Offshore Developers: How Can They Give Your Business an Edge

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With the growing demand for talent in the IT industry, businesses in the US and Europe find it harder to hire developers than ever. Whether low unemployment or the lack of high-level education programs are to blame, human resources departments are raging wars for every suitable candidate.

To stay relevant, businesses started exploring additional ways to scout talent. A fair share of SMEs, as well as large-scale corporations, turned to develop and third-world countries to find skilled IT specialist. The emerging trend is known as offshore outsourcing – in this post, we’ll describe its pros and cons and how it can help your business win the talent war. You will get introduced to the tips that’ll help hire offshore developers. You can also check it here mobilunity.com/blog.

Offshore Outsourcing: Pros and Cons

Outsourcing development tasks to an offshore development team from a different country might seem risky at first. It does have cons – the pros, however, outweigh the drawbacks by numbers.

Pros of offshore outsourcing

Whether you’re an SME owner or a leader of an international company, offshore outsourcing benefits both scenarios in numerous ways.

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  • Cheaper workforce. If you’re outsourcing to Latin America, Asia, or Eastern Europe, these are all the countries with a low average cost of living. Naturally, developers have considerably lower wages there compared to the US or Western Europe. You will be able to hire a team of skilled developers at the cost of a few local specialists.
Country Entry-level developer annual salary Medium developer annual salary Senior developer annual salary
US $50k $71k $103k
Germany $40k $55k $70k
France $32k $44k $66k
Ukraine $12k $25k $59k
Philippines $4k $8k $19k
India $3k $5k $14k

A local vs offshore remote programmer salary comparison chart (data provided by PayScale)

  • Maintenance cost reduction. For SMEs, paying on a project basis is cheaper and more-risk free than sustaining a full-time in-house team. There’s no need to invest in hiring, onboarding, ranting larger office spaces, equipment, and so on. Offshore outsourcing is a way for the main office to validate risky ideas – if a project’s reception is positive, a manager can later start an in-house department.
  • A ready-to-deploy framework. All team managers know how much effort goes into designing a system that would maximize each employer’s efficiency. Reaching out to an outsourcing firm, a business owner no longer have to spend time on planning and strategizing. Offshore app developers usually have a well-established framework for small- and large-scale projects. By hiring an experienced vendor, a business owner knows what he’s signing up for – the same doesn’t always stay true for in-house teams.
  • Intelligent allocation of time and resources. By outsourcing secondary tasks, you will be able to focus on the business’ core goals. A company manager will no longer have to be a jack of all trades. Instead of managing all IT-related tasks on your own, let a professional team handle them efficiently.
  • Cultural versatility. By hiring a dedicated team from a different country, you get a fresh perspective on software developers, access new practices and know-how. International collaboration is a way for business managers to get to know new markets and adapt the final product to the preferences of the global consumer base.

Cons of Offshore Outsourcing

Offshore outsourcing firms often promote the approach as a one-size-fits-all. Despite the wide array of advantages, it brings forth, outsourcing doesn’t come without risks and challenges. Here are the obstacle business managers might face as they work with dedicated teams.

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  • Collaboration barriers. It takes a while to adjust to time zone, language, and cultural differences between the main office and the dedicated team. The good news, thanks to spell-checking and communication tools, most businesses manage to avoid miscommunication by learning how to work with offshore developers.
  • Differences in approaching project management. With an in-house team, you have a say in everything: the project management system, the corporate culture, a top-down or linear management style, and so on. Working with a dedicated team often implies putting trust in offshore software developers. For controlling managers, being unable to supervise the project is challenging at first.
  • Having to pay for each completed projects. Chances are, you will be able to discuss a different pricing model with a dedicated team – as a rule, companies have to pay for each completed project. If software development is one of the business’ main focus points, starting an in-house IT department is more reasonable than outsourcing.

Best Countries to Hire Offshore Outsourcers

Choosing a destination for offshore outsourcing is not easy. Apart from the project cost, many factors go into play: the convenience of collaboration, the quality of the talent market, and more.

