They even came to the hospital with their lawyers in order to intimidate the doctors or worst physical threats and yelling.

Now all this has almost disappeared, not completely but is much better. People is realizing that the Belle Epoque where everybody had right to receive money for nothing is gone.

Okay, so they aren't gaming the system in that manner, and in that there is a ray of hope.

But it could also be that they are out of work and cannot play that game any more, instead are either 1. properly (or willfully) unemployed and on Paro or 2. they are working under the table and collecting Paro or 3. they are simply working under the table or 4. they are unemployed and have zero income...

Well there is still people that is not working and just wants to game the system to obtain more money, but much less than before.

At the higher point people was rejecting job offers because they had unemployment and didn´t want to lose it. It has been pretty standard(I have some friends and family who have been doing exactly this) to have a temporal contract in any job (6 months or 1 year) and when it finished you went to receive your unemployment pay till you finish it, 6 months or so without looking for a job, just enjoying. Then, and only then you looked for another job!. You can not repeat more than 3 periods of 6 months, because the company will have to transform your contract to a fixed one. So it does´t really matter how good you are, you are going to be fired no matter what after a year and a half.

Work contracts here are a bad joke (they have changed the law, but I don´t think it will really change that much as they only made firing cheaper, hiring is still very expensive). Companies are forced to hire people with this horrible contracts that don´t allow you to get a fixed job, because it is very difficult to be flexible with fixed employees (autopun no intended). Workers become more expensive as time passes, no matter how good or bad the worker is. Also firing somebody when he has been a lot of time in the company was very expensive (40 days for year worked, now reduced to 20)

Unions are defending the rights of the fixed employees but almost no one can get one of those contracts, so they are not defending the workers that really need to be defended, but the unions status quo. Also the companies have gamed the system and played with the contract conditions of hard working people, discouraging hard work (good workers are not payed more here, in general they prefer by far a cheap and unexperienced worker than a more experienced and productive one that happens to be more expensive).

We have a system in which from school hard working people were considered dumb, and made jokes of them. You pass from one course to the next even if you fail. Why are you going to study that hard if it is possible to earn more working in construction, and receiving the unemployment help?. The same happens in the companies (not all of them of course, but it is really common), why are you going to work hard if they are going to fire you anyway when the year and a half expires no matter how good you are.

That is why a lot of young people can´t afford to go living alone, of course is a cultural problem (not moving far from your town to get a job, requesting the best job conditions even if you are not the best worker nor have experience, etc..), but working and social conditions for young people have not been very encouraging to do much differently, in fact the opposite has been true.

The excess of cheap money around made people to see working as time lost. Much better go gambling (invest) in your flat, after all you were supposed to be able to sell it for double in 3 or 4 years.

You can also add the cultural loath to the EMPRESARIO (business owner). Here if your business is making money, you´ll be suspicious of stealing from your costumers or/and your employees (maybe is a catholic sin?, or simply good ol´ envy). People rather be a civil servant or be unemployed than be an employee and much less try your own business . Now it seems that people is changing the way they look at entrepreneurship, mostly due to the internet and Facebook, and of course necessity.

All this doesn´t mean that there is no really hard working people in Spain, there is, but in general it wasn´t seen as something to be proud of. More like kind of stupid (this depends heavily on your social extraction, lower levels where the ones that fell more deeply in this trap).

Maybe this deep crisis will have the effect of reseting all this broken system, and a change to a more rational one. (just maybe)

Yeah, I think you have summed it up quite well!

I have a few neighbors who have the entrepreneurial bug and have started small businesses during this downturn. One fellow said he would be happy to be making enough to employ his brother in-law and take home 1300 for himself.

Spanish modesty and enjoying the good life, while creating a proper small business and employing one or two people. Ole, here's to more people like that!

"collecting paro and working, or collecting paro and rejecting work is horrible."

Paro = unemployment insurance in Spain.

What you are saying about things being under the carpet, I totally agree with you. While living near Andalucia it was evident there was a huge social and structural problems that was not financially sustainable, but yet things on the surface appeared to work out.

Perhaps a good side effect of how unemployment benefits work there is that people become willing to gear down their salary expectations. You have a long period of living off the dole where you reduce your spending, and by the time that runs out you are probably more willing to work for less. I thought I would never say this, but this might be what saves Spain and the Eurozone by allowing Spain to become more competitive without inflation.

You can't hire doctors for 1000€(18-20keur/year gross). The lowest paid doctor working for the public health system gets 42keur/year. That's very low, even portuguese doctors are better paid, but that's nowhere near 1000eur/month.

You can hire entry level programmers or engineers por 18-20k, but experienced ones will cost you 25keur or more, and probably you can get better price/quailty ratio in Eastern Europe.

Until very recently that was the norm, my wife is doctor in a public hospital. Here in Mallorca they are closing 2 public hospitals and the private ones don´t have money to pay their employees. Doctors always can emigrate to Dubai, Australia or places where they can get high salaries but most spanish doctors won´t move from Madrid to Toledo just to get a job, much less go to a place where you have to learn a foreign language and be far from the family.

Maybe 1000€ for doctors is a bit too low is true, but this year we are going to see stuff like that for people who doesn´t want to move away from their city.

Do you think that house prices have found a bottom yet? I fear that the structural reforms you mention will not have enough of an effect on public finances quickly enough if house prices keep falling and more banks go bust.

Looking at spanish stocks, I wonder why Telefonica is falling so precipitously. That seems way overdone to me.

I don't think so. Not on the med coast, anyways! Still way too many empty places.

