Building Development Teams: Outsourced vs. Remote Developers

Building Development Teams: Outsourced vs. Remote Developers
August 28, 2019

40 days is the average time it takes to fill an open tech position according to Glassdoor. That’s bad news for companies who want to tap into on-demand, global tech specialists. 

Companies such as Google, Slack, Oracle, IBM, and Alibaba have hired outsourced or remote developers to get started. Some still depend on remote development teams whose experiences are hard to find locally.  

These giant tech companies are coming up with innovative ways to remove geographical limitations and scale up their development teams from around the globe. 

As the demand for software engineers is going to increase, what you can do as a small-medium sized business is to start looking for alternative ways to find quality talent without spending a fortune. With remote development teams, you can get the same work done for half or even a quarter of the cost – that’s a huge number to small businesses – 

So why do some companies still hire in-house teams?

What most companies like about in-house developers is the opportunity to have them on-site, along with other team members. Monitoring productivity and progress becomes easier as there’s no language or distance barriers. 

However, companies that insist on having the whole team work in one place have to prepare for extra expenses that might include renting large office space to accommodate all team members, purchasing equipment, payroll taxes, and more. 

Scaling up and down is also not so easy with in-house teams. The process of hiring a new developer itself is hectic. Filtering CVs, and scheduling interviews can be extremely time-consuming, especially for small business leaders. 

So, what are the alternative options?

  • Outsourced developers 

Outsourcing occurs when a company hires an agency to either produce a website or an application from scratch or to add new features to an existing product. In this case, the agency takes full responsibility to manage the developers, and communicate project details with them. 

Companies that outsourced some of their development team include Slack, Skype, and Alibaba. 

  • Remote developers 

The remote development team means that part of your software developers work remotely from another location. They are fully integrated into your company and its culture. Unlike outsourcing, remote developers are managed by you. You have control over the hiring process as you can scale up and down, according to your needs. The company that sources the developers only takes care of the recruitment processes, on-boarding, and payroll. They won’t manage or interfere in the progression of your project. You are responsible for communicating directly with the developers, building a team culture and engagement.

Companies that hired remote development teams include Buffer, Doist, inVision, and Zapier. 

How do remote development teams compare to outsourced developers? 

  • Commitment 

Remote: Projects can be started immediately as soon as you decide to hire remote developers. And they continue to be part of your team as long as you need them. They fit into your culture and are committed to your company’s mission and goals. 

Outsourced: Outsourced developers are there to work on short-term projects, therefore, they don’t necessarily have to fit into your culture nor commit to your values. If you have hired an outsourcing firm, they will provide you with the development team in no time. 

  • Management

Remote: Remote developers are just an extension of your development team who work away from the office. You manage, monitor and guide them just like their in-house colleagues. 

Outsourced: Monitoring productivity and progress is a little bit complex when you don’t have direct communication with the team working with you. With outsourced developers, you have no control over your developers as the outsourcing agency will manage the development team from A to Z.  

  • Security

Remote: Remote teams adhere to your internal policies and share the same mindset as their office-based peers which makes them easier to manage and control. You can always sign an NDA with them to ensure data security and GDPR compliance.

Outsourced: Giving outsourced development teams access to your servers and confidential information makes your organization vulnerable to threats and data breaches. This is because they are often hired to execute short-term projects. Hence, you should always take extra precautions to stay secure. For instance, check the security policy of the outsourcing firm and make sure they have strict security policies to protect your data. 

  • Pricing 

Remote: Hiring remote teams can help you reduce recruitment and development costs by up to 60% without sacrificing quality. You’ll only pay your developers monthly and there are no extra or hidden costs. This will help you invest on growing your business, and generate more net income for you company. 

Outsourced: One of the benefits of outsourced teams is the reduction of costs. You either pay a fixed price per project or per hour, depending on the policies of the outsourcing firm you’re dealing with. However, rates may vary across countries for example, Polish developers are known to be the most expensive developers in EU. So, consider checking the price range before hiring. 

Image source: Ohio University

In most cases, companies who use either outsourced or remote development teams get a better quality of development than with local developers! Moreover, they are able to save a huge amount of money that they would have been spent on recruitment and on-boarding in-house developers. 

The bottom line is, hiring remote developers is the ideal option if you: 

  • Need to hire developers immediately.
  • Want to invest minimum efforts in the recruitment.
  • Want long-term members.
  • Want to manage developers, and monitor their progress directly. 
  • Want to cut recruitment and development costs. 
  • Want to work with the best talent worldwide at no risk. 

Hiring outsourced developers is the ideal option if you 

  • Need to hire developers immediately. 
  • Don’t want to interfere in management, nor communicating with the developers.
  • Don’t want long-term commitment. Only short-term projects. 
  • Want to invest minimum efforts in the recruitment.
  • Want to cut recruitment and development costs. 

