Offshore development is a well-established practice in the modern IT industry. It enables companies of any size, be it budding startups or established enterprises, to attract top talent from all over the world, gaining equal footing with tech giants like Google, Facebook, and Microsoft.
Hiring offshore developers allows businesses to delegate software production activities, such as product design, coding, testing, maintenance, management, and tech support to seasoned IT specialists based in a remote location. It also aids in assembling a high-performance team in the shortest possible time. This ultimately accelerates the development process and reduces product time-to-market, allowing businesses to stay ahead of the competition.
Continue reading to learn more about offshore development practices and how to find the best team to bring your innovations to life.
Sourcing Developers Overseas: What Companies Look For
Depending on their size, existing workforce, infrastructure, budget, and global coverage, different companies will have their own unique rationale behind the decision to work with overseas contractors. Below are some common considerations for large enterprises, medium-sized businesses, and startups.
Top Reasons for Hiring Offshore Developers
When enterprises opt for offshore development, they typically look for several key factors:
- High-quality software solutions. The stakes have never been higher for digital transformation and agile business growth. That’s why enterprises are looking for offshore development partners that can support them on the path to sustainable tech innovation, through early adoption of new technologies, providing new capabilities, and accelerating implementation using world-class engineers.
- Versatile expertise. Offshore developers typically have diverse expertise, enabling them to swiftly adopt new technologies and deliver the project according to the industry best practices.
- Access to foreign markets. The ultimate goal of every innovative business is to yield constant annual growth and take their operations across the local scene. To make it happen, companies have to explore new markets. Hiring offshore developers fosters the enterprise’s local market presence, offers more precise insights into the business culture in that region, and reduces barriers to entry.
For many small and medium-sized enterprises (SMEs) the rationale behind going remote stems from the need to find good offshore developers with extensive experience in various industries at a reasonable price.
- Larger tech stack. Offshore development can provide SMEs with exposure to new technologies, tools, and innovation. They might also have some previous experience in the field the company operates in, which can help to speed up the development process.
- Focus on core competencies. SMEs often have limited resources and need to focus on their key business activities. By outsourcing development work offshore, medium-sized companies can offload non-core tasks and concentrate on strategic initiatives, business development, and customer acquisition.
- Cost optimization. Hiring an internal team requires significant investments in office rent, working infrastructure, and legal expenses, as well as health insurance, retirement savings plans, and vacation reimbursement for employees. Combining these costs, many SMEs find it more financially worthwhile to outsource their tech-related activities.
Startups often experience rapid growth and changing requirements. Therefore, the main factors that their founders take into account when opting for offshore development are those that help the business thrive in a highly competitive environment.
- Faster time to market. Startups often have a strong sense of urgency to bring their products or services to the market quickly. The offshore development team can help startups accelerate their time-to-market by leveraging the expertise and efficiency of the in-house tech unit.
- Innovation and fresh perspectives. Engaging with offshore developers can bring fresh perspectives and help them bring their innovative ideas to life. Remote engineers may have different experiences, cultural backgrounds, and approaches to problem-solving, which can foster creativity and provide valuable insights.
- Quick setup. The Silicon Valley ecosystem is buzzing with newcomers, and startups have to be imaginative to win the race for talent. To stay in the game, startups either need to hire accomplished HR specialists, or try to source their tech workforce overseas, building a reliable pipeline of essential talent.
Benefits of Hiring Remote Software Developers
Despite being the most valuable asset for any digital-native business, skilled software engineers are hard to find. Outsourcing allows companies to look beyond borders on their quest for the best tech talent to streamline the product development cycle, and gain a competitive edge over their rivals.
Hiring offshore software developers is the right fit for companies that want to quickly extend their existing tech capabilities and scout other locations apart from the United States and Western Europe. Such a move enables businesses to yield numerous benefits.
Closing The Talent Gap
Many Western companies explore foreign IT markets because of the dramatic shortfall of experienced developers back home. The talent shortage in the US alone is projected to exceed 1.2M by 2026. Thus, in the coming years, outsourcing will become a matter of necessity rather than choice.
This is especially true for startups and SMEs that can’t always afford traditional measures to find, attract and retain high-skilled employees locally. The offshore development market provides access to a wider range of qualified tech staff based in different locations worldwide.
Scaling Up and Down at Ease
Fast-growing organizations need to constantly upgrade their services, customer target, business model, and talent pool. This implies being able to change the tech stack, arrange skills augmentation for specialized tasks, and shuffle the developers for different project requirements. Such flexibility is impossible to attain unless you can add or remove programmers from the team. Scaling your internal development unit can be a challenging task, but when you hire offshore software developers, this issue is off the table.
