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$50/hour engineer vs. $5/hour engineer 24
- Thread starter QCE
- Start date
The obvious answer as to how we differentiate ourselves: we get paid $45/hr more.
So the guy who gets paid $50/hr must have some of the following qualities:
Faster
More accurate
More responsive
More knowledgeable
Communicate better
Etc.
In other words, be a better value.
So the guy who gets paid $50/hr must have some of the following qualities:
Faster
More accurate
More responsive
More knowledgeable
Communicate better
Etc.
In other words, be a better value.
Must be quality of education and experience. The same could be asked what is the difference between an engineer who has 20 years experience and one that is a fresh grad? A fresh grad can do basic engineering calculations, but that life experience must be worth something, or the salary of the 20 year engineer would not be twice that of the fresh grad.
I was contacted by a head hunter today, looking for someone to go work for a major oil company in the Middle East. The company is paying $10,000 per month plus huge benefits. In today’s reality, why would a company in the middle east be the least bit interested in paying that kind of money to bring in a American? Especially with the attitude of certain segments of the population in that part of the world toward Americans? And when they have that huge labor pool just a short hop over the Arabian Sea? I have to believe that the $5 an hour engineer in India just doesn’t have the required skill set.
I was contacted by a head hunter today, looking for someone to go work for a major oil company in the Middle East. The company is paying $10,000 per month plus huge benefits. In today’s reality, why would a company in the middle east be the least bit interested in paying that kind of money to bring in a American? Especially with the attitude of certain segments of the population in that part of the world toward Americans? And when they have that huge labor pool just a short hop over the Arabian Sea? I have to believe that the $5 an hour engineer in India just doesn’t have the required skill set.
- Thread starter
- #4
OK but what about an engineer in India (by the way I did not mean to point out India I meant anywhere that can supply cheaper engineering services) with 20 years experience vs a American engineer with 20 years experience.
Lets even suggest that they have the same skills and experience.
Why would a company select one in America over one in India if the work could be translated over the phone or internet.
Think about it. There are reasons to hire both.
sms: you make the first good point in a round about way.
Some engineering skills are region specific. I'm sure that engineers in Alaska have more experience designing for cold weather than engineers in Mali. So therefore you might pay more for an engineer in Alaska to do the design than an engineer in Timbuktu.
Lets even suggest that they have the same skills and experience.
Why would a company select one in America over one in India if the work could be translated over the phone or internet.
Think about it. There are reasons to hire both.
sms: you make the first good point in a round about way.
Some engineering skills are region specific. I'm sure that engineers in Alaska have more experience designing for cold weather than engineers in Mali. So therefore you might pay more for an engineer in Alaska to do the design than an engineer in Timbuktu.
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1
- #5
My opinion, the engineer that is paid $5 bucks an hour in Timbuktu is probably making a decent salary in Timbuktu! Salary of most occupations is based on "location, location, location" very similar to the slogan used in assessing real estate property.
What difference does it make if the Timbuktu engineer has an MS or even PhD, that is comparable to similar degrees granted in the US. It makes NO DIFFERENCE! I would bet anybody on this forum that the engineer from Timbuktu, if given the opportunity to relocate to the US or any other developed country, will NOT work for $5 bucks an hour for very long. So, comparisons between foreign engineers and engineers educated in this country are meaningless. Salary will be dictated by cost of living in the region and the supply of "qualified" job applicants.
I suppose those of us that could relocate to Timbuktu for jobs could try and negotiate a slightly higher salary, perhaps $7 bucks an hour. You never know, it could mean a better life style?
What difference does it make if the Timbuktu engineer has an MS or even PhD, that is comparable to similar degrees granted in the US. It makes NO DIFFERENCE! I would bet anybody on this forum that the engineer from Timbuktu, if given the opportunity to relocate to the US or any other developed country, will NOT work for $5 bucks an hour for very long. So, comparisons between foreign engineers and engineers educated in this country are meaningless. Salary will be dictated by cost of living in the region and the supply of "qualified" job applicants.
I suppose those of us that could relocate to Timbuktu for jobs could try and negotiate a slightly higher salary, perhaps $7 bucks an hour. You never know, it could mean a better life style?
