How to Hire An Offshore Development Team Successfully?

Offshore software development services have long been preferred over onshore and nearshore choices by startups and SMBs. It brings two core benefits: hiring skilled developers at a lower cost. In this blog, we'll explore important steps to hire an offshore development team, covering everything you need to know to make the right decision.

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What is An Offshore Software Development Team?

An offshore software development team is a group of skilled developers who work in a different country with lower labor costs. Companies outsource software development to these teams to fill talent gaps and reduce development costs. Offshore development teams work on software projects remotely and offer many technical talents and resources. They handle technical aspects so companies can focus only on their core business.

How to Hire An Offshore Development Team?

Step 1: Define Project Needs

All you need to do first is clearly outlining what you need.

• Scope of Work: Provide a detailed breakdown of your product—what it does, how it looks, and the key features it should have. The more specific you are, the better your outsourced team can build exactly what you envision.
  
• Technical Specifications: Choose the technologies, programming languages, and frameworks for your final product. This helps you choose offshore developers with suitable skills.
  
• Timeline and Budget: You should estimate your project duration and cost, so you can better manage resources and set practical targets. We recommend breaking down the project into manageable tasks with set deadlines to ensure better tracking and on-time delivery.

To sum up, if you and your remote team members are on the same page about your end goal, you'll be less likely to run into problems in the future.

Step 2: Find Potential Offshore Locations

Consider the following factors to choose a suitable offshore location:

• Talent Pool: Local talent pool should be the top priority cause you need skills for your project, right? Let's look for countries with a large number of highly qualified programmers in the technologies you require.
  
• Cost Efficiency: Saving money is the main goal of offshore development. So, of all the countries having talents you need, shortlist those with lower living costs.
  
• Environments: Consider other factors like time zones, language, culture, and legal factors to ensure smooth collaboration.
  

>> Read more: Top 10 Best Countries for Outsourcing Software Development

Step 3: Choose Your Hiring Model

You must select the method that works best for your project from the various options available for hiring offshore developers:

• Freelancers: Small projects with clear tasks and changing needs are best suited for this approach cause it may be less expensive. But, you need more oversight for them.
  
• Offshore Development Companies: They offers the whole offshore development team and manages every step of the procedure, from recruiting and onboarding to team management. The selection of the appropriate offshore partner is your main responsibility.
  
• Staff Augmentation: Temporarily add offshore developers to your in-house team for specific tasks. Your company can hire this directly, or you can outsource this process to an offshore development company. 

If you choose offshore development companies, they will manage everything from step 4 onward. Proceed to the following step if you decide to use staff augmentation or freelancers.

Step 4: Search and Shortlist Offshore Developers

Where to Find Offshore Software Developers?

To find qualified offshore software developers, consider these sources:

• Freelancers: Upwork, Freelancer, and Toptal are a large talent pool of freelance developers from different regions.
• Offshore Development Companies: Clutch, GoodFirms, LinkedIn, etc., are reliable platforms for finding leading companies in your selected regions.
• Job Boards: Indeed, Glassdoor, or LinkedIn are where you can post job descriptions. Developers worldwide can proactively search for suitable positions there.
• Tech Communities: GitHub or Stack Overflow often have active developers you can reach.

To create a successful offshore development team, carefully assess each member's quality.  

• Assess Technical Skills: Test their knowledge of languages, frameworks, and tools your project needs. You can use a small action test to assess their coding and problem-solving skills.
• Review Experience: Look for similar experience in previous projects. You can call attention to applicants knowledgeable with projects in your field of business. 
• Check References and Reviews: Contact previous clients or employers to understand candidates’ work ethic and reliability if possible. 

Step 5: Conduct Direct Interviews

• Verify Soft Skills: Interview candidates to assess their language competency, communication style, and capacity to work across time zones and cultures. Always note that good communication helps offshore development teams minimize misconceptions.
• Ensure Project Fit: Determine if they’re adaptable to your project management approach (e.g., Agile, Scrum) and open to collaboration with your team. Confirm their willingness to follow your processes and deliverables.

Step 6: Negotiate Contracts and Agreements

Make sure that everything is understood and agreed upon before officially bringing your offshore development team on board. The following are the main points to discuss:

• Statement of Work (SOW): Ensure everyone understands the project scope, deliverables, deadlines, and expectations. A well-defined SOW keeps both sides aligned and minimizes misunderstandings.
• Payment Terms: Payment Terms: Set specific guidelines for invoices, due dates, and payment checkpoints. Payments should be linked to project progress to prevent delays and maintain efficiency.
• Intellectual Property (IP) Rights: Decide who is the owner of the software or other produced assets. If full ownership isn't feasible, negotiate terms that safeguard your assets and ideas.
• Confidentiality Agreements (NDAs): Use NDAs to safeguard sensitive business and project information from competitors or unauthorized access.

How to Manage Offshore Development Team?

Managing an offshore development team needs specific strategies distinct from managing a generic software development team. You should carefully consider these factors:

• Clear Communication Channels: Use reliable tools like Slack and Zoom to maintain real-time conversations across different time zones.

• Set Expectations and KPIs: Clear roles and responsibilities are especially crucial for offshore teams. They help overcome geographical distance to ensure alignment and performance tracking.

• Time Zone Management: Schedule overlapping work hours to speed up remote team responsiveness and productivity with timely feedback.

• Cultural Sensitivity: Respect and understand cultural differences to encourage inclusivity and effective teamwork.