Outsourcing allows you to jump-start the development process. Instead of spending time on employee training and team bonding, you get a ready-to-go team with prior software development experience in the required field. You can also source individual experts, who can fill the gap in the company’s tech expertise, and complement the existing engineering team.
Mitigating Budget Risks
Financial issues are often cited as one of the top reasons for some of the most promising businesses to fail. You have to be very cautious about your budget to escape such a fate. Remember, every change you make, from expanding the product range to launching a new advertising campaign or entering a different market, should be backed by secure funding.
If you decide to outsource software development you will automatically have more capital in your hands to spend on things that assist your business growth. In this case, you don’t have to invest resources in purchasing infrastructure, building a comfortable workspace, office rent, HR, and other administrative activities. Moreover, outsourcing enables you to hire offshore developers at a fraction of the cost of assembling an in-house team.
A rewarding growth strategy relies not only on adding new resources, such as finances, manpower, and technology, but also on streamlining the company’s activities. This entails focusing on core business functions, and delegating minor assignments and supporting processes to external service providers. It enables you to prioritize value-added tasks and free your IT unit from mundane work. This way, your project team will have more time to do what you hired them to do.
How to Hire Offshore Software Developers
Finding offshore developers to build high-quality software solutions sometimes requires dealing with red tape, geographic limitations, budget restrictions, and lengthy recruitment and onboarding processes. To make this process easier for you, we created a step-by-step roadmap that can help you navigate this journey.
✔Establish the Budget
Hiring a software development team costs a lot more than just paying salaries. The total reimbursement package can total up to 1.25 to 1.4 times the employee’s wage. That’s why it’s important to plan your expenses, including the cost of infrastructure, developers’ salaries, and operating expenditures in advance.
✔Choose the Outsourcing Destination
Check information about top-ranking offshore development countries to see which one would be the best fit in terms of geographic proximity and cultural differences.
✔Define Your Collaboration Model
Depending on the scope of your budget, and knowledge of remote management tools, you can either hire freelancers, partner with an outsourcing company, or open your own R&D center.
✔Shortlist Potential Candidates
Sift through the resumes and portfolios of preferred applicants to try and find IT professionals with the set of tech skills that would best fit your project scope.
✔Test the Prospect’s Expertise
No matter if you choose to work with individual contractors, software development agencies, or local consultants, always check if they have a proven track record. Conduct interviews with developers, ask questions about their workflow, test their technical abilities, and contact their previous clients if possible.
✔Sign the Contract
A clear business agreement is the foundation of prosperous, long-term cooperation. It must cover data protection rules, warranty clauses, software requirement specifications, and a section on the latest code ownership. You should also insist on signing a statement of work and a non-disclosure agreement to avoid data leakage.
✔Meet Your Remote Team
Initiate a welcome call to get acquainted with your engineers or visit them in person to build trust and facilitate team bonding.
Top Destinations to Hire Offshore Developers
Selecting the right outsourcing location is one of the top concerns of tech startups that want to hire remote offshore developers. You can find great IT professionals anywhere if you keep an open mind and see that what people do elsewhere in the world isn’t much different from what you are used to at home.
Top Regions to Hire Offshore Developers
There is a great range of offshore destinations that boast a developed market with advanced infrastructure, accomplished tech companies, and a favorable legal environment. The leading regions in offshore development services so far are Eastern Europe, Latin America and Asia. Apart from evident perks, such as a reasonable price-quality ratio and vast talent pool, each location has other characteristics you can benefit from.
Businesses that decide on outsourcing to Eastern Europe are often delighted to discover the wealth of technical talent, and the availability of first-rate, innovation-oriented engineers.
- The most popular IT hubs in Eastern Europe are Ukraine, Poland, and Romania.
- The software development market in the region grows five times faster than the global average.
- There are 470+ world-renowned IT service providers in CEE that collectively generate $5B in annual revenue.
- The region is home to more than 1 million skilled developers, specializing in e-commerce, fintech, education, healthcare, and telecom sectors.
- The main clients of Eastern European vendors come from the United States and EU countries.
Latin American countries have actively strived to establish themselves as prominent IT hubs by investing in and enhancing their technological infrastructure, promoting computer education, offering incentives for business, and supporting startup activities.
- Brazil, Mexico, Colombia, and Chile are among the top 25 business-friendly countries according to the Kearney Global Services Location Index.
- Argentina and Brazil have a lead in the number of programmers in the region.
- Local tech hubs are popular outsourcing destinations for North American IT companies, as most of the time they are located within the same time zone.