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- #6
I have done more than a little "repair" on CAD designs that originated in the Far East. I don't know if we're worth 10 times as much, but there are some things you just can't get done right for $5/hour, no matter where you look.
![[bat]](/data/assets/smilies/bat.gif "[bat] [bat]")
Due to illness, the part of The Tick will be played by... The Tick.
Due to illness, the part of The Tick will be played by... The Tick.-
8
- #7
Metengr,
You've really hit the nail on the head. If a $50/hr engineer in the US pays $2,000/month for his mortgage and a $5/hr pays $150/month then who pays more hours of labor for housing. Same with food, schooling for kids, medical care, etc.
You don't buy milk and bread on the world market, you buy it at the neighborhood market.
The thing is that the more people in a location make $5/hr then the more money there is in the local economy. In short order you find too much money chasing too little goods and the prices go up, then the wages feel upward pressure, and soon the whole world is better off. As these wages are pushed upward, the labor market can no longer bear the extra cost of remote management and people look elsewhere for the necessary differentials.
In my lifetime, "Made in Japan" has gone from meaning "CRAP" to meaning "Lexus". South Korea has gone from a $2/day labor market to Seoul having the highest density of PhD's in the world and "Made in South Korea" standing for some pretty awesome products. Companies will always take advantage of localized differentials between value and cost, but these differentials are always temporary.
I just don't see any cause for either gloom nor doom. Maybe changing careers 4 times and moving for a job 16 times in my life makes me see that change really is the big constant in the universe and within every change is opportunity for profit and personal advancement. People not looking for opportunity are called "victims" and they sit around whining about the good old days. I've always found the next challenge to be way superior to past laurels.
David
You've really hit the nail on the head. If a $50/hr engineer in the US pays $2,000/month for his mortgage and a $5/hr pays $150/month then who pays more hours of labor for housing. Same with food, schooling for kids, medical care, etc.
You don't buy milk and bread on the world market, you buy it at the neighborhood market.
The thing is that the more people in a location make $5/hr then the more money there is in the local economy. In short order you find too much money chasing too little goods and the prices go up, then the wages feel upward pressure, and soon the whole world is better off. As these wages are pushed upward, the labor market can no longer bear the extra cost of remote management and people look elsewhere for the necessary differentials.
In my lifetime, "Made in Japan" has gone from meaning "CRAP" to meaning "Lexus". South Korea has gone from a $2/day labor market to Seoul having the highest density of PhD's in the world and "Made in South Korea" standing for some pretty awesome products. Companies will always take advantage of localized differentials between value and cost, but these differentials are always temporary.
I just don't see any cause for either gloom nor doom. Maybe changing careers 4 times and moving for a job 16 times in my life makes me see that change really is the big constant in the universe and within every change is opportunity for profit and personal advancement. People not looking for opportunity are called "victims" and they sit around whining about the good old days. I've always found the next challenge to be way superior to past laurels.
David
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1
- #8
QCE:
For a slightly different take on the question (but it will tie in, trust me)
I work in Forensics. My firm has built a reputation as being very thorough, and one of the best in our area. As a result we are able to, and do, charge more than “going rate”. We can do this because our customers have an expectation of a higher level of quality. At the end of the day we still offer similar services than our competitors. It has taken us a whole lot of effort to develop that reputation, and if we lose it, we might never be able to get it back.
The point is that regardless of the reality of value, it is the perception of value that your customers have to understand. Often the perception follows the reality, but in the end it is the perception.
In terms of the Bangalore engineer, the same relationship exists. Currently there is a perception that the $50/hour engineer is worth that money. Rather than what is the current difference in the engineers, perhaps we need to think about what has happened in the past to give us the perception of value in the eyes of our customers (for the most part our individual customers are our employers).
Historically I would start looking at licensure, and world leadership in education (both academic and applied) of our engineers have lead to the current perception of value. There has to be reasons other than just convenience? Any other ideas?
