INTRODUCTION
Offshore software developer, also known as staff augmentation, is where a company employs one or more developers in a different country than their headquarters’ office. They are regular employees in every sense of the word, the only difference is that they’re working in a different country.
The software industry is extremely saturated. Increasing amounts of competition in American and European cities means the cost of doing business is constantly increasing. A technology hub like Silicon Valley (San Francisco Bay Area) means many companies are fishing in the same ponds. Even if those ponds—cities—are filled with lots of great and talented developers, there simply aren’t enough to keep up with hiring demand. Because of this environment where the demand for developers is growing much faster than the number of qualified candidates, there has been a monumental rise in offshore software development in countries like the Philippines, India, Ukraine, and many others.
All this competition means that top developers aren’t easily found using antiquated job techniques like posting on job boards and waiting for them to come to you. Oftentimes the perfect fit for your company may not even be in your country, let alone in the city that your business resides. Over 60% of American companies have outsourced software developers, and the vast majority were satisfied with their results and overall experience.
“Demand for developers is happening
in every corner of this country, every
region, every small town in this country.”
There are over 223,000 coding jobs
currently unfilled in the United States.
According to Inc.com, there are over 223,000 unfilled coding jobs in the United States, 91% being outside of Silicon Valley. Research shows that these findings are fairly consistent in Canada and across Europe as well. This means that the competition to hire qualified software engineers is fierce no matter where your company is headquartered.
The CodingSans “State of Software Development” report adds that the biggest challenge companies face in software development is capacity. The most popular way to combat this issue is by hiring people so that these additional developers can get more things done. The problem? Hiring Talent is the second biggest challenge managers are facing right now due to the massive shortage of skilled developers. Companies are constantly expected to produce more but are being held back because of the lack of available developers in their markets.
Offshoring software development originally started in European and American companies due to this lack of local talent; however, once companies began to realize how many other great advantages there are, staff augmentation really started to become popular around the world with all sizes of organizations.
ADVANTAGES OF OFFSHORE SOFTWARE DEVELOPERS
Reducing Costs
Quartz.com reports that 46% of start-ups fail because they run out of money while still in their starting phase. The average cost of a senior developer in the United States is above $100,000 yearly. Hiring a similarly skilled developer in the Philippines, for example, is typical $55,000-60,000 yearly—and that’s even while usinga staff augmentation firm to recruit, host, and retain your developer team. That’s nearly half the cost once you account for the difference in benefits package costs, which typically run companies an additional $5,000- 15,000 a year in the United States.
The Hired.com report “State of Software Engineering” confirms that this cost of the top talent in top cities is only increasing as well, “in 2019 average salaries for the top [software] engineering roles went up by nearly 13% in London, 7% in Toronto, 7% in New York, and 6% in the San Francisco Bay Area.”
Pro tip: Hiring a freelancer that works from home or through a staffing company could also help you save additional money by eliminating overhead costs like office rent, supplies, and training resources.
International and Diversified Workforce
Forbes writes that “Nearly 95% of directors agree that diversity brings unique perspectives…while 84% believe it enhances performance.” Forbes continues, “The world is only beginning to see all of the benefits of having a widely-diversified workforce.” Hiring an offshore software development team is one of the easiest ways to have an international and diversified workforce.
Keep Your Core Team at their Core Tasks
Whether you’re supplementing your current team of developers or hiring the first members of your team, having offshore developers allows your core team members to better focus on the core tasks at hand. Offshore developers working on finishing projects or starting side projects is a great way to keep your team at headquarters focused.
Pro tip: Using long-term staffing companies rather than temp agencies or freelancers will allow you to keep your developers focused solely on the tasks that you give them, rather than other company’s projects as well. You can guide your team according to your expectations and requirements. This means you are free to tell them your particular way of doing things.
Scaling Up Quickly
Not only are recruiting, onboarding, and training costs expensive, they’re also typically very long processes due to the large demand for skilled developers. Staff augmentation firms help alleviate these burdens by hiring highly skilled workers who are typically ready to hit the ground running right away. Effective IT staff augmentation companies get your development team up and running in weeks, not months.
“We have been working hard to
get top technical talent for over
six months, but there’s just not
enough out there for the demand
that’s seen in the country.”
Less Hiring Competition
With everyone constantly fighting over the same few candidates, those candidates know they control the timeline and salary negotiations. Even after you’ve hired them, those developers will expect frequent raises since they know their own value in the market is extremely high. HRdive.com estimates that it costs employers 33% of a worker’s annual salary to hire a replacement if that worker leaves. Offshore staffing companies help prevent these headaches by hiring highly-skilled workers who are paid fairly and are dedicated to your company.