- Latin America ranks high in terms of the number of fully remote companies, with employees 1.8 times more likely to be working remotely compared to the global average.
Asia maintains a strong presence on the global stage, serving as home to not only some of the biggest offshore software development service providers but also over 10 million offshore developers.
- Asia accounts for the biggest number of prominent offshore development destinations, including India, China, the Philippines, Vietnam and Indonesia.
- India is the largest developer population center worldwide, with 5 million employees in the IT and outsourcing industry.
- STEM disciplines are the key focus areas in schools and universities, which in China alone amounts to 4.7 million IT experts joining the labor market every year.
- Due to the rising number of partnerships between businesses and tech service providers, Asia is expected to become the fastest-growing IT outsourcing market in the next six years.
Best Practices to Hire Offshore Developers
Assembling the team is the first step to ensuring quick product time to market. Hiring skilled developers with the right technical expertise is a challenging and time-consuming task. Usually, there are just not enough high-quality software developers locally to do it on an ad hoc basis.
Models of Cooperation with Remote Software Developers
Without a dedicated team that has all the required technical abilities, you will likely find your IT project progressively heading in the wrong direction. To avoid this, you can follow one of the three main routes to hiring offshore developers for a startup:
- working with freelancers;
- partnering with an offshore development company;
- opening your own remote development center.
Browse Freelance Platforms
Freelance platforms are a rich source of potential candidates for remote-first companies. Such platforms allow you to reach overseas IT professionals otherwise unavailable. The best services to find seasoned tech talents are Upwork, Gure, and Toptal.
This freelance marketplace is one of the best-known resources to find remote specialists. There is a vast pool of developers with diverse expertise, tech stack and job history for you to choose from. You can even use Upwork to build a cross-functional team, as it is a good place to find designers, QA engineers, business analysts, marketing specialists, and a manager to oversee the whole project.
The platform features exhaustive user profiles, which include information about the contractor’s skills, previous work experience, and hourly rates. You can also check their portfolio, reviews from former clients, and overall job success ratings.
Upwork has built-in employee monitoring tools. With automatic time tracking and screenshot features, you will always know what your remote engineers are working on and how much time they spend on each task. It could prove useful if you agreed to a time and materials model, and your offshore developers charge you an hourly rate for everything they do.
On the downside, you will have to shell out 23% of the rate you pay the freelance programmer for handling the administrative and financial side of the project. Plus, the platform is not suitable for hiring a dedicated team, since all the contractors have their individual accounts. This means you have to hunt each member of the crew separately, which can cause additional frustrations once the team starts working together.
This website is the first choice for nearly 800,000 companies worldwide to search for talented remote professionals. Joining this platform will provide you with access to 175K+ specialists engaged in programming and development fields.
The platform offers a convenient way to post a project description and quotes from top freelancers. You can identify your perfect candidates by narrowing your search to a certain location, budget, number of previous employers, and invoices paid. However, the service doesn’t pre-vet candidates, so you will have to check their qualifications on your own.
This service aims to connect clients and seasoned tech experts, and facilitates cooperation between the two parties throughout the entire development process. This might sound similar to what other freelance marketplaces offer but there is a significant difference. Each applicant undergoes an extensive five-stage selection process to get into Toptal’s network. This ensures you will work only with the best developers from around the world. On top of that, every time you start working with a new tech specialist you will have a 20-hour probation period before making a final decision on further cooperation.
However, many businesses find Toptal’s fees too expensive for their budget range, since the developers' rates tend to be much higher than on other platforms. On top of that, the contracts with Toptal freelancers don’t offer much flexibility – you have to hire a developer for either a 20 or 40-hour weekly workload, with no regard to your project’s actual needs.
Partner with Offshore Development Company
Delegating some information technology functions, like application maintenance, software support, IT infrastructure, system integration and of course, product development, to external vendors is a common business practice. This approach allows you to transform your innovative idea into a thriving business, drawing on the experience of a resourceful overseas partner.
The problem with finding the offshore company you can entrust your project to is that there are too many options to choose from. Google search is your primary stop to sort things out. It is the best way to delve deeper into the offshore development industry, as you can find tons of useful articles, tips and surveys that can ultimately lead you to your potential tech partner.
Google search may help you meet your hiring goals quickly and efficiently, but it’s not always enough to make an informed decision. If you want to make the best of what the tech community has to offer, here are a few channels you can use to find a dedicated offshore development team for your project:
Leveraging your professional network is a sure way to connect to trusted remote service providers, or at least get some tips on where to find one. There is a chance someone in your circle has already been through the outsourcing hiring process. They are aware of all the pitfalls along the way and are likely to share their experience to your benefit.
