Should You Hire an In-House Developer or Outsource Overseas?

Many organizations praise the merits of having in-house developers, while others have sworn off due to unsuccessful experiences. In the current “new norm” of business, should you outsource development or hire a dedicated software in-house development team in-house?

The Benefits of Outsourcing/Nearshoring

Labor arbitrage is seen as the biggest pro for outsourcing. Obviously, the cost of labor is more budget fitting when you can outsource overseas, you can get more bang for your buck for the “same thing” elsewhere. Many organizations have seen the difference it makes and has avoided paying more for someone locally.
Why pay local currency for a developer, when you might be able to get the same work done for a fraction of the cost with a top-quality professional from another country through a partner recruiting agency and, therefore, use the cost savings to build a bigger, more feature-rich application instead?

Outsourcing firms, such as Dorigo, urge organizations to consider the extra time associated with managing and preparing an offshore project by empowering organizations to partner with local recruitment firms. When a partnering recruitment agency has equal or greater talent pools, outsourcing usually trumps hiring locally.

Short Term Commitment with the Long Term Commitment
The most underrated benefit of outsourcing is the ability to bring in an expert on a project basis without committing unnecessary long term (and paying associated costs). You may need someone with a certain skill set now but need someone else with a totally different skill set in a few months.
Ad hoc resourcing from a structured organization that creates the security environment for the highly skilled developers is a guarantee to the customer that there is continuity within short term tailor-made staffing for project realization.

Q&A on Outsourcing

Quality? – A huge issue when outsourcing overseas is quality control. How do you make sure the code that is being written is of high quality? How do you even judge the developers on outsourcing sites who list their portfolios?

The Fix! A common practice for large recruitment firms is to curate technical portfolios and get through profiles that are the right fit. The best developers arrive at your doorstep, with much more ease and accuracy. Having done a technical interview, agencies can ensure the candidate actually can code, so once they pass to your in-house HR they can ask behavioral questions to make sure there is a personality fit with your team.

Code Collaboration? – Collaboration is a HUGE challenge when outsourcing nearshore developers overseas. Depending on which country you choose to hire a developer in, there can be major cultural issues pertaining to the statement of work. That’s why writing extremely specific requirements are key to having a good experience outsourcing.

The Fix! Pair the outsourced developer to your company using Scrum. In studies, large cross-distributed teams achieve the same goals as small local teams when using Scrum. This allows projects to self-organize, provides transparency into project work, and emphasizes communication from team members. Distance workers can avoid being left in the dark, and avoid having needs or preferences changing halfway through a project. This kind of organized process is important for distributed teams that lack organic methods for communication.

In-House Developers
On the flip-side of outsourcing, in-house developers have their benefits. They have bought into your business idea, have adopted to your corporate culture, and have high opportunity costs for working with you. They have aligned interests and define success by building your business to generate revenue and disrupt markets along with your team. This takes a long time.

However, there are some investment aspects to consider!

Cost –A developers’ salary including benefits and securities can be expensive, which means hiring a developer can be cost-prohibitive. On the one hand, a developer’s compensation (which includes salary, benefits, and securities), can be expensive. And so can be the compensation for contract termination, when your project is done and you no longer require the developer’s services. This means that hiring a developer or a whole team of developers can be cost-prohibitive.

Time – When hiring developers, you should consider the time it will take to define the type of profile you want, to find the right professionals and convince them to join your company, as well as the training and adaptation period to the corporate culture and project. This process can be more taxing than you might think at first.

In the case of outsourced workers, you can have them working on a project-by-project basis. Your IT recruitment services partner will make sure to provide you with professionals that are a fit from both a skill perspective and a cultural perspective in the long term.

And, since the demand for skilled developers is so high and time-consuming, outsourcing this process will allow you to focus on other pressing issues within your business.

So, which to choose?

Our general recommendation for companies looking for an answer, is: it really depends. Is your situation hybrid?
If you are looking to cut through the hassle of finding talented developers, to implement someone to your team that has the ability to work on a wide range of projects, at a much cheaper cost than hiring someone for the long term – then we recommend outsourcing.

Always ask yourself these questions:

  • What am I looking for in a developer?
  • How much time do I have to spend doing the search?
  • Can I write comprehensive technical requirements and judge how well the code is written?
  • Am I knowledgeable enough to judge how well the code is written and if best practices are being used to do so?
  • Where do costs fit into the equation?

Answering these basic questions will assist you in figuring out a best-suited choice.We also recommend speaking to other professionals in the field. Do your research!

A specialized recruitment partner in your region with a wide pool of talent will often be able to direct you in the right direction. Whether it’s nearshore, outsourcing, or in-house developers that you’re looking for, ask the right questions to those who have the knowledge and experience. A professional perspective makes way for patterns in best practices!

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