Hire offshore developers: when, why, and how

Despite significant headwinds in recent years, such as the global recession affecting company budgets and leading to project cuts, 2024 presents a cautiously optimistic outlook compared to the previous year. In this cost-conscious environment, where maximizing value is paramount, offshore software development emerges as a compelling option to minimize expenses while preserving quality. By working with offshore developers, you can stretch your budget further and achieve greater value. This guide delves into the “how to” of making it work for you.

The Basics — What is offshoring, and when to hire offshore developers?

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 cost-efficient, skilled developers.

While working with an offshore development partner may present challenges, the benefits often outweigh the drawbacks. So, when should you hire an offshore team of software engineers?

There’s a local talent drought

As your company grows dynamically, the local pool of developers for hire might begin to seem too limited. There may come a time when hiring more devs to your in-house team simply becomes too costly and time-consuming. Expanding your hiring globally can help you navigate this challenge.

You’re being chased by tight deadlines

Relying on the development services of an internal team limits your options. Offshore software teams offer a higher flexibility and scalability for the product development process. This allows you to easily speed up the development process 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 development projects.

The Benefits — why hire offshore software developers…?

There are multiple reasons for hiring an offshore development team. Not only financial but also practical and operational. Some of the biggest benefits of hiring offshore developers include:

High cost-effectiveness

For the cost of one US-based programmer, you can hire three dedicated developers in Central Europe. This is possible due to lower cost of living, average wages, and operational expenses in the region.

High productivity

With three devs, productivity more than triples compared to having just one. And that’s without an increase in development costs.

High flexibility

You hire dedicated offshore development teams based on your current needs, instead of maintaining local programmers. Thus, you avoid risky long-term commitments.

Easy scalability

Having a flexible dev structure allows you to scale your efforts up and down. This makes your company much more adaptable. You can easily hire a new team of developers if the need arises.

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. The biggest challenges of hiring offshore developers are:

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 with your remote development team. Additionally, you could invest some of the funds you saved with offshoring and fly to your remote team’s location to meet them and get to know them better.

Cultural differences

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. To minimize misunderstandings, it’s advisable to consider hiring offshore developers with a cultural background similar to that of your country.

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 hire dedicated offshore developers later in this article.

The Destinations — where to find offshore developers for your business?

The most popular destinations for hiring offshore software developers are South America, Asia, and Eastern/Central Europe. They all offer different benefits and challenges:

South America

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).

Asia

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 downsides of this region include the problematic time zone difference and culture.

When it comes to the number of available devs, India is the real powerhouse here with close to 3 million of them.

Eastern/Central Europe

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. If you’re after high-quality software development services, choose this region.

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

Atom Bank is the 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 Pragmatic Coders with the task of assembling a new team of offshore developers, counting 30 specialists, within a year.

The outcome? — A streamlined app development and a significantly increased number of features and releases of Atom’s mobile application in the following years, and ongoing international cooperation.

Prequin

Prequin is a London-based investment data company. In 2019, 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. This partnership aimed 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

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. Following this detailed hiring process will help you find developers with the best credentials.

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 hiring offshore software developers. Defining them should help you hire a perfect offshore development team.

•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 reputable offshore development companies. 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 the candidates’ work culture, past experiences, and expertise during the interviews.

Step 4: choose the best offshore developers

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?  Don’t worry, you can just use this free Build Operate Transfer Contract Template!

At this point, you should also discuss with your new partner what project management tool would be optimal for your mutual needs.

Pragmatic Coders — your future offshore software development team?

At Pragmatic Coders, we know how to create nearshore and offshore software development centers.

Looking for a 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 Pragmatic Coders’ offshoring offer stand out?

Full transparency

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 the Build-Operate-Transfer model, which allows us to attract and acquire the best prospects.

Employee transfer

Every specialist hired through Pragmatic Coders knows they can join the client directly. We test the waters for the first three months to ensure a good fit. After that period, any team member can transfer to you.

What is the Build-Operate-Transfer (BOT) model in offshoring?