The IT outsourcing market is forecasted to grow to $413.7 billion by 2021, up from $66.52 billion in 2019. The business world is currently facing an unprecedented surge in outsourcing for IT projects, specifically software development. Using outsourcing as a tool is beneficial to small and medium-sized enterprises (SMEs) in particular, as it improves resource allocation and fosters cost reduction. This is the main reason why business leaders are already improving their knowledge of how to hire offshore software developers.
If you want to hire an offshore IT team and know in advance about possible challenges, problems that the team can help to solve, about communication methods – we have compiled an ultimate checklist for hiring offshoring developers that might come in handy and save your valuable time.
First, outsourcing is usually classified into three categories, using the distance parameter. These are Onshoring, Nearshoring, and Offshoring.
|This is outsourcing to another city within the same country. An instance is when a company in Seattle partners with freelance developers or a software agency located in New York.||Outsourcing to a different, but nearby country. Say, a company in Israel outsources to Estonia.||Outsourcing to a distant country, for example, when a US company outsources to Estonia.|
As we all know, it’s the team that makes startups successful. And with limited time and generally quite limited financial resources, it’s important to allocate available resources wisely. This is where hiring offshoring teams can prove useful.
To begin with, in countries with product-oriented IT markets there is a significant shortage in qualified developers who aren’t working on other projects. It means that hiring locals in let’s say the US or Western Europe (UK, Germany) can be incredibly time-consuming (the hiring process might stretch for 6-12 months) and expensive, since the pay rate in those countries is higher. And with a stalled time to market, startups are bound to lose investors and customers.
Offshoring is a great solution to this problem, allowing you to find talented developers in labor-abundant markets without wasting time and money. And if you are interested in this, then our article is exactly for you.
Why Hire Offshore Developers for Your Startup?
The Offshoring model of outsourcing is associated with a number of risks, including time-zone and cultural differences that impede communication. The purpose of this article, however, is to demonstrate how to hire an offshore development team and make offshoring work for you. But before that, we must explore the benefits associated with offshoring specifically.
Benefits of Offshore Software Development
The reasons why many businesses look to distant locations for their software needs and choose to hire an offshore software development team may be different. In other words, what are the offshore software development benefits, or why outsource software development?
- Flexibility is one of the most important reasons companies may prefer to hire developers overseas. When using offshoring, it is simple to add or remove coders from a team. Indeed, you may not even need the entire team to be present from the start of the project. Instead, at each stage of the process, you can bring in the necessary professionals. Software development is no exception to the rule that flexibility is essential for business success.
- Also, many companies augment their software development or IT teams by hiring offshore developers to fill gaps in their teams. For instance, if your team is missing a mobile developer and needs to build a mobile version of an application, you can easily contract that role to a distant country for the duration of the process. Offshore workers, since they require no extra training, are ready to begin from the moment they have been hired. So this helps to quickly get a project started without delays.
- Another advantage of outsourcing to a remote team, even if you already have an in-house IT team, is that it keeps your team focused on routine tasks. IT teams must stay on top of network issues, maintenance, cybersecurity, and so on. If you are able to hire offshore software programmers, they may be able to relieve some of the strain on your team. This shared responsibility is a win-win situation, as it results in high-quality software development as well as excellent routine operations.
- It helps to lower project costs. Anyone who has been involved in software development can testify to how costly it can be, particularly in hiring and onboarding experts as well as purchasing infrastructure of the project’s needs. Offshoring, on the other hand, is cost-effective because it eliminates these. Furthermore, despite the fact that the level of education and skills is the same, the cost in certain countries is significantly lower than in the West. For example, if you want to go with offshore software development, Central Europe can provide you with a high-quality product at a lower cost.
- When you hire offshore programmers, you bring fresh perspectives to the development process. If you are a company looking to expand globally, this is really important. The distant outlook of foreign professionals helps you to determine where your company stands when compared to global standards. For example, you can hire eCommerce developers to get access to their unique knowledge and experience.
Challenges of Offshore Software Development
As attractive as this model may seem, when you hire remote offshore developers you might be vulnerable to some of the challenges. This is especially relevant to beginners who do not have enough experience in hiring and managing a team of remote employees. The good news is – everything can be overcome, even these pitfalls. In the end, knowing about the possible risks, you can take steps to minimize them. And yet, what exactly are we talking about?
- Complexity in the communication process is one of the barriers to those who want to hire programmers overseas. Starting from the language barrier and ending with the difficulties in holding planning meetings and other operational management issues. Not to mention that some managers still prefer to meet with their subordinates face to face, which is quite difficult to do when your employee is on the other side of the globe. Add to this the time spent on long conversations and attempts to convey the idea to the developers, and as a result, you can get even more hidden costs that threaten to affect your budget.
