Hiring Offshore Software Developers: When, Why, & How
Hiring Offshore Software Developers: When, Why, & How
It is no secret that the past few years have been challenging for the global economy. And the current year won’t be any better — In 2023, economic growth is projected to be almost 30% slower than expected. The ongoing recession has been affecting companies worldwide. As a result, company budgets have become tighter, leading to project cuts. In such a scenario, finding ways to save money without sacrificing quality is crucial.
Hiring offshore software developers is a smart choice if you’re looking to cut costs. It lets you minimize expenses while maximizing quality. With Purchasing Power Parity (PPP) on your side, you’ll get more bang for your buck. How to make it work? — This guide is here to answer that.
The Basics — What is Offshoring and When to Implement It?
In short, offshoring software development involves hiring a team from a different country. This practice offers flexibility to outsource software-related tasks to a global talent pool. It’s a popular choice among IT startups looking for efficient solutions.
While working with an offshore team may present challenges, the benefits often outweigh the drawbacks. So, when should you hire offshore software developers?
There’s a Local Talent Drought
As a company grows dynamically, the local talent pool may become too limited. Expanding your hiring globally can help you overcome this challenge.
You’re Being Chased by Tight Deadlines
Offshore software development teams offer high flexibility and scalability. This allows you can easily expand your operations to meet tight deadlines.
You’re Facing Complex Projects
Having access to a vast talent pool lets you source talented developers. With them, taking on complex and difficult projects becomes easier and much quicker.
You’re Looking for Dedicated Experts
When you have access to a global talent base, you can cherry-pick top-notch industry specialists for your company.
The Benefits — Why Hire Offshore Software Developers…?
There are multiple reasons – not only financial but also practical and operational.
For the cost of one US-based programmer, you can hire three software devs in Central Europe.
With three devs, productivity more than triples compared to having just one. And that’s without an increase in costs.
You hire offshore development teams based on your current needs, instead of maintaining local programmers. Thus, you avoid risky long-term commitments.
Having a flexible dev structure allows you to scale your efforts up and down. This makes your company much more adaptable.
A Vast and Experienced Talent Pool
There are around 27.7 million software devs in the world. Chances are, some of them have already worked on projects similar to yours. By offshoring your software development, you can tap into this experience.
The Challenges — What are The Common Offshoring Pitfalls?
While the above-mentioned benefits are undisputable, it’s worth remembering that there are also some hurdles.
Time Zone Difference
Depending on your offshore destination, your in-house and offshore employees might have limited working hours overlap. It’s up to you to ensure that there’s enough overlap to enable effective collaboration.
As a general rule, managing a time difference of 8 hours or less is feasible.
Lack of Face-to-Face Communication
This is a common problem in any remote working environment. However, there are ways around it. Besides, recent years have made us accustomed to it.
To alleviate this, you can simply organize regular video conferences. Additionally, invest some of the funds you saved with offshoring and fly to your team’s location to meet them and get to know them better.
Every country has its own culture. Because of this, you should expect your offshore development teams to work and communicate a bit differently than what you’re used to.
If your company is based in the US or in Western Europe, you can work around this by hiring offshore software developers from Central Europe. Doing so will ensure fewer cultural differences. And make cooperation much more streamlined.
Finding The Right Team
This is, by far, the biggest challenge associated with offshoring. However, it’s not that different from finding the right local team.
You will find a detailed step-by-step guide on how to do this later in this article.
The Destinations — From Where to Offshore?
The most popular destinations for hiring offshore software developers are South America, Asia, and Eastern/Central Europe. They all offer different benefits and challenges:
If your company is based in the US, you might find this option very appealing because of the time zone similarity. Choosing SA as your destination is also very cost-effective.
Offshoring leaders from this region are Brazil (over 400 thousand devs) and Mexico (close to 200 thousand devs).
This region seems to offer the widest range of offshoring services. At least, Asian IT professionals are the most eager to take on any type of assignment. Outsourcing your software development to Asia may be even more cost-effective than offshoring it to South America. The main downside of this region is the problematic time zone difference.
When it comes to the number of available devs, India is the real powerhouse here with close to 3 million of them.
This region has the best all-around package. Offshoring to Eastern/Central Europe is cost-effective and gives you access to top talent. This region has a culture similar to the US and Western Europe, and the time zone is manageable. The costs here are a bit higher than in Asia or South America. However, the quality of what you get in return more than makes up for it.
Poland is the local offshoring leader, with close to 300 thousand professional software developers.
The Examples — What Are The Successful Offshoring Ventures?
Not convinced that offshoring is the way to go yet? Here are some success stories to change your mind.
Atom Bank is UK’s first fully digital bank. However, it faced a shortage of hi-tech specialists in the domestic market. This, combined with Brexit, threatened to hinder Atom Bank’s dynamic growth.
To address this, Atom Bank reached out to NxTide with the task of assembling a new offshore development team of 30 developers within a year.
The outcome? — A significantly increased number of features and releases of Atom Bank’s mobile app in 2021, and ongoing international cooperation.
Prequin is a London-based investment data company. Four years ago, Prequin recognized that they had to expand their engineering capacity. Otherwise, they would not be able to deliver their planned projects successfully. In short, they faced the same problem as Atom Bank did.
To alleviate the problem, Prequin started a cooperation with an offshoring company. The aim of this partnership was to create a small offshore development team that could be expanded if the need arose.
The outcome? — Prequin was so satisfied with the offshore team’s performance that they scaled it to 50 engineers.
