Offshoring vs outsourcing

When expanding a development team, local hires are the go-to. But unfortunately, it’s difficult. Due to the scarcity of developers and rising salaries, more companies are seeking alternatives. As a result, outsourcing, offshoring, and nearshoring are on the rise. Let’s take a closer look at these and go through their pros and cons.

When expanding a development team, local hires are the go-to. But unfortunately, it’s difficult. Due to the scarcity of developers and rising salaries, more companies are seeking alternatives. As a result, outsourcing, offshoring, and nearshoring are on the rise. Let’s take a closer look at these and go through their pros and cons.

The Basics: What You Should Know

Outsourcing – involves contracting software delivery to third parties. The cheapest approach, involves dealing with freelancers or suppliers that work with freelancers. It’s not viable long-term as development is beyond your control.

Onshoring – involves moving software development to non-metropolitan areas in your country. Rent, expenses, and income are bigger in cities so you can minimise operational costs by establishing a development team in a neighbouring town.

Nearshoring – implies “close” to home. Involves working with a development team that operates in a comparable time zone. Nearshoring helps organisations collaborate in real-time with their in-house personnel.

Offshoring – involves constructing a global development team with full-time employees. Despite the time difference, this reduces the dangers of hiring short-term workers. It also lets organisations choose their developers without geographical constraints.

Downsides of Outsourcing

Outsourcing is cheap so it’s used by companies trying to cut costs fast. Flexibility and lack of commitment are the benefits. You just pay the team for the job since they’re not permanently hired and no resources are spent on idle workers if demand lowers. This can benefit firms with less predictable capacity. So what are the drawbacks? Here’s a list of the most popular ones:

• The developers aren’t your employees.
• You won’t always deal with the developer themselves.
• Lack of proper investment in your vision nor your brand.
• Developers work on multiple projects for different clients simultaneously.
• Substandard delivery.
• Unpredictability.
• Lack of control: you don’t manage the team directly.
• Difficult communication.
• Lack commitment.

Offshoring: The More Sustainable Solution

An offshore development team is a handpicked team of engineers, based in another country, who are full-time employees of your business. This distinguishes outsourcing from offshoring. Having everyone in one office is ideal, but let’s face it; it’s expensive and complicated. Offshoring and in-house recruiting are the same except the office is far away, which isn’t a big deal in 2020.

Is Offshoring The Right Choice for Your Business?

Offshoring has many advantages over local recruiting. You get top-notch engineers with the right skill set on a permanent basis for around half the cost of hiring at home.

With the right offshoring partner you can scale up quickly and sustainably, which is a potent combination. Offshoring is a tried and true method for businesses wanting to expand or hire engineers with uncommon or specialised skills. 

There are a few challenges that you may need to overcome, but the end result is that you get to work with a team that you can call your own. Furthermore, by directly collaborating with the offshore team, an efficient workflow can be established without compromising on the output quality.