Many companies have tried to work with offshore developers. Most have failed for all kinds of reasons and just shelved it as something never to do again.
I will list 5 myths that many companies believe before they fail miserably when trying to work with offshore developers or offshore teams.
Myth #1: It is much cheaper to hire offshore then local devs
Maybe 10 years ago this was the case. You could hire Senior Level Full Stack Devs for around $3K a month before taxes as independent contractors. $3K a month is $36K a year and the US Developer salary was 2–3X higher at $70-$100K per year. So you were saving 60–70%.
Now this is not the case any more. TopTal charges $80–$200 an hour for top 3% devs. Of course you may not need the top 3%, maybe you are ok with the top 30%, in which case you still need to pay at least $40 — $60 an hour ($85K — $110K a year).
Even at the lowest salary it will be around $85K a year. The Avg salary of a Full Stack developer in the US is around $110K, so now it is only around 20% savings compared to 60% that was before.
Myth #2: Good offshore developers are easy to find
There are plenty of websites like Upwork, Freelancer, etc.. that promise to get you the best offshore developers and quickly. But out of 100s of applicants you may find one good one or none at all.
Recently I was looking for a Full Stack C# developer for a small project.
Top level requirements were:
- 6+ years in .NET
- fluent english
- full time
I went to Upwork and posted a project. Next day I had 80 applicants. So far so good. I went through profiles and selected 20 applicants that seemed like a good fit.
After 2 weeks of interviewing here are my results:
- 5 didn’t show up to interview
- 5 spoke very bad english
- 4 didn’t have sufficient skills
- 3 were not who they said they were
- 2 were fronts for agencies
- 1 was good fit technically, but he said he has many other projs he wants to continue
So in the end I ended up with no developer and I wasted 2 weeks.
Using Upwork or similar sites is just one of the ways to find offshore developers. It is not a very good way. A much better approach is to find an expert with many years of experience working with offshore developers who have plenty of successful projects under their belt. Someone who can set up the groundwork in your company to work with offshore developers.
Myth #3: You can outsource the whole tech team
I have worked with many companies that started this way. They hired an offshore team and relied on them for all tech needs. For the first several years it worked well, but all of sudden the team is spending almost all the time on fixing issues and not adding much new value. They say that they need more resources to continue, so you oblige and the offshore team keeps getting bigger and bigger and so is your bill. It is a short term fix until they ask again.
After a couple more years, the offshore team tells you that their rates have gone up so you need to pay more or downsize and have less features delivered. The project is now at standstill and you can only pay enough to keep it afloat.
You hire an expert to review your system and.. you find that your system hase:
- Bad architecture
- No documentation
- No good development practices like automated testing and continuous delivery
Now you need to deal with all that as well as onboarding a whole new team. You say to yourself I will never work with offshore developers again and that was a good but very very expensive lesson.
There are much better ways to work with offshore teams and individuals which can save you a lot of time and money, but it is a big topic for another article.
Myth #4: Offshore Development works only for big companies
Many small and medium companies are under the impression that managing and coordinating Offshore developers can be handled only by large companies with big resources.
It is true that when you are starting you probably want to hire your primary tech people locally. Preferrably someone who shares your enthusiasm and direction for your project.
As soon as you have a core Tech team and you are looking to expand, hiring offshore developers should be one of your options.
Yes, there is quite a bit more that goes into managing remote teams than offshore teams. But considering the shortage of good developers locally and constantly increasing compensation, offshore teams can provide amazing value for any company, no matter the size.
Myth #5: Working remotely from home will decrease productivity
In the past, we all used to go to the office to get work done. In some cases developers were allowed to work from home a couple of days a week but that was usually frowned upon.
Then came the COVID. For many companies it has clearly demonstrated that working from home doesn’t decrease productivity and in many cases actually increases it.
For remote offshore teams, working remotely was always the case. So seeing how local developers can work remotely without loss in productivity, should be enough to demonstrate that offshore teams can work in similar fashion.
Yes, a remote team will never be as efficient as a local team, because of Time Zone difference, different holidays and other factors. But the difference can be made very very small if there is a good development process with continuous improvement.
In this article I outlined 5 myths of working with Offshore Developers. Many companies have outsourced their development to Offshore and after failing in a major way, decided to never do it again. Many have believed the myths and came out disappointed when it wasn’t reality.
Luckily there is a proven way of working with Offshore teams which I will cover in future articles.
At ENTech Solutions we have worked with offshore developers in Eastern Europe for more than 20 years. If you are looking for offshore developer resources and guidance please contact us at: firstname.lastname@example.org.