AirAsia is a Malaysian multinational low-cost airline. In 2018, the company pursued the transformation of its loyalty program. The aim was to turn it into a true lifestyle and travel business. They needed an intuitive and universal product that would fit the needs of their customers.
To meet their goal, AirAsia chose an offshoring partner to create a well-branded website with a simple registration process. The partner also provided a modern Loyalty Management System.
The outcome? — A successful loyalty program that led AirAsia to launch multiple different cooperations in the SEA region.
The Process — How to Start Hiring Offshore Software Developers?
Here are five essential steps you should follow when kickstarting your offshore software development team.
Step 1: Define Your Requirements
To find the best talent, you have to know exactly who you’re looking for. Here are some things you should consider before searching for offshore software developers:
•Goals – What do you need an offshore dev team for?
•Skills Needed – What experience will they need to succeed?
•Team Size – How big of a team are you looking for?
•Budget – How much are you willing to invest?
•Collaboration Model – What’s your preferred way of settling with your offshore development team?
After writing down all your requirements, prepare a detailed job description. Make sure that it’s attention-grabbing!
Step 2: Do Your Research
Now it’s time to ask around and search for potential offshore partners. You can do this in a few ways:
•Reach out to your corporate connections. Chances are, many companies from your sector have experience with offshoring.
•Head to LinkedIn. The site offers a great search feature with multiple filters. It will definitely help you find the specialists you’re looking for.
•Visit freelance portals and tech marketplaces. Skilled devs are actively looking for collaborations as well.
•Check Review Platforms. This is where companies share their experiences. Positive reviews will point you toward the best prospects.
•Contact offshore software development agencies. Why not outsource your offshoring to a trusted partner?
What you’re looking for is a flexible and cost-effective offshore development team with a proven track record.
Step 3: Approach The Best Prospects to Appoint Interviews
With your research done, it’s time to create a shortlist of candidates. Make sure they meet, or better yet, exceed all your requirements.
With that done, contact them and express your interest in a collaboration. It’s time for some HR work.
Make it a point to learn about their work culture, past experiences, and expertise during the interviews.
Step 4: Choose The Best Prospects
After the interviews are over, refer to your notes and pick the best candidates. Make sure everything about them is aligned with your requirements!
Step 5: Sign The Contract
It’s finally time to kick off the collaboration. Sign a legally binding contract with your chosen prospects. Not sure what to include? We’ve got you covered with a free template!
At this point, you should also discuss with your new partner what project management tool would be optimal for your mutual needs.
The NxTide — Your Future Offshore Software Development Partner?
At NxTide, we create nearshore and offshore software development centers.
Looking for a full-product development partner? We’ve got you covered. Need a group of engineers? We can help. Want to establish your IT department in Poland? Trust us, we’ve got your back!
What Makes NxTide Stand Out?
Right from the start, you’ll be informed of the salary of each and every employee, along with our profit margin.
Professional Representation of Your Brand
We know how to do your brand justice in the local employment market. And we know exactly how to promote it.
Proven Engagement Model
We use a Build-Operate-Transfer model, which allows us to attract and acquire the best prospects.
Every specialist hired through NxTide knows they can join the client directly. We test the waters for the first three months to ensure a good fit. After that period, employment transfer is possible.
The FAQ — Still Looking For Answers?
Having more questions? Send them to us and we’ll add the answers down below.
How much does an offshore developer cost?
An offshore developer can cost anywhere between $25-$100 per hour. Here are the average hourly rates for the most popular offshoring destinations:
•Eastern Europe: $55-$95
•South America: $60-$100
•Asia (India Philippines): $50-$70
We also have a comprehensive guide on this topic.
How do I hire an offshore development team?
Here are five proven steps you should take to do it:
•Step 1: Define Your Requirements
•Step 2: Do Your Research
•Step 3: Approach The Best Prospects to Appoint Interviews
•Step 4: Choose The Best Prospects
•Step 5: Sign The Contract
How do I hire an offshore developer for startups?
If you’re looking for a single developer, Freelancing Platforms are your best bet. The most popular of them are Upwork, Fiverr, Arc, and Toptal.
Where to find an offshore development team?
There are multiple places where you can look for one:
•LinkedIn – specialists from around the world look for contracts there
•Freelance Portals and Tech Marketplaces – developers regularly advertise on such portals
•Review Platforms – contact devs with multiple positive reviews
•Offshore Software Development Companies – firms, such as NxTide can help you build your offshore development team
What are the benefits of hiring an offshore development company?
•High Cost-Effectiveness – average salary rates in Central and Eastern Europe are visibly lower than in the US or Western Europe
•High Productivity – you can hire more devs for the same price
•High Flexibility – you can avoid long-term commitments with a task-based approach to contracts
•Easy Scalability – you can scale your offshore development team up and down, depending on your needs
•Access to a Vast and Experienced Talent Pool – there are literally tens of millions of software developers in the world
In today’s harsh business environment, offshoring software development can make your company thrive. With it, you gain great scalability and flexibility. You save costs while increasing development speed. And you tap into the best international talent out there.
If you’re seeking a trusted offshoring partner, please contact NxTide via this form. Let’s discuss your specific needs and goals. We look forward to collaborating with you! Together, we will build a world-class offshore development team.
We're ready to discuss a project with you
IT Outsourcing, Offshoring & Nearshoring in Poland
All rights reserved by
Pragmatic Coders Sp. z o. o.
Aleja 29 Listopada 20 31-401 Kraków Poland