Dave
For a slightly different take on the question (but it will tie in, trust me)
I work in Forensics. My firm has built a reputation as being very thorough, and one of the best in our area. As a result we are able to, and do, charge more than “going rate”. We can do this because our customers have an expectation of a higher level of quality. At the end of the day we still offer similar services than our competitors. It has taken us a whole lot of effort to develop that reputation, and if we lose it, we might never be able to get it back.
The point is that regardless of the reality of value, it is the perception of value that your customers have to understand. Often the perception follows the reality, but in the end it is the perception.
In terms of the Bangalore engineer, the same relationship exists. Currently there is a perception that the $50/hour engineer is worth that money. Rather than what is the current difference in the engineers, perhaps we need to think about what has happened in the past to give us the perception of value in the eyes of our customers (for the most part our individual customers are our employers).
Historically I would start looking at licensure, and world leadership in education (both academic and applied) of our engineers have lead to the current perception of value. There has to be reasons other than just convenience? Any other ideas?
Dave
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3
- #9
It doesn't mean that if an engineer has graduated elswhere then in an "economically developped" country that he knows better then an engineer who graduated in an "underdevelopped" country. I was born and raised until I was 13 years old in a country that is considered "underdevelopped". I was in the top 20% of my class, and maybe top 30% in the whole elementary school. When I came to Canada, I jumped grades, and was the best student that my high school has had in years! I was maybe in top 10-15% in CEGEP and the same in University... What did that tell me? That there are a lot of my classmates from my elementary school, who are working as engineers over there, that are better then me, but that don't have all the opportunities and big companies over there like we have in the "developped" countries. This does not mean that if put in a situation they will not be able to do an as good or even a better job then us here.
And by the way, I do not differentiate myself from a $5/hour engineer. They simply live in a place where that is considered a very good pay!
Coka
And by the way, I do not differentiate myself from a $5/hour engineer. They simply live in a place where that is considered a very good pay!
Coka
ruggedscot
Electrical
But COKA you were the top in your old country, and as you were in school you would find that you were surrounded by other privileged kids... But the majority of people in that country would not be able to match that, ie didnt have the skills or ability to get to the same position. Life circumstances holding them back. Once you left that situation and got to a country that had a better standing in regards to education and such you found that you were even further up compared to your compatriates. This is what Id have expected, as in canada there are many opportunities to get education and progress but not the same drive as what there was in your previous country. The need for improvement not as acute as most people have health houses and cars unlike the 'old' country. The drive to exceed and live a better life isnt as strong.....
does that make sense or not ?
Rugged
does that make sense or not ?
Rugged
Rugged,
Don't get me wrong. I am blessed that I came to Canada and that I am where I am today. However, bookwise, not opportunitywise, I don't think that "developped" countries are ahead of the rest of the world! My country was ravaged by war, and when we moved here, my parents' diplomas were not worth anything. Mind you they are not engineers. However, when nobody else could get landed immigrant visas and get out of the country due to the embargo, Canadian companies were issuing work visas for all kind of engineers from over there. I kid you not, there is at least 6 of my compatriotes that escaped the war and that got big bucks to come to work in Canada that I know of. All because of the experience that they have as well as the technical knowledge way above average. And they were in the pool that is classified in this post as $5/hour engineers.
And what I was trying to say in my previous post is that I was above average over there: in the top 30%, and here I was closer to the top: in the top 15%. It may be because students were more pushed towards science there, whereas here they have a bigger choice... Or simply because as of elementary school, they new that they will have to work hard to be able to get $5/hour pay check. I know... I was like that too... When you know that it is burning under your feet, and that you really have to work hard as of elementary school if you want to be someone later on in life, you study hard...
Coka
Don't get me wrong. I am blessed that I came to Canada and that I am where I am today. However, bookwise, not opportunitywise, I don't think that "developped" countries are ahead of the rest of the world! My country was ravaged by war, and when we moved here, my parents' diplomas were not worth anything. Mind you they are not engineers. However, when nobody else could get landed immigrant visas and get out of the country due to the embargo, Canadian companies were issuing work visas for all kind of engineers from over there. I kid you not, there is at least 6 of my compatriotes that escaped the war and that got big bucks to come to work in Canada that I know of. All because of the experience that they have as well as the technical knowledge way above average. And they were in the pool that is classified in this post as $5/hour engineers.