Here’s an overview of best offshore developers destinations that’ll help business managers make informed choices about hiring dedicated teams.

1. Latin America

A convenient destination for US-based companies, South American outsourcers boasts one of the lowest rates worldwide. To get a better understanding of the continent’s offshore outsourcing landscape, take a look at the average software developer salaries for the most popular Latin American destinations, according to Payscale:

Country Entry-level developer salary Middle-level developer salary Senior developer salary
Colombia $7k $12k $28k
Brazil $4k $14k $32k
Chile $21k $40k $98k
Argentina $2k $9k $17k
Mexico $4k $15k $33k

 

The top pick in Latin America: Argentina. The country raises the bar in terms of college education, with an enrollment rate of 64% and is a solid choice based on developer wages. Argentina is a multilingual country – 42.3% of citizens speak English. Italian, Portuguese, and German are widely spoken here as well.

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2. Eastern Europe

Startups and companies based in the European Union look for cheap and skilled talent to the east of the region. The list of top of Eastern European outsourcing destinations includes Poland, Ukraine, Belarus, and Russia. Here’s the software developer salary comparison chart for each of these countries.

Country Entry-level developer salary Middle-level developer salary Senior-level developer salary
Poland $40k $96k $154k
Ukraine $12k $25k $59k
Belarus $12k $22k $36k
Russia $2k $15k $30k

 

Top pick: Ukraine. Thanks to its proximity to Western Europe, it’s easier to communicate with Ukrainian developers, there’s no shortage of available flights to any European countries. On the other hand, the workforce is considerably cheaper than the Polish one as the country is not a member of the European Union. In Ukraine, western and eastern (Russian and Asian) web developers outsourcing practices collide successfully, resulting in an exceptionally skilled workforce.

Asia

Asia is yet another promising offshore outsourcing destination. The region has an accolade of technological projects and advancements. The ‘Asian tigers’ are successfully absorbing the know-how provided by more successful Chinese and Japanese companies.

Here’s how much it costs to outsource a development project to an Asian company, according to Payscale.

Country Entry-level developer salary Middle-level developer salary Senior developer salary
China $5k $27k $51k
Malaysia $2k $12k $24k
Philippines $4k $8k $19k
Singapore $21k $40k $65k
Vietnam $10k $15k $51k

 

Top pick: Vietnam. It has been a popular outsourcing destination for companies in neighboring countries – China or Japan. According to BBC, the level of education in Vietnam surpasses that of the US, the UK, and most developing countries.

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How to Choose an Outsourcing Provider?

When it comes to outsourcing, choosing the right dedicated team is crucial. Breaking the tie between dozens of offshore PHP developers is not easy unless you have a defined list of criteria. These tips will help you find a dedicated team that’ll fully tailor your software development needs.

  • Define the outsourcing goals and budget. Before reaching out to teams, be clear on what the result of collaboration should be, define all constraints (time, budget, etc.).
  • Don’t look for large teams. A big team doesn’t necessarily result in a high-quality project. For small-scale tasks, it’s better to ask for a small, connected offshore web development departments. Paying for such a dedicated team will be cheaper, and you’ll get rid of long feedback loops.
  • Double-check the contract. Be especially attentive when it comes to sections that specify the payment process and security. Make sure the dedicated team fully signs off the product rights as well as all the know-how to the main office as soon as the project is complete.
  • Discuss the communication strategy beforehand. The team should work on your terms when it comes to the project management methodology, communication and task tracking toolkit, working hours, and so on. This way, you will be able to get regular status updates and know at which pace the project is moving forward.

Conclusion

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Outsourcing has been a dominant trend in IT project management lately. By looking for talent abroad, business managers save time and money. Prioritizing tasks that are crucial for the company over secondary projects (e.g., developing software for corporate management) helps increase conversion rates and keep an outstanding reputation.

If you decided to hire offshore developers, take your time to evaluate the skill of developers, assess the efficiency of the project management framework, and discuss the contract in detail. This way, your outsourcing experience will be efficient and risk-free.

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