The trend of outsourcing developers is booming across the globe. The demand for hiring offshore developers is increasing on a daily basis.
According to Statista, the IT Outsourcing market is expected to generate US$460.10 billion in revenue by 2023.
But why is it actually happening? Well for starters, it’s affordable to hire offshore developers.
Secondly, it allows access to a wider pool of talent. Apart from these two, there are a number of other benefits that you can gain from hiring offshore developers.
Let's discuss each advantage in more detail.
Benefits of hiring offshore developers for your startup
You might be wondering, why companies favour outsourcing so much? Below are a few of the reasons which would answer that question.
Cost-efficient
Cost is one of the major startup killers. According to a report by Quartz, around 90% of startups fail and one of the main reasons for that is, they run out of money.
However, if startups hire offshore development teams then a lot of money can be saved. It’s because when you outsource, you don’t have to pay for overhead costs like payroll, office rent, vacations, insurance benefits, recruitment fees, etc.
Note: Hiring a dedicated offshore development team from countries such as India can save you 30% to 50% or more on development costs.
Instead, you can divert that entire fund towards the creation of an MVP. Not only that but also the rates of developers in the offshore countries are lower than that of the US and Western Europe due to the lower cost of living.
Reduce development time and increase productivity
Hiring an offshore development team saves not only time but also increases overall productivity. Time is a crucial factor here, as startups are born in a cut-throat competition setting.
With a dedicated development team in place, you don’t have to invest time on project management routines or with other HR activities like employee retention, as all of it will be taken care by the vendor company.
You also save time on training new employees as every outsourced employee already possesses the required skills. This helps you to focus only on your work as everything else is already taken care of, which ultimately increases the productivity of your business.
Get access to a larger pool of talent
One of the major advantages of outsourcing is that it gives you access to a larger pool of talent. According to Statista, the global developer population is expected to reach 28.7 million by 2024, a 3.2 million increase from the year 2020.
Despite the fact that the number of developers is growing, it’s difficult to find developers of good quality in countries like the US and Western Europe. It’s because the tech giants have already employed the best lot of developers where they receive benefits, enormous packages, attractive perks, job security, and a sense of comfort.
Note: By 2023, India will outnumber the United States with 5.2 million software developers
Whereas, working in a startup implies risks. However, with outsourcing, you can hire an extremely skilled and capable developer from Asia and Eastern Europe who would be more than happy to join a startup.
Flexibility
Flexibility is a big concern when it comes to the in-house team. It’s due to the difficulty that the company faces in scaling their team and making changes in the technology stack to conform to the project scope and stage.
On the other hand, such changes are common in any startup environment. Outsourcing developers can be easily moved between the projects and are extremely flexible especially when you collaborate with them through web development agency.
Outsourcing Developers: Where to Start?
Before outsourcing developers for your startup, consider the following things:
Define your business goals clearly
The first step is to clearly identify the set of problems that you’re looking to resolve with the help of your initial MVP. This is important as you have to explain those problems while you outsource developers. You must determine the prime objective of your product. You can also break it down into smaller and measurable milestones along with setting deadlines for each milestone.
Evaluate the skill set required for the project
After defining the business goals, the next step is to identify expertise, technology stack, and the skills that you would need for the project. You must also define the roles that you need for the projects like do you only need developers, QAs, business analysts, and PMs.
Plan your budget
Budget is the most crucial component as it decides a startup’s fate. So, you must be extremely cautious in planning it. First, you must define the initial size of your initial capital.
Moreover, you must define the areas that can save you a big chunk of money. Once you are done with it, find the investors to whom you would show your MVP beforehand.
Outsourcing Developers: Where to look?
There are several offshore countries that you can choose from; each of them has its own challenges and advantages. You must try to shortlist countries that are closer to your time zone and culture; however, you must also consider developers who offer you the best deal in terms of price and quality ratio.
Let’s have a look at various geographies for outsourcing development teams.
Eastern Europe
Eastern Europe has earned a reputation as a reliable IT outsourcing destination due to its cost-effectiveness, growing talent pool, and rapidly evolving IT industry. Czech Republic, Ukraine, Bulgaria, Estonia, Hungary, Belarus Latvia, Moldova, and Romania Poland are some of the top Eastern European outsourcing destinations.
This region has more than 1.3 million developers, with their hourly costs varying between $30 to $69. Poland and Ukraine have the most professional developers in the Eastern Europe region, with 400K and 200K, respectively.
