To Hire or Not to Hire: In-house vs.

Offshore/Nearshore Development

// 2

We understand the fears and objections regarding outsourcing your software.

You’d be putting your product into the hands of people you won’t get to see every day. You have to answer to your investor, your co-founder. Tough decision to make. So, to hire or not to hire?

// 3

It is better to hire an in-house dev if...

the hired candidate is a better value for

money

... pretty hard though if you’re in Silicon Valley and dev salaries are

through the roof.

you have the time & skills to recruit the right

person

... you might just be lucky and find that perfect

person: with proficiency in the technologies you need

& a cultural fit. But HR issues are no trifling

matter: this can happen if you know exactly what you

want.

you want an employee ‘tied’ to the company

... you can’t offer equity to an outsourced team - but a salary plus shares at a lower price might be a good offer to a local

developer that will be more invested in the

company.

// 4

However, you have to keep in mind that there are a number of drawbacks to hiring someone full time.

We’ll be contrasting those drawbacks with what an offshore or nearshore team can do instead, based on our experience and conversations with international clients.

Let’s take a look.

#1

The hire you’re looking for is probably more

expensive.

// 6

A team of outsourced developers is better bang for the buck than - for example - developers in London or San Francisco, even if they’re freelancers. Simple as that.

The hire you’re looking for is probably more expensive.

// 7source: Alty Software market research

Average software development hourly rates on a global scale

#2

A hire is a fixed cost.

// 9

Even if you’re funded, fixed costs can be a challenge if your revenues are fluctuating. That will frequently be the case if you’re a smaller business.

Costs add up with the necessity to keep payroll or maintain office space. Overheads can go beyond the developers’ basic salaries.

Think health insurance, for instance.

#3

A hire needs something to do.

// 11

What if there’s currently nothing to be done? Still have to pay him/her. You might have a task that’s not entirely full time. Can you afford to hire a skilled person for a part time position?

A hire needs something to do.

// 12

What you pay outsourced employees is based on output. That’s why we prefer time & material contracts. You can always add employees later if you’re comfortable. But if you’re focused on growth, it might make more sense to cut costs at this point.

#3A hire needs something

to do.

#4

A local hire is not necessarily a better

programmer.

// 14

Just some info from our part of the world. Polish developers are leading the way at international coding competitions:

TopCoder, Google Code Jam and Facebook Hacker Cup, Capture the Flag (CTF), Microsoft Imagine Cup, ACM International Collegiate Programming Contest

… and have been crowned ‘the first coding world champions’ in Helsinki (2014).

A local hire is not necessarily a better programmer.

// 15

In their ranking of developers, HackerRank put Poland in the top 3. Polish programmers dominated mostly the challenges connected with Java (1st place), Algorithms (2nd place) and Python (2nd place).source:

HackerRank

#4A local hire is not necessarily a better

programmer.

#5

A hire is not necessarily a better

team member.

// 17

Great team members are those who know what good communication is about. And we understand that there might be doubts if the language barrier is going to be an issue.

All IT professionals work in companies where English is the default language of communication. In other words, English language proficiency is a standard, and prospective employees are always tested for their language skills.

A hire is not necessarily a better team member.

// 18

An important sidenote: Poland is in the VERY HIGH bracket in the Workforce English Proficiency rating.

Pretty neat.

(source: Harvard Business Review)

#6

A hire isn’t the only answer if you want

availability.

// 20

A good outsourced employee doesn’t hammer away silently in seclusion. It’s best to find a partner with proven experience in cooperation with existing teams.

A hire isn’t the only answer if you want availability.

// 21

Look for companies that emphasize good practices in contact with the client. That type of communication can give you the feel of a hire without the need to pay for what you don’t want.

#7

Both an outsourced and hired employee

can be under the same regulations.

// 23

We get it, the last point was more valuable for those involved in US projects. But if your country is an European Union member (Brexit will take a while, not to worry), there’s another thing on your side.

Both an outsourced and hired employee can be under the same regulations.

// 24

With Central or Eastern European developers, the law, the regulations, the standards all have the EU stamp on them. No need to navigate the court and contract system of, for instance, Russia or India.

// 25

Let’s say you might want to give outsourced services a try. What’s the next step,

then?

// 26

Communication

Working methods

Technologies

Experience

Transparency

There are 5 issues that must be discussed before you start any partnership with an

offshore team or software house.

// 27

This seems obvious, but remember that it’s not only the issue of communicating with your software partner’s representatives, but also the entire hired team. It’s good to check in advance if the company allows for direct contact with the developers and if they speak the client’s language.

Communication

// 28

Does the potential partner use software development methodology that’s familiar to the client, or at least popular in the client’s country? Also, it’s worth knowing whether the potential partner is ready to have their developers work in the client’s head office for a period of time.

Working methods

// 29

Naturally, it’s hard to associate a country with a particular technology, but it is worth checking if certain solutions suggested by the partner aren’t just a little bit too unusual. A good partner should propose the technology that will maximize the effects of your solution.

Technologies

// 30

A history of long-term co-operation with clients from various countries is evidence of:The agility of the contractor,Trust: if so many clients have placed their confidence in the contractor, it’s got to mean something

Experience: knowledge gained from many different markets

Experience and long-term partnerships

// 31

This must be approached from a few angles:Does the partner familiarize the client with the processes and method of work?

Does the partner supply the CVs of people assigned to the project?

Does the partner supply the tools for an ongoing progress assessment and project calculations?

Does the partner guarantee that the collaboration can be tested before any major decisions are made?

Transparency

// 32

Additional advantages of outsourced employment:

Long-term & short-term

Offshore/nearshore services don’t have to end with just one task

or project. Good software houses can

build great relationships that last

for years.

KnowledgeCooperation with an

experienced software house gives you more than just devs. They

can take a fresh look at your technology and offer better solutions.

Specialized skillsWhat’s the point of hiring

in-house if you want a very particular task

done? Unless it’s a core differentiator, that kind of hire might be expensive and pointless in the long

run.

// 33

A good remote developer is better than a bad local developer.

A great remote developer is better than a good local developer.

A top developer is a top developer regardless of where they are.

A few last things worth remembering.

// 34

Want to chat about this?We’d love your feedback!

espeo.eu

Poznań // Helsinki // San Francisco