And what I was trying to say in my previous post is that I was above average over there: in the top 30%, and here I was closer to the top: in the top 15%. It may be because students were more pushed towards science there, whereas here they have a bigger choice... Or simply because as of elementary school, they new that they will have to work hard to be able to get $5/hour pay check. I know... I was like that too... When you know that it is burning under your feet, and that you really have to work hard as of elementary school if you want to be someone later on in life, you study hard...
Coka
ruggedscot
Electrical
COKA this was not a dig far from it, Im british based and work in facilities. I too went to canada went to the west coast and worked for a company on the fly as I was seeing a canadian girl. I spent 10 months or so over there and enjoyed the experiance but you know as they say there is nothing like home. I missed my friends and I missed my family, so as things were not to great with my 'friend' I decided to return back to the UK. I had a few jobs after returning and then settled in this job where I have been for the past three years. I did some overseas work and I worked in Latvia and also over in Bosnia, now I can see why people wanted to leave Bosnia, a beautiful country but it is / was ravaged with war and bad feeling between the poeples that lived there. It would be a great country if it wasnt for the squabbles that existed.... Anyways I was lucky I lived in the UK, and I could go back to there as it is a country that has opportunities and support. Canada was the same, it had opportunities and the scenery and lifestyle in BC was exemplatory. I really liked it and could see the pull that it had on people. But as I said things didnt work out and I missed home way too much to stay in BC and I returned back to the UK. A previous post said you dont buy milk and bread on the world market and that is so true, its the things around you that give you satisfaction, friends family and life style. I saw that and well followed my instinct. Im pretty glad about that now as Im settled and I have a nice girlfriend and live comfortable here in scotland. People do move about and they move for many reasons.
Rugged
Rugged
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1
- #13
The issues are not only costs (prices) but also supply and demand as well as quality and location, which is tied to costs. When someone goes to a department store to try something out for the first time and they expect the cost of an item to be within a certain price range and then find an item in that range they take it off the shelf and purchase it. Perhaps there were other similar products on the shelf and they cost significantly more. If the original purchased item works for the person, then they will most likely be satisfied. If it doesn't they will start to look more closely at the differences between the item they purchased and the higher priced items. Then they have a decision to make - to try another lower cost item in hopes that it will work for them (maybe the first was a fluke or a lemon) or go to a (hopefully) superior although more costly product. Everyone wants the best value for their dollars.
I do business development and one of the conflicts that I face with my "pitch" is that although my firm doesn't do the same thing over and over again we try to promote our versatility, adaptability, our experience with a wide range of clients, and industries and problem types versus our competitors that only do one thing. Often times they (our competitors) have that "thing" down so pat that they can bring on less costly junior engineers to do the basics. Even though they will take several more hours to do the "thing" at their lower rate they do cost less. (What they produce may not and probably is not the best product for the clients money.)
SOOOOOOO, how do we get to location and its relation to costs? I have probably worked with scores of engineers from India, China and the middle east in the twenty or more years that I have been in engineering, and one thing they have in common is that they most likely went to school for at least their masters either in the UK or the US. Therefore assuming their capabilities, i.e. their quality, is the same as an American or UK or Canadien engineer and that they live in an area where the cost of living is much less lower than ours, then they can afford to charge less and still have a standard of living that they find acceptable, albeit not necessarily as "high" as ours. If that is where they are based and with the global economy and worldwide instant communications through the internet they can be a very economical solution to the business model where in order to be competitive, they have to continually reduce costs, then overall prices and then they can still maintain or even increase their profits. Profits are not evil and are necessary in order for capital expansions to take place (growth) and also what everyone would like - raises in their salaries/rates of pay. However, price is not the only variable, so either improve turnaround and/or quality.
