There’s no doubt that the software companies of today invest a significant amount of time, capital, and effort, just to stay at the top of their game and get ahead of competition. But, the industry is becoming incredibly saturated, and to stand out from the crowd, there’s no choice but to bring innovative and powerful solutions to the market.
And that’s easier said than done. With a huge talent shortage, especially in the West, sky-high salaries, and the inability to scale quickly, most businesses are stuck with unreliable development and low-quality output.
In such a scenario, is it wise to only hire local in-house talent, or is building a dedicated development team in another country a more lucrative and beneficial option? Let’s explore.
1. How much does it cost?
In-house local teams
Did you know that software engineers are one of the most highly-paid professionals in the world today? In the US and Western Europe, for instance, hiring local talent guarantees significant outlays. It’s almost an understood agreement that if you want to hire the best software engineers, you need to pay a premium. But their salary is only the tip of the iceberg. There are still so many costs — office space, hardware and software equipment, recruitment fees, employee-centric benefits such as insurance and travel allowance — the list goes on and on.
Building a dedicated team offshore
Let’s talk about salaries. The cost of hey in emerging tech nations such as India, Ukraine, or the Philippines is significantly lower than the West. Why is that important? Because it directly correlates with salary. Lower cost of living means a higher disposable income, which, in turn, means lower salaries for the same expertise you get back at home.
And all those other expenses like employee benefits, recruitment, and office spaces? Drops in the ocean compared to what you pay at home.
2. Can you access talent from anywhere in the world?
In-house local teams
When you’re on a hiring spree, it’s usually because you’re scaling up, and you require some extra internal capacity. And if you’re a software development company looking for expert developers, then you’re in for a rough road. In fact, recruitment is one of the most common reasons why businesses look offshore.
Why?
We’ve already talked about expensive salaries. To top it off, recruiter fees average between 20 to 35% of your new employee’s annual salary, if not more! And the primary reason why recruiters charge so much is that they simply can’t find the talent that you need.
Even in major cities like London and Paris, you’re probably going to end up paying $60–100 per hour for a full-time employee, which is probably far above the resources of your company. The problem is that engineers are a scarce commodity, which makes them powerful. If you’re not offering the most lucrative agreement and the most exciting work, they have no reason to work for you.
Dedicated offshore teams
The abundance of extremely well-trained developers in countries like India, for instance, is truly mind-boggling. India produces 1.5 million engineers every year — 1.5 talented, English-speaking, analytical-thinking engineers (check the article about top software development countries hey). By hiring these engineers, you get access to a well-balanced, proactive team of developers who can take command of their projects and fit perfectly well into your business model.
So can a dedicated offshore team really work for your business?
Absolutely. It isn’t uncommon to think that working with an in-house local team is the most perfect and ideal scenario. After all, everyone is within shouting distance, and you can always ambush them at their desk if you need to get work done.
However, with the acute talent shortage, sky-high pricing, and the inability to scale your business, the ideal scenario is definitely out the window. By building a dedicated team offshore, you get to work with talented industry experts who are a fully integrated extension of your in-house team. Your work culture, your rules, and your ethos — at the end of the day, it’s still your team. And that’s all that matters.
All said and done, if you are considering building a dedicated team offshore, keep in mind that partnering with the right offshore company can be a game-changer. Your offshore partner is the most important factor in determining the success of your move.