However, two pandemic years of working remotely and under lockdown made it possible to conclude that this is very effective! Video calls and chats allow you to quickly contact any member of the team at any time of the day, and as for the language barrier, today in many countries of the world English has been studied since childhood. Another thing is that all these nuances – fluency in English and various forms of maintaining contact – need to be discussed with employees before signing the contract.
- Difficulties in quality control. If you’re looking for an offshore development team, you’ve probably already considered how you’ll test the code’s quality. Indeed, the product that your offshore partners assist you in developing should be of the highest quality and exactly to your specifications. As with communication, many people are perplexed by workers’ remote locations. Moreover poor quality can tag along with unforeseen hidden costs, as the bad code has to be rewritten (or worst scenario where developers have to rewrite all of the code) or QA testing takes additional hours.
However, if you are hiring an offshore team from a reputable company, this risk is significantly reduced because the employee has been thoroughly vetted by the company and is accountable not only to you, but also to them. Double control avoids poor quality products.
- Cultural and socioeconomic issues are also needed to be taken into consideration when you hire developers offshore. Every country has its own mentality and mindset, that is formed through culture and tradition, and they, in turn, affect work ethics and communication. Miscommunications and relationship issues with your internal team can arise if the cultures are very far apart, slowing or undermining the development process.
The difference in mindsets, education, and location might also be the reason for additional time costs, the difference in time zones, and the impossibility of communication at a convenient time, as well as the power logic of the code delivered. All this complicates the process of creating a high-flyer product. The way to solve this issue is fairly simple: find offshore developers who share your culture or mentality and speak good English. And that is why, for instance, Central Europe is an ideal offshoring destination for countries in the United States or Western Europe.
Offshore Development Models
There are two main offshore software development models. They are project-based outsourcing and the specialist model. Understanding how to successfully outsource software development begins with identifying which model is perfect for your project.
- Project-based outsourcing occurs when a client needs to hire an offshore team for a short-term, one-off project. The purpose is geared towards swift delivery and the price is usually fixed.
- Many companies that lack in-house software developers usually hire remote programmer to fill the skills gap. This is called staff augmentation. The period can be short-term or long-term. While the dev shop supplies the developers, the client company hires a project manager or lead engineer/developer to oversee the process.
Next, let’s consider the specific steps that you must take on how to outsource software development.
Where to Hire Offshore Developers?
The next stage is to find offshore developers that work for you. You may choose to either hire an agency or hire individual developers separately before putting a team together. This takes a lot of due diligence, however, in our experience, it is easier to find offshore dev staff through outsourcing companies.
One major factor you should consider is where to outsource software development. Asia and certain countries in Europe are the most popular destinations for offshore software development. Asia is more popular, and their developers charge less, but note that this may mean a lesser work quality too.
So be careful about this. It is not enough to find a cheaper service; the most important factor is the quality of delivery. That said. Some of the countries you may consider outsourcing or outstaffing can include Estonia, India, China, The Philippines, Vietnam, Mexico, etc.
Location is important. Finding offshore developers means taking care of cultural compatibility, which may affect communication. Many developers in the popular outsourcing locations don’t or barely speak English. This does not make them less qualified, but consider how the communication gap might affect the project. You need to find an offshore dev team that matches culturally with your house team to use the best of both worlds and avoid miscommunications.
How to Hire Offshore Software Developers?
Define your needs and goals
First, you must know what you want to determine how to outsource your project. This is an obvious step, but many don’t take it as seriously as they should. What kind of application do you want to build? What type of developers would you need? What skills must they have? What infrastructure does the project require? What’s the expected time to market? What are the benchmarks for quality? How will you test the product? What’s your proposed budget? How are you planning for contingencies?
If you want to successfully outsource software development, these and many more questions are that must be answered before setting out in search of developers. Your list of needs and goals must be as exhaustive as possible, comprising every conceivable aspect of the project. Also, you must be able to differentiate the necessary from the nice-to-have. In other words, set priorities. Every decision made at this point must give you a clearer picture of how you want the project/product to turn out. That informs how to hire offshore software developers.
Define your Budget
Of course, you can’t hire overseas programmer if their payment rates do not match your budget. When negotiating the cost of the project, ensure that the agency outlines the services and infrastructure covered by the total costs and the ones that are not. One major reason companies outsource is to take advantage of superior infrastructure in the outstaffing agency that they (the client) lack.
Therefore, the total price must include the cost of using the agency’s infrastructure too. Beware that while you shouldn’t go for the cheapest agency, expensiveness does not equal quality too. The amount that an agency is requesting must not just match the services they provide, but also the value they deliver.
Another important nuance is a correct understanding of what is included in the final costs. It is a mistake to believe that the final amount will consist only of the rates at which developers work.
When budgeting, it is very important to take into account the development time as well, because the longer the development time, the more you will have to pay. Also pay attention to hidden costs that can quickly add up to the price. To solve this problem, you can read reviews of the work of your prospective partners and estimate how long it will take you to complete the project and whether there are any pitfalls.
