Top 5 Things to Consider when Hiring Offshore Developers

Top 5 Things to Consider when Hiring Offshore Developers

Planning to hire offshore developers? Keep these tips in mind to make it a rewarding experience.

Do you know that 71% of businesses outsource web development projects include some of the most popular Fortune 500 companies like Apple, Microsoft and General Electric? Moreover, most Fortune 500 companies hire dedicated developers offshore and rely on these offshore teams for project executions.

Why Outsource?

The global market value of outsourcing reached US$ 92.5 billion in 2019. Two key factors drive this growth:

  • Cost-Efficiency: Outsourcing web development tasks are considerably less resource-intensive than getting them done in-house. According to a Glassdoor survey, businesses pay $90,000 per year to web developers. They can get the same expertise by hiring offshore developers from India at almost half the cost. 
  • Access to Global Talent: Outsourcing allows ready access to available talent globally, which saves time and resources by cutting out the entire hiring and onboarding process.

5 Key Considerations while Hiring Offshore Developers

1. Geographical Location

Your outsourced development team needs to be located in a country with world-class infrastructure for delivering the services you seek. For instance, the partnership might become difficult if your partner lacks adequate high-performance internet access. 

Choose a country that has an existing and thriving business relationship with yours. That indicates your offshore development partner is likely to have a cultural orientation about the business atmosphere in yours. That’s a huge plus. 

English is pretty much the language of international business dealings. Check the country’s English proficiency before hiring offshore developers there. You wouldn’t want a language barrier in your communications.

India tops the global outsourcing destination list for any kind of IT requirements. Web development included, of course.

best it outsourcing companies location

India now ranks 63rd among 190 countries in the World Bank report on ease of doing business. In Tholons’ Services Globalization Report 2019, India tops the list of digital nations. The score breakup (on a total of 1) is as follows: 

  • Talent, Skill, and Quality: 0.91
  • Cost and Infrastructure: 0.80
  • Business Catalyst: 0.79
  • Digital Innovation: 0.72

In the A T Kearney Preferred Location list of 2019 also, India ranks first with a total index score of 7.06. 

The following graph represents the global offshoring preferences. The “Already there” legend stands for the surveyed companies that have an existing relationship with a particular country.

India as a Global Outsourcing Destination

Source

Other than the cost benefits, skills and ease of outsourcing are other factors that indicate why you should hire developers in India.

Also read: 5 Best Outsourcing Countries for Web Development: Cost & Time Difference

2. Company Stability and Reliability

Once you’ve zeroed in on the country, you need to check the company’s profile before you make a decision. We recommend partnering with a web development company rather than with an individual freelancer if you need ongoing development support. 

The stability and reliability factors of a company are critical to ensure that your project does not suffer because of issues at your offshore partner’s end. 

Use the following yardsticks to measure an outsourcing company’s stability and reliability:

  • Check the annual financial statements for three consecutive years to check for the company’s growth profile. Investigate both net income and revenue growth.
  • Check the company’s financial health by exploring the debt/equity ratio.
  • Check how long the company has been in business. 
  • Check the company website carefully. Look for customer reviews. 
  • When you begin the initial communications, ask for customer references. Ask for their contacts to be able to speak to some customers directly. 
  • Inquire if the company has experience of working for clients in your country. That will indicate a pre-existing idea about the business culture in your country. That’s an advantage for sure.
  • Investigate the company’s cyber-security commitment and history. You wouldn’t want to risk a security breach.

It is always a better choice to hire dedicated developers from a trusted outsourcing vendor instead of investing your money and efforts on freelancers.

 

hiring dedicated developers

3. Cost Efficiency

This is the other major factor behind your decision to hire offshore developers. Calculations of how much cost-cutting you’ll be able to achieve are definitely important. 

However, it may not be cost-effective in the long run to choose the company offering the least expensive terms. Cost efficiency needs to balance expenses and quality. Compromising quality to cut costs is not good business practice. 

We present two tables below:

The first one reflects the average hourly rates for hiring dedicated developers across popular offshoring destinations. 

Cost Efficiency

Source

The second one presents a more detailed breakdown of the average hourly rates for developers across tiers if you adopt the dedicated team model in offshore outsourcing. Full-time employee in the second table implies an offshore dedicated team employee, not an in-house team member.

hire offshore developer rates

Source

4. Human Resource and Talent Pool

If access to global talent is one of the main reasons you are hiring offshore developers in the first place. You have to probe the actual human resource and the skill-sets a company can offer. 

Check whether the company you outsource web development to actually has an in-house staff with the required skills ready to work for you. If their policy is to hire freelancers when they get a project, you should better look elsewhere. 

This is critical. The Mercer-Mettle Report 2019 on India’s state of talent acquisition reflects the following: 

  • 100% of small businesses (1-500 employees) reported talent acquisition to be a challenge
  • 90% of the medium-sized companies (501-1000 employees) said the same.
  • So did 67% of the large companies (more than 1000 employees)
  • Technology, internet, and electronics are among the industries that reported talent acquisition as a challenge.

The PWC CEO survey report 2019 also reflects that 79% of CEOs globally are concerned about the availability of the right kind of digital talent. 

hiring offshore developers talent acquisition problem

How To Check If The Vendor Has The Human Resource That You Need

  • Ask for online interviews with the staff member/s who will be working for your project. 
  • Organize to have their skills tested on-the-job. Get them to work on something while someone from your side oversees that. There are online platforms to facilitate such a process. 
  • If the company has personnel who have worked for clients in your country before, it will be beneficial for you to have such members in your offshore team.

5. Industry Understanding

Just as a prior idea about the business practices of your country is an advantage, so is industry understanding. 

Different industries have different needs. Check if the company and the offshore developers they propose for your development needs have the experience of working in your industry before. 

This is not mandatory. However, if they do have exposure to your industry, that will be of considerable advantage to you. 

Hiring Offshore Developers for Short-term or Long-term?

Just as there are different models of outsourcing, there are varying partnership models in offshoring also. Do you have a short-term need of developers for one particular time-bound project? If yes, a project-based contract with an offshore vendor may be all you need. 

However, if you need long-term development support over a period of time, it is recommended to hire dedicated developers. You can build your own dedicated web development team offshore.

A dedicated team is like your own in-house team without the recruitment and onboarding hassles. Also without the heavy overheads. You get a readymade team of your choice. You also get the authority to retain monitoring and oversight control. But you remain free from the need to micromanage. 

You cannot possibly ask for anything better.

Kevin Oskow

VP, Client Success
A proud father, husband & aspiring pianist, he enjoys all the hiking San Diego offers.