Beneficial R&D services with Offshore Development Team
Pandemic 2020 and the critical need for remote work provided a mandatory object lesson on the viability of having employees in multiple, distributed locations. According to ResearchandMarkets, more companies than ever are taking offshore development team on, with the global IT outsourcing market expected to hit $397.6 billion by 2025, growing at an estimated rate of 4.5% annually.
Want to catch the trend and make a digital transformation of your business? We can show you how to find, manage an offshore development team, and use it to build your software products. Let’s take a deeper look at what offshore software development is and why it is profitable today.
What Is Offshore Software Development
“Offshore companies” is not a new term. It has been well known as a powerful tool for many successful entrepreneurs and investors who are well aware of its benefits and values. Therefore, understanding how it works is necessary for all new IT startups.
Offshore software development services are generally performed in countries where labor cost is much lower than in the country where the services are received, which is extremely profitable for the IT industry.
Offshore software development is the new normal. It is pretty easy to work with remote developers, as more data protection solutions and distance work software appeared. Furthermore, offshore software development is legal around the world because it’s governed by the rules of the country where they are registered, as well as those countries where they operate.
Offshore product development is the perfect solution for any digital business which seeks to optimize performance, save substantial resources, and quickly acquire talented IT specialists. By leveraging a dedicated offshore team’s experience and expertise, your company will dramatically expand its capacity to achieve business goals.
Reasons to Hire Offshore Developers
According to Deloitte’s global outsourcing survey, around 72% of the companies prefer software development outsourcing over an in-house team. Below are a few of the reasons why companies favor looking for an offshore development team so much.
According to a report by Quartz, about 46% of startups fail as they run out of money. However, this can be successfully prevented by startups that hire an offshore development team. When you outsource, you don’t have to pay for overhead costs like payroll, office space rent, vacations, insurance benefits, recruitment fees, etc. Even more—the rates of developers in offshore countries are lower than that of North America and Western Europe due to the lower cost of living.
A large tech talent pool
Top IT industry specialists in countries like the US and Western Europe are already employed by the tech giants. They have enormous packages, attractive perks, employee benefits, job security, and it is extremely hard to convince them you are a better employer, and that it is beneficial for them to work for you. However, with offshore software development, you can hire professional developers from Eastern European countries that will cover your business needs with no language barriers and critical cultural differences.
Time reducing and productivity-increasing
Hiring an offshore development team saves time and increases overall productivity. With a dedicated software development team, you do not have to invest time in project management or other HR activities—it will be taken care of by the offshore development provider. You also save time on training new employees as every outsourced team member already has the required skills. On average, you’ll get 4x faster delivery than with onsite colocated teams.
Safety and Transparency
With offshore development companies like Intelvision, there are no hidden fees or terms, and you always have access to all information related to your project. Additionally, we always sign Non-Disclosure Agreements and take every step required to protect your intellectual property rights.
Difference Between Nearshore and Offshore Outsourcing
There are a few types of foreign companies: offshore software development, and onshore companies. These types of companies are distinguished depending on taxes, the need to keep records and submit reports to the government agencies, and the openness of information about the founders of the company.
The information about the founders of the offshore software development company is usually unavailable or difficult to access. There are about 110 offshore countries in the world right now, including Latin American countries, and ones in Eastern Europe. In the “classic” offshore there is no income or turnover tax—companies pay a fixed amount to the budget every year: from a few hundred to several thousand dollars.
Entrepreneurs who choose offshore software developers or companies don’t always have negative intentions. Sometimes they register a company in another country to avoid inconvenient business conditions in their country. When countries set a high tax rate for business, they realize that some companies will more likely choose offshore.
Onshore software development companies are created in certain countries or regions with low taxes, which also includes Eastern Europe. Companies pay all taxes, keep and submit reports, and information about the founders is open.
Top Offshore Software Locations
The Western European countries and Asia are the regions with the highest demand for offshore developers and will help us paint a clear picture of differences in the development costs and other specifics of offshore development among various regions.
Speaking about the best destinations for outsourcing software development, many Eastern European countries like Ukraine, Poland, the Czech Republic, etc., are globally recognized as the top countries for hiring offshore developers. Eastern European offshore developers have broad tech experience and knowledge of various programming languages.
For example, Ukrainian engineers can master IoT, AI, Machine Learning, Data Science, Blockchain, and other cutting-edge technologies, as well as provide QA & Testing. The majority of Ukrainian QA specialists are certified and have software testing certifications such as ISTQB, and CTFL/CTAL.
The number of developers in Asia reaches about 7 million. The most popular destinations for hiring an offshore development specialist are India, China, Philippines, Vietnam, Bangladesh, Indonesia, Malaysia, and Sri Lanka. The main benefit of hiring tech talent in Asia is (usually) low cost. However, it doesn’t guarantee a high project quality. Time zone disparity and cultural differences can also affect the development process.
Latin American countries are close to US clients, with a minimum time zone difference—this is why many business owners in the USA prefer hiring a dedicated offshore team in Latin America. The most popular countries for offshore development in the region are Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Panama, and Peru.
The Cost of Hiring Offshore Software Developers
A software engineer in the USA earns an average hourly base rate of $47.59. This amount may vary depending on the experience, the technology available as well as the location of work. For example, the rate in California is $58.96 per hour, in Washington, it’s $55.01.