If we talk about the offshore development rates, then Ukraine offers development as low as $30 to $60 and Poland charges around $45 to $69 per hour.
Latin America
Mexico, Brazil, and Argentina are the best options for the outsourcing of professional developers in this region.
However, Chile and Colombia have also shown good growth in the market by claiming the 27th spot in the HackerRank rating of the most skilled professional developers in the world.
When it comes to outsourcing rates, Brazil offers services for as low as $42 to $65 per hour, while Uruguay charges around $45 to $69 per hour.
Asia
Asia has almost 4 million software developers. India, China, and the Philippines are the leading countries with the most number of developers. India leads at the front with 2.75 million developers, followed by China and the Philippines with 590K and 190K developers respectively. If you outsource developers from India, it typically costs between $20 and $40 per hour. Meanwhile, in China, outsourcing developers tend to be priced in the range of $30 to $50 per hour.
Checklist on how to hire developers for a startup
To make your job easy, we have made a checklist of your hiring process. This checklist will help you to identify the signs of a perfect offshore team for your startup.
Lookup for their proven track record
Find out the developers’ or team’s proven track record by looking up at their rankings on websites like Clutch or by checking their LinkedIn profile to check out their previous clients. You may also contact their previous clients and ask if they would recommend that developer or a team.
Ensure that you have access to the latest code
In the worst-case scenario, the developer may refuse to release the code due to a personal conflict. To avoid such a situation, it’s recommended to have access to the code. It must be one of the prerequisites for any developer’s or team’s participation in your project. Moreover, you must be the admin of all the accounts viz. clouds, Github, TFS, and other platforms.
Ask for outsourcing company’s workflow
It’s imperative to ask for the outsourcing company’s workflow. You can find out how they interact with their clients or allocate their resources for the projects. You can also ask as to how flexible they are, i.e. if they can increase the number of resources while the project is going on. There’s a possibility that the company’s workflow might not suit your needs. Hence, it’s important that you find it out before hiring the team.
Reject the cheapest quotes
Your focus should be on the cost-efficient rates instead of cheap quotes. If you decide to go with cheap rates, then you might end up paying a massive amount of money at the end of the project as you have to rewrite the poorly written codes again.
Refrain from fixed-price payment models
You must stay away from the fixed price payment model as it includes a minimum of 25% of additional costs for covering the risks. Instead of a fixed price payment, you must go for the time & material model as it allows greater flexibility for your project.
You’ll know exactly what you will be paying for. Moreover, you won’t need to negotiate for every small change. There are some offshore companies working under the fixed-price model who charge extra for uncertainties. And as you all know that startups are full of uncertainties, so the fixed price model becomes a bad choice for any startups.
Read more: Which engagement model you must choose?
Determine if the team agrees with all your offerings or prefers to argue
If the developers or a team of developers claim that they can literally fulfil all your requirements then it’s a red flag. Any company coming forward with such claims only means that they haven’t studied your requirements well enough to know if they have the required resources and skill set available. All the offshore development companies specialize in various types of skill sets. So, none of them can do everything without making a few adjustments.
Find a good project management tool
Nowadays, you can’t simply rely on exchanging lengthy emails. You must use advanced and modern project management, collaboration, and tracking tools like Trello, Slack, Jira, etc. These tools help you track the tasks and progress of your team, leave comments, lead discussions, and many more.
Be proactive
It’s very important for a startup founder to be proactive, especially when working with an offshore development team. You can try to be ahead of the next day’s task, this works especially when your team working and you’re asleep. This will give you the confidence that everything is going the way you wanted.
Request for frequent deployment
Request your developers to show the demo of the MVP for each sprint’s end, typically on a weekly or bi-weekly basis.
Conclusion
In this article, we discussed various aspects of hiring an offshore development team and came to know why it’s the best choice for a tech startup. This approach helps the startup owners to save their time and funds while getting an MVP of top-notch quality.
In this article, we first discussed why you need to hire an offshore development team. After that, we also discussed about various geographies, regions, and countries that offer cost-efficient and quality, offshore development teams. After that, we discussed the things which you must keep in mind while hiring or outsourcing developers.
If you’re also a startup owner and are looking to hire an offshore development team then ThinkODC is the best choice for you. They have a large pool of talented and skilled developers, QAs, PMs, and business analysts that can fulfil all your offshore development requirements.
So, if you’re looking for offshore development, then choose ThinkODC for timely fulfilment of goals, scalability, seamless communication, 24×7 support, etc.