In my business development, that is what I do not know how to demonstrate, higher quality on what the client wants in the near future. I can demonstrate quality on past jobs but not the future one. I like to think that I can do a better job. I sure love trying to! And it gives me great satisfaction. But what I am selling is not a manufactured item that has gone through a series of tests and demonstrations prior to placement on a store shelf. The client can not see or touch the product or even read the specs before they make a decision to purchase my product. Put ten different competing engineers in a room and ask for a problem solution and you could get 10 different answers. Some will be more economical than others, some could be delivered quicker than others and some may be of a higher quality whether that quality is defined by performance, or life cycle, or some other parameter. This is the challenge that sales people face in engineering and it is also the challenge that we each face in our careers. We have to demonstrate, i.e. sell ourselves, more often that we would like to think - such as only when we are looking for a new job. Look at some of the book titles for marketing and you will see titles that read "tooting your own horn", "getting out and doing", "meeting people and presenting yourself". The squeeky wheel gets the grease. Whoever advertises has a better chance of getting the work irregardless of their quality. So either you hit them the potential client with a special three for one type deal (low cost widgets from far away) or else keep reminding your potential clients that you are here to serve/meet their needs. I am sure there is more and I am still learning. The lesson is ever changing and elusive.
I do business development and one of the conflicts that I face with my "pitch" is that although my firm doesn't do the same thing over and over again we try to promote our versatility, adaptability, our experience with a wide range of clients, and industries and problem types versus our competitors that only do one thing. Often times they (our competitors) have that "thing" down so pat that they can bring on less costly junior engineers to do the basics. Even though they will take several more hours to do the "thing" at their lower rate they do cost less. (What they produce may not and probably is not the best product for the clients money.)
SOOOOOOO, how do we get to location and its relation to costs? I have probably worked with scores of engineers from India, China and the middle east in the twenty or more years that I have been in engineering, and one thing they have in common is that they most likely went to school for at least their masters either in the UK or the US. Therefore assuming their capabilities, i.e. their quality, is the same as an American or UK or Canadien engineer and that they live in an area where the cost of living is much less lower than ours, then they can afford to charge less and still have a standard of living that they find acceptable, albeit not necessarily as "high" as ours. If that is where they are based and with the global economy and worldwide instant communications through the internet they can be a very economical solution to the business model where in order to be competitive, they have to continually reduce costs, then overall prices and then they can still maintain or even increase their profits. Profits are not evil and are necessary in order for capital expansions to take place (growth) and also what everyone would like - raises in their salaries/rates of pay. However, price is not the only variable, so either improve turnaround and/or quality.
In my business development, that is what I do not know how to demonstrate, higher quality on what the client wants in the near future. I can demonstrate quality on past jobs but not the future one. I like to think that I can do a better job. I sure love trying to! And it gives me great satisfaction. But what I am selling is not a manufactured item that has gone through a series of tests and demonstrations prior to placement on a store shelf. The client can not see or touch the product or even read the specs before they make a decision to purchase my product. Put ten different competing engineers in a room and ask for a problem solution and you could get 10 different answers. Some will be more economical than others, some could be delivered quicker than others and some may be of a higher quality whether that quality is defined by performance, or life cycle, or some other parameter. This is the challenge that sales people face in engineering and it is also the challenge that we each face in our careers. We have to demonstrate, i.e. sell ourselves, more often that we would like to think - such as only when we are looking for a new job. Look at some of the book titles for marketing and you will see titles that read "tooting your own horn", "getting out and doing", "meeting people and presenting yourself". The squeeky wheel gets the grease. Whoever advertises has a better chance of getting the work irregardless of their quality. So either you hit them the potential client with a special three for one type deal (low cost widgets from far away) or else keep reminding your potential clients that you are here to serve/meet their needs. I am sure there is more and I am still learning. The lesson is ever changing and elusive.
profengmen
Mechanical
We depend on quick turn around. We don't have time to wait for someone in another country to wake up and go to work so that they can read our Email and get back to us when we wake up. We need drawings quoted in as little as one day or we won't get the job.
I've spent many years managing overseas engineering teams; It's quite costly, depending on the products. The logistics sometimes make the $5 engineer more like $75.
I've spent many years managing overseas engineering teams; It's quite costly, depending on the products. The logistics sometimes make the $5 engineer more like $75.
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- #15
GregLocock
Automotive
Interesting. We sometimes work tag team around the globe, so the US guys finish up, then spend and hour on the phone with us, we pick it up from there and run into the next morning. Then back to them.