• Frequent Check-ins: Due to the lack of face-to-face interaction, offshore development teams need daily or weekly meetings to keep aligned and manage project milestones.

• Use Project Management Tools: Tools like Jira, Trello, or Asana bridge physical distances and track progress efficiently, keeping everyone informed.

• Transparency and Trust: Frequent updates and open communication build trust, which helps overcome the challenges of remote team management and avoid misunderstandings.

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Benefits and Drawbacks of Hiring An Offshore Software Development Team 

Benefits

Cost-effectiveness

Many companies use offshore development teams because they are cost-effective. Hiring full-time in-house IT experts is expensive, especially in developed countries like the US, UK, and Australia. You have to cover basic salary, taxes, incentives, extra benefits, equipment costs, power, and everyday comforts. Thus, hiring an offshore development team saves money and eliminates recruitment costs.

Access to specialized software developers

With the increasingly advanced technologies, the demand for specialized developers also grows. It takes a lot of time to find and recruit the right candidate to meet the requirements. Hiring an offshore software development team gives you access to specialized talents at your fingertips. They know the exact requirements via expertise and experience; hence, it saves you time to explain them.

Stay focused on core business

The software development process requires much effort, time, and focus. Overseeing in-house development teams constantly can distract from core business functions. By outsourcing to an offshore development team, business owners can focus more on business, and expert teams take over the development work.

Additionally, if you choose an offshore development company, they will have a team of experts and supervisors to manage the team. You don't need to care about the process; just focus on the final results.

Access the latest technologies despite budget constraints

It's hard for tiny firms to access the latest technologies due to budget. However, keeping up with trends is crucial for gaining a competitive edge. An offshore software development team can provide the organization with better technologies and let them learn new software skills cheaply.

Different time zones speed up work

Different time zones is a great benefit when working with offshore software developers. 

For example, Western countries outsource their development to Eastern countries due to the 10–12-hour time difference. Western companies finished for the day, while Eastern offshore development companies began work. Thus, much of the work will be done when the Western company arrives at work the next day. 

This creates a productive overlap, especially for urgent bug fixes and timely updates, without disrupting internal schedules.

Cost predictability

Hiring offshore developers not only reduces business costs but also ensures budget predictability. Before starting the project, the business and the offshore development team agree on the pricing, terms, deliveries, and other costs.

Other payment options, such as monthly or quarterly payroll, can also facilitate financial planning. If the development cost changes in the middle of the project, it won’t significantly affect the company budget unless the difference is vast.

Most offshore development businesses have fixed-cost packages based on the software needs, including scheduled maintenance. So, there are hardly any unexpected charges.

Scale your business better

Hiring an offshore development team is a great way to grow your business while lowering the risks. Offshore teams offer specialized resources that quickly adapt to new technologies and changes, so businesses don't need lengthy hiring processes for each project. 

This flexibility helps you respond to market demands quickly and cuts down on recruitment and training costs. Additionally, managing a remote team can help reduce costs during slower periods without laying off employees.

Drawbacks

Different mindset

Gender issues, religious beliefs, cultural practices, tradition, mindset, work ethic, etc., are all possible sources of discord. However, you can avoid this potential issue by looking at your potential offshore development team's previous work and talking to people who have worked with them before.

Additionally, you can start by picking a location that shares many of your cultural values and introduce essential cultural norms early in the onboarding process.

Data security

Outsourcing to other countries can help businesses reach their objectives. If you must communicate sensitive information, you should establish a legally binding agreement with your business partner. Some types of security documentation are NDAs (Non-Disclosure Agreements), Security Protocols, etc. 

Language conflicts 

Working with experts from other nations can cause language barriers. This disagreement can potentially cause major misunderstandings and misalignment of business objectives between the parties.

Compared to cultural differences, language difficulties are easier to overcome. Since English is spoken worldwide, you should prioritize finding suppliers and employees that are fluent in this language. Even if they don't speak it as well as a native speaker, they can still follow directions and complete assignments with minimal problems. 

Management problems

In theory, this shouldn't be an issue, but it often becomes a barrier to a successful project in practice. Since you can't see or communicate with your offshore development team directly, the challenge may increase. 

If you don't have a management strategy in place, everything will become a chaotic disaster. Therefore, it is important to have a reliable method for tracking progress and evaluating output as part of your project management toolkit. Managing your remote team is a must if you outsource software development.

How Much Does it Cost to Hire Offshore Developers?

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When deciding on a country for offshore development, many aspects must be taken into account. But let's be honest: companies choose offshore outsourcing to cut expenses, therefore prices usually determine where the work is done. 

Less economically developed regions (e.g.: LATAM, Asia, and Eastern Europe, etc.) typically have slower growth rates and more experts than more economically developed regions (e.g.: United States, Western Europe, Australia,etc.). Let's compare the hourly wages of big tech hubs to see how they stack up. 

Source: Accelerance Global Software Outsourcing Trends and Rates Guide

Conclusion

Today, any company that wants to grow and prosper should seriously consider teaming up with an offshore software development firm for their software development projects.

Whether you choose to build your own internal team of developers or work with an offshore firm, there will always be drawbacks. However, utilizing the services of an offshore software development company will allow you to save money, boost output, and expand your firm. You can rest assured that your project will be using cutting-edge technology thanks to their extensive experience, knowledge, and focus in this area.

Relia Software provides you with a dedicated offshore software development team! The expert project management and world-class, committed software development team at Relia Software are just two of the many reasons to get in touch with us. Do not pause your work. Get started on it in a matter of weeks by assigning development to Relia.

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