[sukruh]

If you were comparing what the other company was charging your company for their developers: Labor and software services have different markets. Because, among other things, tax/insurance regulations and the expectations of contract longevity are not the same. A software shop needs to charge 2-3x salaries to be profitable. I was referring to a theoretical free market for labor.

If you were comparing salaries, either your company was compensating you with extra prestige, job security, etc. or you were underpaid.

[AdrianB1]

I am comparing manager/architect positions in Europe with long-term (5+ years) contractor positions in India. Yes, I know contracting is more expensive than employees, but not to this level. We use contractors because internal developers would be paid so bad, nobody would apply (and they don't).

[pixl97]

I'd say they pay bad so they don't have to have the local employees that would be protected by strong local laws. Contracting is effectively cheaper, mostly because the company doesn't care about the health of the local company/economy.