Sometimes I wonder if a return to the Peseta and devaluation would bring back the foreign money in the RE market... It would at least move towards filling up the housing bubble with real money.

But of course devaluation is just a temporary effect that discourages structural reforms.

You forgot to mention that "this government" is also aligned with the "craziness" If not how do you justify the 20billion rescue on Bankia? That money at least doubles the amount "recovered" in the spending cuts. Although is true that they are introducing changes fast.

Bankia is the result of many "Cajas" creating a bank together. "Cajas" are non-profit financial institutions that have to use their benefits for social responsibility (http://en.wikipedia.org/wiki/Savings_bank_(Spain).

Admin council of "Cajas" are formed by people selected by political party in power in that region, thus "Cajas" are highly politized. Many "Cajas" had a lot of toxic assets, and were forced to unite and create Banks to be able to refinance themselves.

Bankia is the fusion of many "Cajas" controlled by the PP (Partido Popular - Popular Party, right-wing party) in an effort to create a "Bank of Popular Party", that is Bankia. The "Cajas" involved, being the most important Caja Madrid, had huge losses due to toxic assets. The fusion of all of them won't get anythyng but a even greater hole.

That hole of toxic assets is being nationalized and assumed by the state. Remember that Spain is now ruled by the PP. That allows effectively saving Bankia as a Bank of PP. But Bankia is NOT owned by the state, only 100% of BFA (the bad part of Bankia) is owned by the state, which in turn controls 45% of Bankia. That leaves 55% of Bankia, free of toxic assets and owned by private hands, but effectively controlled by the PP.

You are right that the PP is trying to fix their own mistakes. But the Spanish central bank has been instrumental in hiding ALL the spanish banks holes (or ignoring it or I don´t know what they have been doing). There are no cajas without exposure to the crisis, all the local governments have used them as if they where their own bottom less booty that had to be shared out.

Someone should take responsibility for letting Bankia go public. You can't let IPO a company knowing that it will sink eventually (12/18 months!).

I see all this as a multi-billion euros scam

Maybe I wasn´t very explicit but in the second paragraph I say that it has been a general illness. All the spanish politicians have behaved equally, despite their party or region. It has been a gold rush and nobody is free of guilt. The only thing that I am stating is that finally the central government is taking action (late, maybe too late), the former one just sited on their asses doing nothing because after all they were going to lose anyway and why lose more votes and carry that bad karma when the next government cant take it all?(no great statemen lately around here :( ). If they had won this elections for any reason, they surely would be doing something pretty similar (after all Merkel has been dictating the economic measures this last 6 months). We don´t have too much options left and even then is maybe too late. (I really hope not)

Well, I don't think the PP had much of a choice. And there wasn't really much the PSOE could do either. This is much bigger than either party, because its the sum of both parties' opulent building and pocket filling, from the local governments right up to the king's son in-law :)

And for the sake of being in the Euro the margin call has come, so to speak.

What I don't get, is why didn't they at least try to clean things up a little bit before all of this? I guess Aznar's idea was that the economy would pull thru all of the the corruption with the housing bubble. Kinda shortsighted.

I think whole Europe will pay because of being too late... I live in Barcelona since 2009 and I couldn't believe the total lack of reaction of the current government at that time. I don't know if it was because they didn't know what to do (anything should have done better than nothing I think) or if they didn't want to pay the political cost of doing something "wrong", which, ironically, they have paid because of doing absolutely nothing at all!

I don´t think people realize how little the former government did, and now with their opposition strategy they are in fact gaining support little by little. They only have to criticize the cuts and call them "right wing" and people will flock to them. We don´t want to hear bad news, and when you have had 3 years of them, some people is asking for somebody to sell them the snake oil that will bring everything back to 2005.

People have been getting mortgages way over what's reasonable. Local banks have been getting credits to provide these mortgages they knew were unreasonable. Foreign financial institutions have been lending money and allowing debt levels to rise uncontrollably. Industries everywhere have benefited from all this available money to sell more product (esp. houses). Politicians, companies and markets have emphasized and focused on short-term benefits over any kind of long-term strategy.

Everyone, everywhere has stood by and let this happen, because everyone assumed that everyone else knew what they were doing. Voices of concern were quickly silenced. Nobody wanted to be the party pooper, nobody has done anything to prevent this, nobody wants to bear the responsibility for what has happened, and nobody knows how to fix it.

I completely agree! and once the party is over the panic is going probably too far too.

As I said here already in another comment; that 'lining up' of programmers here isn't exactly happening.

I know that in Madrid salaries are around 2000€ month or more, here in Mallorca it can be something less I think more around 1500€ (it used to be much more of course but everything is going down pretty fast). Any way is a bargain compared to US salaries, and I think salaries will go further down during this year(although maybe not so much in programers as is a realatively hot market here too). It is also true that you receive what you pay for and good programers are earning much more than that, and always in short supply.

Any way I´ll tell you in a couple of weeks, as I am planing to hire 2 or 3 programers along this month.

The last part of your comment reminds me of that stock trader who saw the crisis as an opportunity to make a lot of money and was very glad about it.

http://www.bbc.co.uk/news/business-15059135

That guy was outed as a Walter Mitty. You can check for yourself: he's not and has never been registered with the FSA. He fooled the BBC because he said what they wanted to hear, this was a big blow to their fact-checking credibility.

I don´t think that catching falling knives is a good way to make business, but now that the market is so low, some companies are taking undeserved punishment, just due to the panic. Go and ask Warren Buffet how he made his money.

Please read again what I wrote as it has nothing to do with what that guy said . Somebody commented if there are opportunities here in Spain due to the crisis, and I still think there are, if you know what you are looking for.