Greater Flexibility
With much lower recruiting, retention, and hiring costs, offshore software development hiring allows increased flexibility to add additional skill sets and programming languages as opposed to hiring locally. Many staff augmentation firms will even allow you to remove certain programmers from your team and add others with new skill sets. This way your company always has the skills you need while never paying for one don’t.
HRdive.com estimates that it costs employers over 33% of a worker’s annual salary to hire and train a replacement when that worker leaves.
HOW TO HIRE OFFSHORE SOFTWARE DEVELOPERS
Define the Goals
Define the business and development goals you’d like to accomplish. You know your business goals better than anybody. Write out exactly what you’re wanting to accomplish and what languages/skills you believe you’ll need to reach these goals. Once you’ve written out what your developers are going to build, define what post-development responsibilities and supports will be needed. This will help you screen for the best builders as well as the best maintainers. The more detailed the better!
Freelancers, Opening an Office, or a Firm
Determine if you’ll be using freelancers, opening your own offshore office, or utilizing a staff augmentation firm to do the recruiting/hiring for you. The overall cost, the time required, and many other factors will vary depending on which of these options you end up going with.
Pro Tip: If you decide to go with a staff augmentation company a few of these steps won’t apply to you as they’ll be doing a lot of the work for you. If that’s your plan, check out this simple 6-step process to hiring through a staff augmentation company here.
Start Recruiting
Using the goals you defined in the first step, create a job description that includes each of the following: job summary that briefly outlines in 2-3 sentences what your developer will be doing for you, bullet points with the actual day-to-day tasks, experience and/or certifications or schooling required, qualities that are not required but would help a candidate standout, and finally the perks of working for you. Once you have your job description(s) written out, start posting them on job boards and/or contactthe recruiting agency you’ll be using so they can start lining up interviews.
Pro Tip: Take your time writing the job description! The more time you put in to being as specific as possible, the better quality of candidates you’re going to end up with.
Evaluate Your Candidates
In addition to going over resumes, cover letters, and LinkedIn profiles, do a portfolio check and review previous completed projects of each candidate. Looking for candidates who have worked on similar projects will ensure that your new hire (or hires) will be able to hit the ground running as much as possible.
Pro Tip: There are many coding assessments you can have your top candidates take. This will help you to ensure they are as skilled in the languages you need as they appear to be.
Hold Interviews
Schedule your interviews, preferably video if you’re not planning to travel to interview in person. Prepare specific questions that will help you assess their problem-solving abilities, their communication skills, and their overall work ethic. Clearly defining what you’re looking for beforehand will help you keep the interview on track and more easily decide which candidates are best for your company. Once interviews are complete, perform any reference checks that you feel necessary.
Pro Tip: The Philippines is one of the favorite outsourcing destinations for companies in America, Europe, and Australia due to the high level of English fluency. So if you are from any of these places, look for offshore development services in the Philippines as a top priority.
Let the Other Candidates Know
Although it may be time consuming, you should make every effort to let the other candidates know over video or phone call rather than email. The candidate took the time to meet and talk with you for an interview so the least you can do is call or video chat and talk to them directly. If you genuinely believe there may be an opportunity in the future for some of the candidates to re-apply for a role with your company, ask if they will allow you to retain their resume and contact details. It could save you a lot of time and effort in the future, or if your newly hired employee doesn’t perform as well as expected you’ll have a great potential back-up plan.
4 TIPS TO GET THE MOST OUT OF YOUR NEW DEVELOPERS
Have Effective On-Boarding
Putting in the time and effort before their start date to make sure they have everything they need to be successful will go a long way. This will help your new employee feel confident about their decision to work for you and motivate them to work harder. As much as possible, including the reasoning behind certain processes or decisions you’ve made. It’s been proven time and time again that people perform better when they understand why they’re doing what they’re doing.
Give Clear Instructions
Take the time to double-check all of your messages and that instructions are clear, concise, and error-free. This will prove to be especially helpful if your developers have a different first language than you.
Communication & Collaboration Tools
Working on different sides of the world can be extremely challenging. Time differences can cause a 15-minute project to turn into a 3-day ordeal. Using video calling as much as possible, rather than just audio, because body language aids in communication.
Trust Your Employees
According to multiple studies, micromanaging employees is a top reason employees leave their jobs. By trusting your employees you are not only empowering them tosucceed, but you’re also giving them a reason to stay.