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- Offshore Software Development: Risks and Concerns
- 3 Tips for Offshore Hiring Success
Technology won’t wait for anyone. This dynamic arena calls many businesses to ride its tides if they want to stay relevant and competitive. But because of its demand, many companies find it difficult to hire top talent who can deliver their needs.
In that case, it impacts how smaller companies deliver their service for their clients. Picture this, big companies have more access to talent while providing a generous payment package. However, small to medium-sized companies don’t have that kind of luxury.
Moreover, there is an ongoing tech talent shortage in the United States. This simultaneously impacts the recruitment market and developer rate, making it harder to hire local prospects.
As a result, many businesses are looking into an alternative option to combat the challenges of hiring locally. This poses the question: “Should I hire onshore or offshore?” If you don’t know the answer yet, fret not. We’ll walk you through the differences between onshore vs. offshore.
In essence, onshore hiring is the more familiar and conventional hiring process. As its name suggests, it’s the process of hiring local talent from or within the same country. It could be through direct hiring or tapping an IT recruitment firm.
Pros of Onshore Hiring
Additionally, onshore hiring offers advantages that you can reap only when you take its course. This process entails the following benefits:
- Possibility of physical interaction. Regardless of work arrangements, you can meet your employees face to face.
- Time zone alignment. No worries about time-bound expectations. With the same time zone, you can easily keep in touch with everyone’s schedule.
- Language and culture commonality. Avoid communication blockers and culture misfits. When hiring onshore, you’ll highly likely share the same language and culture with your employees.
Cons of Onshore Hiring
Evidently, most advantages of onshore hiring depend on close proximity with employees. But today, most employees prefer telecommuting. Also, most employees often look for flexible or remote arrangements. Here are the other disadvantages of onshore hiring:
- Talent shortage. Generally, software talent is scarce, especially since there is an ongoing developer shortage in the United States.
- Higher salaries. The low supply of software developers triggers the salary rates to soar. This would become a challenge for small businesses with limited resources.
- Overhead costs. Remote work and onsite arrangements would still incur overhead spending for devices and equipment. You also have to cover your employees’ benefits and medicare packages.
Likewise, it’s a huge risk for businesses to invest in resources that could easily burn their capital. That is why most startups and scale-ups look into offshoring to manage their hiring budget.
Hiring Offshore Developers
Offshore software development leverages resources from developing countries to augment the talent demand from investor countries. To its core, offshoring means relocating certain business processes to another country. It could be through building an offshore arm or hiring an offshore partner to supplement a team you need.
The main goal of why companies offshore is to save costs. However, offshoring has characteristics that many businesses can benefit from.
Here are the most common benefits of offshoring:
1. Lower cost, same quality
Economic differences between countries also entail different workforce rates. For example, the Philippines has lower wages compared to the Western territories. This makes the country an ideal offshore destination. The software talent rate would be relative to their local market rate, so you still spend less without compromising quality.
You also won’t incur overhead fees. Partnering with offshore companies frees you from doing so since they take care of employee management.
2. Wider talent pool access
One of the best things about offshoring is it gives you a wider selection of potential candidates. This expands your likelihood of onboarding top developers from a wider pool.
3. Hiring convenience
Offshore development partners perform the recruitment to the onboarding process. At Full Scale, we have a pool of qualified developers ready for deployment to clients. So, you can bypass having to recruit and assess the employees yourself. Just choose from an array of profiles based on your requirements and you’re good to go!
These are just some of the advantages when hiring offshore. But, this business venture still poses certain concerns for many entrepreneurs. Due to its unconventional nature, it often raises some doubts. Let’s discuss these further in the next section.
Offshore Software Development: Risks and Concerns
There are plenty of reasons why many modern-day US businesses should go for offshoring. The above-mentioned reasons are just the tip of the iceberg when it comes to the long list of offshoring benefits.
However, its very nature is also one that causes many entrepreneurs to second guess pursuing this venture. Timezone and distance are already apparent. However, more concerns pop up such as:
- Team productivity
- Reliable service and loyalty
- Developer’s personal background
- Employee retention
- Intellectual property
- Company culture fit, and more.
Ultimately, these concerns are very much valid. So, the best solution is to partner with a reputable offshore software development company. Doing so frees you from all the worries, and even answers your questions about offshoring.
Take Full Scale, for example. We are a software development company based in Kansas City, MO. Our offshore arm is located in the Philippines where we house our software talents and content marketing experts.
Through our years of service, we perform intensive background checks during recruitment. Aside from the skills, we also look for a positive working attitude to ensure organizational culture fit.
Upon onboarding, we assign floor managers to developers to keep their productivity intact. Through our team and client workflows, we ensure to deliver great service and launch quality software products.
Our growing client base is proof that offshoring works when you partner with us. Thus, we are the solution to all the possible concerns and misconceptions about offshoring.
3 Tips for Offshore Hiring Success
1. Don’t fall for the “Cheapshoring” trap
One main goal for offshoring is to cut costs. However, going for the cheapest option is not the most practical thing to do. Why? A $10 hourly rate looks attractive. But always bear in mind that you get what you pay for.
When we reference the offshore rate above (which is $25/hour), $10 is too low. A developer with such a low rate may not be of the best caliber. As a result, you might get bad results and poor product delivery.
2. Look for a great location
Asia, Latin America, and Eastern Europe are popular spots for offshore development. Make sure to choose a country within these areas with a reputable IT presence.
3. Work with reliable offshore software partners
Upon scouting a great location, it’s time to dig for a reputable offshore development partner. This solves all your worries and effort about recruiting software talent. A great company does all the work for you so you can focus more on your business’s core operations.
That is exactly what Full Scale is. Our growing clientele proves that we are one of the most reliable software development companies in the Philippines. Read more about offshore development tips in this entry: Offshore Development: 8 Keys to Success.
The Philippines outdoes other developing countries in terms of offshore business process management and outsourcing. Its IT-BPM industry is a melting pot of offshore processes such as software development, customer support, and knowledge process outsourcing.
So why should you hire developers from this tropical archipelago? Here are the top reasons:
- English communication skills. The Philippines ranks second, behind Singapore, as the most English-proficient country in Asia. This is why many Western countries prefer offshoring to the country.
- Culture and traditions. As a US colony for almost five decades, the modern-day Philippines has American culture embedded in its current traditions. Most Filipinos are also familiar with Western pop culture and influences. So, it’s easy to find common interests with Philippine teammates.
- IT and software talent. The Philippines produces thousands of IT graduates every year. As a result, this broadens the talent pool of software developers and IT talents in the country
- Knowledge in JQuery and LESS (Leaner Style Sheets) and Content Management Systems (WordPress, Joomla, and Magento)
- UI Testing and debugging processes
- Security compliance and settings
- API Integration
- Skills in basic web design (Prototype designing, UX design, and UI design)
Full Scale is among the fastest-growing software companies in the Philippines. As we expand our recruitment across the country, we gain access to a wider talent pool.