This works a lot better now as we can load everything onto the intranet, or even share the same files.
Admittedly we don't have many jobs that can be resolved in 8 hours, and if we do, they don't get outsourced.
Cheers
Greg Locock
This works a lot better now as we can load everything onto the intranet, or even share the same files.
Admittedly we don't have many jobs that can be resolved in 8 hours, and if we do, they don't get outsourced.
Cheers
Greg Locock
- Thread starter
- #16
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1
- #17
The only reason a company would pay more, is that they believe they are getting more. The values of US engineering would be closeness and perceived quality. Both of these have a dollar value for any given project; consequently when they add up to less than $45, outsourcing is justified. The interesting part to me is that the value of closeness and perceived quality is different for every individual.
This comes down to a very fundemental thing for me: I believe it is my personal responsibility to ensure that I am worth more to my employer than cheap outsourcing. I must further my education and grow my experience in a valuable way. The world does not owe me anything...
Grüss - Scott
This comes down to a very fundemental thing for me: I believe it is my personal responsibility to ensure that I am worth more to my employer than cheap outsourcing. I must further my education and grow my experience in a valuable way. The world does not owe me anything...
Grüss - Scott
QCE,
I picked this tidbit up from the internet a couple of years ago. I have found that it answers many of the issues related to what one pays for services. It hangs on my office door...
High Quality
Fast Service
Low Price
Pick any two!
Steve Braune
Tank Industry Consultants
I picked this tidbit up from the internet a couple of years ago. I have found that it answers many of the issues related to what one pays for services. It hangs on my office door...
High Quality
Fast Service
Low Price
Pick any two!
Steve Braune
Tank Industry Consultants
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- #19
QCE,
Well there's no good reason why! The bad news is that "underdeveloped" countries develop themselves and compete against the rest. Too bad, that's the market. If we can't be as cheap, we have to try and be better. We may succeed, we may not. The good news is that if we don't, "underdeveloped" countries will soon become as expensive as the others and will lose their temporary advantage.
Well there's no good reason why! The bad news is that "underdeveloped" countries develop themselves and compete against the rest. Too bad, that's the market. If we can't be as cheap, we have to try and be better. We may succeed, we may not. The good news is that if we don't, "underdeveloped" countries will soon become as expensive as the others and will lose their temporary advantage.
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2
- #20
Great forums here folks, glad I found them.
I work for a very large company and outsourcing to another country will happen for a lot of IS programming work that needs to get done. Trips have been made to and meetings attended in a middle east country. Similarly, outsourcing of manufacturing is being investigated in an asian country, again with trips and meetings behind us.
IMO I agree that the logistics will be a huge cost upper, whether the execs realize it yet or not. I only fear that by the time they do realize it, irrepairable damage will already have been done. Imagine the cost of shipping stuff back and forth to asia everytime a change or repair has to be made! The internet drastically reduces strain of logistics for information work however. Large volumes of data can be transferred securely back and forth on a daily basis.
What looks good on paper usually drives executive decisions. Unfortunately the paper numbers are often based on many assumptions by ivory-tower dwellers who are more often rewarded for incorrect positive projections than accurate negative ones.
I'm afraid that the only way to guarantee viability is to always be more valuable than your peers.
I work for a very large company and outsourcing to another country will happen for a lot of IS programming work that needs to get done. Trips have been made to and meetings attended in a middle east country. Similarly, outsourcing of manufacturing is being investigated in an asian country, again with trips and meetings behind us.
IMO I agree that the logistics will be a huge cost upper, whether the execs realize it yet or not. I only fear that by the time they do realize it, irrepairable damage will already have been done. Imagine the cost of shipping stuff back and forth to asia everytime a change or repair has to be made! The internet drastically reduces strain of logistics for information work however. Large volumes of data can be transferred securely back and forth on a daily basis.
What looks good on paper usually drives executive decisions. Unfortunately the paper numbers are often based on many assumptions by ivory-tower dwellers who are more often rewarded for incorrect positive projections than accurate negative ones.
I'm afraid that the only way to guarantee viability is to always be more valuable than your peers.
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