 

Next, we are going to look at the best countries to hire outsourced and remote developers. 

Where to find remote developers? 

  • Egypt (A new destination for hiring remote developers)

During the past few years, Egypt has emerged in the software industry as a promising market to find qualified software developers. It’s the fastest-growing region when it comes to engineering and software development schools. 

According to HackerRank, Egypt ranked 43rd on the list of top 50 countries for software development. In partnership with the Franklin Institute, the 21st Century Partnership for STEM Education, the Teaching Institute for Excellence in STEM, and the Egyptian Ministry of Education (MoE), Egypt has developed a network of eleven STEM high schools producing highly skilled and professional tech specialists.  

  1. Cost-effective 

Egypt is ranked 7th in the list of countries with low cost of living. This makes hiring remote developers from Egypt is an affordable choice for many businesses. Depending on the type of commitment and the level of experience, software developers in Egypt cost between 1000 – 2000 EUR per month which is 70% less than the average cost of developers across Eastern Europe. 

  1. High level of competence 

Egypt is becoming one of the leading countries in the software engineering industry. With some of the oldest engineering schools in the middle east, Egypt has a growing number of IT graduates. Universities in Egypt have similar admission requirements to those in the US or the UK, requiring a full secondary school with grades over 95%. Ten engineering schools in Cairo are featured in the QS Top World University ranking. 

  1. Amount of IT professionals 

The IT sector in Egypt is experiencing steady growth. Engineering schools comprise 15% of the total graduates with around 26,000 alumni every year.

  1. Time zone 

The Egyptian time zone is the same as in most European countries. So, you will have the same working hours as your developers in Egypt. This makes collaborating with developers much more convenient. 

Where are they key outsourcing destinations? 

Image source: Codeinwp

 

  1. Ukraine

Ukrainian developers are skilled in many technologies such as Java, JavaScript, PHP, Python, and C#. The large tech market in Ukraine makes it an attractive destination to outsource developers, given that it is only one hour ahead of most European countries. Therefore, communication isn’t an issue since English is widely used by programmers. 

  1. Poland 

Polish developers are exceptionally skilled in Java, Python, and Ruby. According to HackerRank, Poland has a third of the world’ programmers. It’s a great outsourcing destination for companies located within the EU, however, US companies may want to adjust their working hours to fit the outsourced teams. 

  1. Romania 

Romania is one of the leading central and eastern European countries in the IT industry. It has more than 110K developers working with almost all technologies from Javascript and PHP, to advanced blockchain and machine learning technologies. Romanian developers are also cheap 

By outsourcing to Eastern European countries such as Ukraine and Romania, you will see your project progressing in many ways and your recruitment costs are reduced significantly. According to PayScale, Ukranian and Romanian developers cost between $36 – $40 per hour compared to $51 per hour for their UK counterparts. 

 

How to hire outsourced/remote developers without risks? 

 

Finding a qualified remote/outsourced development team depends largely on the recruitment partner you chose to deal with. However, failing to find a trustworthy recruitment partner could be a real nightmare. 

For this reason, the steps below will help you to search and find the best software development partner for your business.

 

  • Select the same time zone countries 

If you want your remote developers to work with your in-house team, then it’s better to choose the same time zone countries. If you’re located in the EU, then all the options we discussed earlier are perfect. Whether you decide to outsource developers from Ukraine, and Romania or hire remote Egyptian developers, you will work with them during the normal working hours. 

Otherwise, you can hire a project manager in a closer time zone to take care of the product progression plan. 

Secondly, how long would it take to travel from your place to the developers’ country? 

Let’s assume that you want to visit your remote team or arrange an annual treatment week to gather your whole team in one place. Hence, you shouldn’t choose a region that is 12 hours away. Traveling to meet your team in person is an important part of building team culture and increasing employee engagement therefore, it shouldn’t be a hassle. 

 

  • Select a highly developed IT market 

According to HackerRank’s list of the most promising countries in the IT industry, China has the best developers followed by Russia and Poland. 

 

  • Select the best price 

When considering the best country to hire outsourced/remote developers, be aware of the prices as it may vary according to the country’s living standards and exchange rate. 

To get an overview of the average annual salary of developers and tech specialists, check out salary and compensation reports by PayScale, and Glassdoor. These reports will give you an insight into the most affordable places to hire remote or outsourced developers. 

 

  • Select the job board 

After that, you should probably have an idea of where to find developers. Create a list of the most popular job boards or outsourcing companies that resemble your needs. For the best job boards, check out: Toptal, Honeypot, Upwork, Freelancer, and of course Remoteplatz. 

 

Over to you: 

There are many cases in which hiring remote or outsourced development teams become a no brainer. Depending on your needs, you can make a choice to achieve your business goals. 

 

By: Menna Shalaby

Online Marketing Manager at Remoteplatz

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