Reach Out to Preferred Developers
Once you have determined what your project would be like, how to outsource it and, which location you want to outsource to, it is time to identify the remote vendors that you think would fit your project. If it is an agency, visit their website to find a portfolio of past projects they have handled. For individual freelancers, request their resumes and personal portfolios too.
Factors you must consider include the following:
- Skills: what skills do the developers possess? And what is their level of expertise? Though ‘software developer’ is often used as a generic term, there are different kinds of developers including web developer, mobile app developer, frontend or backend developer, Full Stack developer, DevOps developer, etc. Ensure that the skills of your vendor match the requirements of your project.
- Experience: experience says a lot about one’s problem-solving ability. The more experienced a developer is, the more varied the software problems they have faced, giving them an edge over someone who is merely skilled but not experienced. That is why people go for senior developers. If you are hiring an agency, you shouldn’t focus on the age of the agency alone. Do due diligence to know if the team members are skilled and experienced.
- Past Clients: of course, a developer’s portfolio or resume would give information about clients they have worked within the past. Yet, it is not a stretch if you reach out to past clients to confirm if they are who they say they are. It is not enough to hire only a skilled and experienced developer; you must also seek to understand their approach to work, communication skills, relationship with clients, attention to details, time management, etc. You won’t get honest information regarding this without talking to past clients.
- Value: The underlying factor of all these considerations is compatibility which, in essence, means is the agency right for you? It is important to evaluate mindsets, education, and the value of their contribution to your project. Therefore, even after finding out all the other points, you must also consider the value system of the agency. What principles do they hold important? And how do they align with your organization’s? What is the compatibility between your corporate and business cultures? Do you think alike in terms of mindsets? Will it be convenient for you to work given the time difference? What value can they bring to your project?
Once you have these details and have selected your preferred agency then it is time to contact them for an interview.
Evaluate the Skillset
Nothing will tell you more about the ability of the developers you are hiring than a test. There are different ways to conduct assessments, as well as there are different tools. However, all have the same aim: to determine if the developer is worth their mettle.
How to Evaluate Candidates?
- Questionnaires: one great advantage of questionnaires is that they don’t necessarily test how a developer codes, but their approach to problem-solving. All software is built to solve a particular problem or meet a need. Beyond coding, a developer must be innovative and apt when faced with challenges.
- Coding tests: coding tests allow you to assess the actual coding ability of the candidates. There are different tools you can use to conduct coding tests. Once the candidate is done, the code is analyzed, graded, and considered in the final decision. Coding tests often feature when hiring in-house workers, rather than offshore developers for a startup. Some companies may be unscrupulous, having candidates solve code problems for them under the guise of testing. So be wary that some may not accede it. That does not necessarily make them less qualified.
- Work Review: developers might be reluctant towards having you take a look at source codes of their real works (not samples). Some of these source codes are tied up in legal contracts (discussed below) and they may be bound from sharing them. But what you can do is review apps that they have built. Basically, conduct a mini black-box (or functionality) test. This does not have to do with code. You only review the application to determine if all its UI components are functional.
Finalize Work Conditions and Legal Agreements
This is the last stage of the hiring process. At this point, you must have selected a developer/agency already. What you need to do now is to establish work conditions without ignoring the legal aspects. By hiring an offshore development team, you are giving out access to and knowledge of your business operations, some of which may be confidential.
In building the application, the developer will have the software’s source code as well as other important data and resources. Without a proper legal framework to prescribe the ownership, access to, use, and sharing of data, there may likely be regrets afterward. You certainly don’t want that. Therefore, consider the following types of legal documents in your agreement.
- Non-Disclosure Agreement: an NDA establishes the conditions for the use and sharing of sensitive and confidential information. It prevents the vendor from sharing such data (such as the source) code with any unauthorized party for a certain period.
- Service Level Agreement: the SLA covers the entire scope of the project, the duties of the vendor, and the expectations of the client from the vendor. It includes details such as the service(s) to be provided, metrics for assessment, obligations, penalties for defaults, and so on.
- Statement of Work: an SOW is like an SLA, but it is rather focused on the obligations on the part of the clients such as payments, testing, standards, and so on. Of course, these obligations are subject to the vendor meeting requirements on deliverables, milestones, and schedules.
- Software Requirements Specification: this is the document that contains the technical details of the project. It envisions how the software is expected to run and function once fully developed. These specifications form the bases of the assessment and testing of the software when it’s built.
Why Hire Offshore Developers with ProCoders?
For many years at ProCoders, we’ve been in the business of connecting people with breakthrough ideas with talented developers who help bring those ideas to life. With access to a huge talent pool, our coders’ profiles are diverse, and their experience is impressive. We’re offering high-quality services of staff augmentation, software discovery phase, and assembling self-managed teams to fulfill any, even the most ambitious, task.