In addition to references from your colleagues and partners, you can also use the power of social media. Facebook, Twitter and Instagram are effective tools for mass communication. You can create a post describing what kind of tech expertise, e.g. web applications, backend development, or cloud services, you are looking for, and then ask your friends to repost the publication to maximize its outreach.
Visiting tech events will provide you with some insights into offshore software development services and expand your knowledge of the latest IT industry trends. Tech community meetups also offer a great opportunity to engage with the representatives of different software development companies in person. Direct communication also helps you clear all doubts and make a smart hiring decision.
LinkedIn is the world’s largest professional network, and therefore, is the best place to turn to in the quest for a reliable offshore development partner.
Scanning a corporate account will give you an idea about the vendor’s location, number of employees, general overview of their projects, and sometimes even reviews from their former clients and partners. Once you have a list of enterprises that seem to match your goals and requirements, you should also check employee profiles to see who they are, what they do, and whether they will be keen on hearing from you.
Identify the company’s top-level executives, such as CEOs, CTOs, business owners, or management partners. To jumpstart the communication, send the people occupying those positions a personalized message explaining why you decided to contact them, what you are looking to achieve, and ask whether they are ready to continue the discussion on how you can bring value to each other.
Industry directories can help you take the guesswork out of the selection process. These resources gather data regarding leading offshore development agencies worldwide, with detailed information on their business operations, project history, and level of expertise. They can get you access to honest and independent reviews from authenticated customers, in-depth reports and case studies, or insights from top industry experts.
Platforms like Clutch, Upcity and Goodfirms allow you to browse vendors by location, primary tech stack and services they provide. During the search, you can also compare different service providers in the specific market.
The company’s profile on one of these websites is the first place to check whether the firm has any prior experience in developing the software solutions that present your business’ lifeline. Apart from the agency's own description of their services, you will also be able to go through their customer testimonials. That can give you a real impression of the level of communication, engagement and performance held by your potential remote workforce.
Open A Remote Development Center
If you want to keep full control over the development progress, promote active cooperation between team members, and gain footing in a foreign market, building an offshore development center (ODC) is the right choice.
Unlike other outsourcing options, with ODC, the remote programmers will work in close cooperation with you, which means higher team commitment and active engagement. Additionally, the offshore developers will work under the same brand as your head office, and adhere to the same corporate policies and work ethics as your in-house employees would.
Though establishing an R&D center is quite similar to hiring a domestic team, there is a huge upside to the process. This model allows you to overcome geographical and financial constraints imposed by your local tech market.
Relocating your business operations to an offshoring destination fosters easier talent acquisition, even when it comes to programmers with narrow and rare expertise. Moreover, with ODC, you can bring innovations to the world without fear of high development costs draining your funds halfway through the project.
Hire Offshore Developers with Grid Dynamics
Apart from the benefits, building your team overseas may give rise to certain difficulties. For one thing, starting a business abroad might require opening a legal entity in that country, and understanding the local tax system. You will also need to have at least basic native language proficiency to hunt for great tech talent via local job search websites, which usually don’t have an English version.
However, you can avoid all that hassle by joining your efforts with a company well-versed in the peculiarities of the local market, that can help you find great offshore developers for hire.
Grid Dynamics is a trustworthy partner that can guide you through the process of opening a remote development office in CEE and Latin America. We have engineering centers in numerous locations worldwide, including Poland, Ukraine, Romania, Mexico, Jamaica, and India, where we help companies maintain a healthy product development lifecycle.
We build high-end software development teams, enabling clients across the globe to leverage top-notch technologies delivered by experienced engineers. Our service model covers:
- Dedicated team. Build a remote development team and work with your software engineers using the tools and methods you know and love.
- Extended Team. Hire remote developers who can bring additional expertise and fresh perspective to your internal software development team.
- Managed Team. Delegate your product development, while focusing on priorities and results, rather than managing individuals.
- Remote Office. Move your software development operations to the desired location and enjoy working with top-notch developers.
Our recruitment specialists have extensive market knowledge to meet the needs of businesses of different sizes. If you want to grow your business with brilliant tech experts, Grid Dynamics is the perfect partner for you.
The primary motivation behind outsourcing software development projects is to allocate resources toward core business functions. Many businesses opt to hire offshore developers to gain access to specialized skill sets not readily available in-house, while others choose this approach to achieve cost savings.
Although finding the right team may pose some challenges, if you know what skills you need to thrive in your niche, you have clearly set expectations, and are eager to take some high-reward risk, outsourcing can definitely prove advantageous in the long run.