In Western Europe, the average hourly rate can vary with the country: in the UK it’s $71, in Germany—around $56.
A 2019 report by A Ventures Capital, Aventis Capital, and Capital Times states that in Eastern European countries like Ukraine, Poland, and Romania, the range of average hourly rates is $25–$50.
An average hourly rate of offshore software development in Latin America, as reported by IDC, is $30–$50.
Asia remains the top outsourcing destination for software companies as the countries charge a price that is considerably lower than other regions. The range of average hourly rates in the top Asian countries is $18–$40.
You can find out more about how much the services of an offshore software development company will cost you by leaving a request on our website or writing to us by e-mail and on social networks.
Ways to Find an Offshore Development Team
You can use the aforementioned methods to get the best offshore development partner. We have listed below four ways you can hire developers for offshoring software product creation.
Search development company directories
There are online directories such as Clutch, ITFirms, and GoodFirms where offshore companies are listed. During the search, you can delve deeper into specific areas of expertise, programming languages knowledge, etc.
Try freelance websites
There are several online sources where you can find an offshore development team that works on a freelance basis:
- Upwork: the platform handles the administration aspect of your collaboration with the offshore software development team, so you can concentrate on the progress of the project.
- Toptal: this platform establishes a strong bond between the partners. Here it won’t be possible for the candidate just to simply register and monitor offers—each specialist must fill out a special form and pass an interview with a technical recruiter.
- Skyworker: it is an online platform that works like the Tinder dating app. Candidates see which companies want to hire them and decide who to show their contacts to. More than 800 companies are looking for employees on Skyworker, and 25,000+ Tech-specialists have posted their CVs there.
Work with development companies such as Intelvision
In 2022 your best bet is to still find an offshore development center that will serve all your tech needs. Software development companies’ teams are made up of Frontend, Backend developers, DevOps, QA engineers, designers, project managers, and more from around the world. For example, Intelvision’s Tech and Non-tech IT specialists partnered with hundreds of companies to boost development capabilities, co-pilot technical leadership, and support software solutions.
Check out LinkedIn
LinkedIn is the largest professional social network that helps you connect with colleagues and build professional contacts. There are over 660 million people on LinkedIn right now. Using this platform, you can look for the employees’ data, their experience, and even the accounts of the specific offshore software development team. While hiring offshore developers, be sure to check out their previous work history and portfolio.
How to Hire a Perfect Offshore Software Development Team
Your business success depends on who you choose to work with. Here are some tips which can help you to make the right decision:
- Portfolio. Check if the IT company specialists worked with the projects in your niche. The number of projects completed by the software development service provider can indicate the company’s proficiency.
- Time zone difference. Make sure that the working hours of the offshore specialists will match the head office time.
- Culture. Take into account the cultural differences between your country and the offshore country. As they said, don’t show up on time for dinner in Tanzania. You are expected to be 15 minutes late at the very least for dinner there. The difference in culture and mentality can be huge, so you and offshore developers just might not work well together.
- English proficiency. Captain obvious is here: it’ll be much more productive to cooperate with your development team when the language barrier is no issue.
- Online reviews. Take into account the reviews, and success stories of the companies you consider as potential partners. You can find this information on their websites, LinkedIn profiles, and ranking platforms such as Clutch, Trustpilot, Techreviewer, Google Reviews, etc;
Security. Make sure a development company complies with international security standards such as ISO, PCI, HIPAA, and has an effective security policy.
How To Manage An Offshore Development Team
How to get the most out of cooperation with an offshore software development team:
Give clear instructions
An offshore software development team needs to know what to do. Before starting a project, clearly define the roles and responsibilities of each employee. Remind them that you are available if they have any doubts or questions.
Share the project goals
Without a common goal and long-term vision, your offshore team won’t be able to work efficiently. Define the goal to be achieved and present it as a challenge. For example, the goal is to release a new app before the end of the year. The offshore dedicated development team will understand the value of the daily tasks and will be more involved in the project.
Schedule regular weekly online meetings
Perhaps the most difficult thing that can arise while working remotely is the time zone difference. For example, when it’s morning in Chile, it’s evening in Kyiv, and it’s already night in Seoul. To keep everything under control, schedule regular weekly calls, such as OKR meetings. Contact the offshore development team once a week to discuss OKR goals for the next 7 days. Set a playful rule: You can’t miss Google Meet even if you’re in space. Even if there is no way to join the video call, invite specialists to try voice mode at least for a while.
Implement Agile practices
How to keep a fast pace of a team working in the face of constant change? Switch to Agile methodology. It’s the gold standard for programming project flow. Agile approaches reduce development to a series of short iterations lasting 1–3 weeks. The customer accepts the results of each of them and proposes adjustments, and the offshore team finalizes the product. According to the 2020 Organize Agile Survey, nearly half of companies in 19 countries have been using agile methodologies for 3+ years. Among them are Apple, Adobe, and Microsoft.
Managing an offshore software development team can become a real challenge. Contact us, and we will show you how managing offshore development teams can work for you!
The Bottom Line
A lot of businesses hire offshore development teams to boost capabilities and bring software products to market faster. Got any questions on how to find an offshore development team? Wanna hire offshore developers? Drop us a line!
What differentiates Intelvision’s teams is a unique blend of industry-specific knowledge and technological competence. Clients rely on us for a long-term partnership, flexible offshore software development team, and a multitude of tech services offered.