We offer many options and models of interaction based on your requests. We can easily pick up one developer for staff augmentation or immediately a team of full-stack encoders. At the same time, their skills will not be inferior to American or Western European ones, and the price will be more pleasant and profitable.
You can read more about our experience in the case study section, where we talk about our interaction with clients. There you can also get their sincere feedback on cooperation with the developers from ProCoders.
Who Can You Hire With ProCoders?
Front-end and Back-end Development Team
As a software development company, we have everything at our disposal to help you create a website, application or software, including best practices and unique knowledge of technology. For example, for our partners in Dryft, we made a cross-platform application using Ionic, Node.js and Angular, and APIs. As a result of configurations proposed by our team, including the ability to provide cross-platform solutions, costs were reduced by 60%. This is a direct example of how experience and skills can have a positive impact on your business.
Whether you want to find an offshore dev team or hire just one developer – we can make sure you have the best of the best.
Speaking of teams, it’s one of the most popular models when hiring developers overseas in out experience. Indeed, it’s efficient and practical – you have all the developers already assembled in one team, and they work as a whole to bring your business idea to life, and yet you have complete control over the development process. The main task is to find an offshore development team from a reliable contractor, and you are good to go.
With such a request, we were contacted by the Quartz Network. They needed to create a unique B2B platform, but lacked the in-house staff to carry out this ambitious and complex development process. That’s why they contacted us when they were looking for offshore developers for hire. The duration of this project was only nine months, despite the fact that the web application was created from scratch and included many functions, from creating a complete library with its own database to implementing payment integrations.
Our self-managed teams come with their own project management, so you don’t have to worry about operational issues and concentrate on the big picture. Moreover, our teams are available in any timezone, whether it is a EST, CST or PST. And if you are thinking about hiring an offshore team with ProCoders you can be assured that the composition of the team would be fully customizable to your liking with an ability to scale it up or down.
Software Discovery Phase
The stage of planning and analyzing a forthcoming product development process simply cannot be overestimated. Approximately 45% of businesses go over budget mostly because the project hasn’t been thought through. That’s why we included Software Discovery Phase in our services.
Not only are we capable of finding offshore developers but also conduct business analysis and determine your goals, deadlines, and roadmaps. Team composition, technology research and comparison, time frame estimate, budget and how much you need to invest – these are the deliverables you get when you apply for a thorough Discovery Phase from ProCoders. We will help you refine your idea and turn it into a concrete master plan with definite milestones.
Moreover, the research takes up only 2 weeks for startups, 4 weeks for medium businesses, and 6 weeks for big enterprises. A rather short span of time, but absolutely indispensable information for any owner!
There are locations that are traditionally considered offshoring IT centers, such as Estonia, Brazil, Poland, India, China. These countries are among the twenty most popular. Already here, you need to approach the choice consciously: try to choose countries where there is a high percentage of English proficiency and they are close to your in-house team in terms of culture and communication methods.
There are two models: project-based offshoring and staff augmentation. If you already have an in-house team but lack certain skills, staff augmentation might be the best solution. You practically hire a remote developer for a set period of time (usually till the end of the project), and after they return to the outstaffing company. The main advantages of this model are scalability and cost-efficiency (since you don’t have to pay for sick leaves, equipment, and holidays). The second model involves hiring an entire team that works on the project. This is more convenient for those companies that want to outsource non-core activities or without suitable developers in the staff.
Offshoring, which is a popular outsourcing model, has a number of advantages. Namely, flexibility, accessibility, and cost reduction.
The scaling process is much easier in offshoring teams, you can easily add or remove a developer as needed.
If there is a severe shortage of skill or technology in your home market, you can easily take advantage of the labor market in another country and hire developers overseas. This way you get a talented developer with exactly the tech stack you need.
Cost-reduction takes the form of taking advantage of the difference in the cost of living and the absence of the need to provide a working space and equipment.
The question of how to hire an offshore development team is a rather difficult one. We find that businesses with well-thought-out projects tend to do better at it, as they know their financial limitations and tech stack needed to develop a software. The key to a successful offshoring though is finding the right partner.
To make this outsourcing model work for you, you must be ready to treat it as a partnership. After all, the developers are not working for you, but rather with you. Therefore, you must hire offshore developers ready with plans on how to bridge communication gaps and ensure seamless progress of the project until completion.
Whatever offshoring model you choose – project-based or staff augmentation – evaluating skills and experience is the most crucial step of outstaffing, since it will determine the duration, the costs, and the overall success of the project.
One software development agency that strives to build a solid relationship with clients is ProCoders. Located in Estonia, the heart of the world’s offshore software development hub, ProCoders has a team of over 50 software engineers and developers who have a lot of experience working with startups on both outstaffing vs outsourcing work models.