Should We Expand Our Engineering Team Offshore or Nearshore?

Business is going well, and you’ve reached the point where you need some new faces and talent on your side, but what’s the best way to go about getting that? Companies with ongoing software and product development needs are increasingly turning to an outstaffing model for sourcing personnel. Outstaffing offers many advantages over outsourcing – it promises improved management capability, enhanced security protocols, and better continuity. As an alternative to recruiting in-house, outstaffing also comes with benefits in terms of cost and time savings. Yet, that’s not all outstaffing has to offer – and how exactly does it differ from outsourcing anyway? This article will look at the differences between the two models, examine offshore teams Vs. nearshore teams, and consider when it’s better to look outside your company and locale when you need to expand. 

Offshore Teams Vs. Nearshore Teams

If all you need is to extend your in-house team by a couple of people, then you might want just to consider hiring locally. In-house hiring is a long-term commitment and investment, but what if you need to recruit quite a few experts or build a whole team, and you’re going to need to scale it up and down according to where your business is at? If different development stages are likely to demand diverse expertise and staff numbers, what’s the most cost-efficient way to proceed and what’s the best way to find talent quickly and easily precisely when you need it?

Businesses and startups that see a repeated need for team expansion and contraction will likely benefit from looking toward a remote model. There is a relatively common misconception that outsourcing and outstaffing are almost identical concepts when, in reality, there are some fundamental differences between the two – and outstaffing offers a few things outsourcing doesn’t. 

Scaling Engineering Teams with Outstaffing

One of the factors that will drive your decision is what you need from an extended team – will you want to increase and decrease personnel numbers now and again? Outstaffing makes it easy to scale engineering teams, whereas hiring in-house makes that extremely difficult – and this is why. 

Outstaffing and Recruitment, Equipment, Office Space

One factor is your resources or available capital. Setting up extra team members can be costly – both in terms of time and money. You need to compose job ads, monitor responses and applications, assess candidates, hold numerous interviews, and then, even more importantly, spend quite a lot of time on onboarding new team members. For startups on the leaner side or companies that want to funnel financial resources into development, that’s not ideal.

With outstaffing, the partner company does all the recruitment, and you only get involved when you need to – be that taking part in the interview process or at the point of vetting candidates, the choice is yours. Part of an outstaffing company’s role is to assemble the personnel and skills you require, building a team tailored to your precise needs. You pay set fees to get the right dedicated remote team, all the office space it requires, and the equipment too.

When you engage an outstaffing company, you agree on parameters for cooperation from the outset. Not only does that set the tone for how you wish to collaborate, but it also establishes essential protocols and procedures for security too. The outstaffing company will then manage your account and monitor your remote team based on that. 

Managing Remote Teams with Outstaffing

Another decision driver is how much control you would like to have. Outstaffing markedly differs from outsourcing when it comes to managing your remote team. You get full access to supervise a dedicated team that isn’t tied to one particular project or even to a single component of a more comprehensive development plan.

One of the reasons we’re not going to consider freelancers in this article is down to management complexity. Often, companies shy away from engaging freelancers or outsourcing because of concerns over team management – and that’s justified. Trying to get half a dozen distributed freelancers to work together is just hard. Even the outsourcing model has limitations when it comes to management and communication. You don’t get access to the guys or gals working on your project; you just assign a very specific component, and that’s pretty much as far as your control – and the scope of work – extends.

Outstaffing is different. The company you engage assigns project and account managers, and you do the managing yourself – so, there’s support on hand when you need it, and everything runs a lot more smoothly when it comes to communication. With outstaffing, the remote engineering team is more a real-time utility and part of your organization. You’re free to control how the project flows, and remote developers work full-time alongside your in-house staff to make things happen and hit targets. Not only that but managing remote teams via outstaffing is limited to the work and project. The outstaffing company will take care of administration like taxes, pay, and keeping the team supplied with what it needs to function efficiently and productively.

Outstaffing also provides flexibility when scaling engineering teams, and then there’s the speed at which that’s possible. When specific skills are no longer needed, the outstaffing company simply allocates team members to a different client – it’s far less cumbersome than laying off staff and easy to swap in and out personnel as you need. 

Vast Talent Pools in Geographic Centers for Dedicated Teams

Where you are located could be another significant influencer on your decision. If you are operating out of a larger city where developers want to work, finding qualified talent is usually a lot easier. One of the most significant advantages of dealing with an outstaffing company is pairing its recruitment expertise with a healthy supply of remote candidates. Recruiting does not involve asking developers to up sticks, just to come and work for you. Outstaffing companies have access to local engineers – and they are often located in centers where outstaffing recruitment is the norm.

It’s not enough to just assemble a talent pool, erect some office buildings, and then attempt to set yourself up as an outstaffing location - doing so successfully requires more depth. Take Ukraine, for example, where a healthy supply of engineering talent is facilitated by a further education system that trains thousands of developers every year - in hundreds of universities. You can find engineers at all levels because so many foreign companies choose to build remote teams in the area. That’s all consolidated by the fact there’s also a thriving startup scene in Ukraine. It’s a process initially dependent on good educational infrastructure, that develops as demand grows, and has seen Ukraine rise to become one of the globe’s leading outstaffing centers - home to hundreds of remote engineering teams.

For offshore teams to work, engineers have to bring more than just technical excellence to the table - and destinations for remote teams need to have some substance behind them. That’s when a combination of IT skills and soft skills can pay dividends for companies everywhere. 

Offshore Teams Vs. Nearshore Teams – the Potential Pitfalls, and How Ukraine Solves Them

No model is perfect, and a sensible approach to overcoming hurdles isn’t to expect them not to arise – it’s far better to limit their impact. Offshore teams Vs. nearshore teams has a lot to do with communication. Time differences can be prohibitive, and it’s a great idea to choose a partner – not just based on the number of developers in a specific place – but on your geographical location and time-zone too. One of the reasons, for instance, that Ukraine does 70% of its IT services exports with the US and UK is that time differences are minimal. There is just a couple of hours between Kyiv and London, for example.

Another potential hindrance to project progress can be language barriers, so what are the solutions for that? When you’re considering an outstaffing destination, it’s good to look at the culture there. Is that similar to your own culture? If you are based in the US, for instance, how many English-speaking developers are there in the country you’re weighing up? Ukraine enjoys a very Western-leaning culture and a high proportion of engineers in the country speak English.

Your company culture is also an essential aspect of how smooth a project runs. It’s a big driver of productivity – so, how can you ensure that gets maintained when running a remote engineering team? Well, while an outstaffing company can’t provide the same benefits as if you had an extra team at your HQ, outstaffing companies do get to instill their own culture and monitor employee engagement. Your remote team gets a comfortable workspace, and you’re free to communicate and involve team members in decision-making and team-building activities. Ukraine enjoys much investment in IT infrastructure at both national and city levels, making it a go-to destination for hundreds of startups and major companies from the US and UK. 

Managing Remote Teams Just Got More Manageable

Offshore doesn’t need to mean off-limits. Outstaffing combines the cost-saving advantages of traditional outsourcing models with some of the benefits of nearshore teams. Suppose your company prefers to manage its own way, values communication, and channeling time and financial resources where they matter most. In that case, it could be time to consider partnering with an outstaffing company. If you’d like to find out more about how Agile Fuel assists startups and businesses globally with scaling engineering teams and recruiting high-quality developer talent, get in touch today.

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