The Five Biggest Mistakes to Avoid When Building an Offshore Software Development Team
Have you ever heard of “The Engineering Project Triangle”? In the engineering world, it’s used to illustrate the perpetual quandary that most product leaders find themselves in with each project. They must work amongst three key constraints: Cheap, fast, and good. The trick is that they have to choose two (because it’s near impossible to deliver all three).
But of all the points on the triangle, finding “good” is the hardest. It’s difficult to source and retain enough local software developers (from front end to backend to QA to DevOps to security and more) who can keep your product development moving and meet your high-quality expectations. However, thankfully there is a way to optimize finding “good” talent: offshore software development!
Building your offshore development team has big wins as long as you can avoid the even bigger pitfalls—we know, because when we were in your shoes, we tripped and fell plenty. Now we’re here to make sure you stay on your feet (and get the team you need).
Know all the benefits and all the risks of offshore software development — and then call TurnKey
- Top Advantages of Offshore Development
- Mistake #1: Not understanding the importance of having an offshore development partner
- Mistake #2: Picking the wrong offshore location or region
- Mistake #3: Focusing too much on incremental cost over long-term value
- Mistake #4: Not having your development team custom recruited
- Mistake #5: Not having a talent retention plan in place
- Some final thoughts
Top Advantages of Offshore Software Development
Using offshore software development has a number of critical benefits, including:
- Access to top talent: When you build your development team offshore, you get to dive into bigger—and often more specialized—talent pools than you have in your local market.
- Accelerated roadmap: You can hire high-quality developers faster offshore, with much greater product development velocity as a result.
- Cost efficiency: Offshore developers typically have a lower cost of living (versus high cost centers like the United States and Western Europe), thus creating reduced salary demands.
- Increased scalability: You can spin up new development teams (and add to existing ones) quickly as your business grows and evolves.
But as Kermit the Frog once said, it’s not easy being green –there are some big landmines to avoid on the road to building a great offshore team. Let’s walk you through some of these together.
Mistake #1: Not understanding the importance of having an offshore development partner
You could totally DIY your team. But ask yourself some important questions before you grab the hammer.
Start with this one: Am I familiar with the quagmire of local laws, taxes and regulations in each country, or will I open myself up to significant liability? What you don’t know can’t kill you—but it can kill your business if you get it wrong.
Next: Do I know how to find an offshore development team in another country, interview them well enough to appropriately gauge their skill level, then recruit and maintain them while integrating them into my company culture? If not, you’re signing up to play darts in the dark—and the board is thousands of miles away.
Mistake #2: Picking the wrong offshore location or region
When building a super kickass offshore development team, location is everything. But don’t just close your eyes and jump. Do your homework. Weigh the pros and cons of developing software in each location or region, and marry those up against your overall strategic goals.
At TurnKey, we have all the answers. But if you insist on studying, we’ve put together a cheat sheet on the various locations for you:
- Eastern Europe: This region is best known for a rich density of specialized talent (AI/ML, crypto, cybersecurity, etc.) and for high levels of English proficiency, which makes integrating an offshore development team into your broader organization easy.
- Latin America: Because of its time zone proximity to the United States, this region is a home run for customers looking for high levels of collaboration across their entire team. BUT (there’s always a big but) the two countries with the biggest population of developers—Brazil and Mexico—speak different languages, so you’ll need to pick a spot to build a team around rather than spanning out remotely across the continent.
- India: Long associated with offshore development, India does have a large talent pool to draw from but the time zone difference is a deal-breaker for many US-based companies. This is a good option to consider if you need a team that works independently of yours.
- Asia: Though offshore call centers in the Philippines have made Asia a player in the offshore world for many years, it’s a rookie in the offshore development team game. You may find pockets of great talent, but you’ll have to do some serious hunting and gathering, which means scalability is slow (if it happens at all).
Mistake #3: Focusing too much on incremental cost over long-term value
If you live in the US or Western Europe, hiring offshore developers is the most affordable choice you can make. And though there are cost differences between the different regions (Eastern Europe is more expensive than India, for example), these differences are on the margins.
Saving money on one end usually means spending it on the other, so don’t be penny wise and pound foolish when you hire offshore. What’s the point of saving a few bucks if you end up having to spend piles of it later to ship code effectively?
Bottom line: Focus on the big picture and your long-term ROI. Pick a region based on strategic fit for your product. Hire a team that meets your objectives and folds into your company culture. Winner, winner, chicken dinner.
Mistake #4: Not having your development team custom recruited
Most offshore development firms give you whatever developers they have available regardless of whether those developers are a perfect match for your product goals or company. This inevitably leads to poor culture fit which then sends you straight into the 40% churn category.
Also there’s this not-so-fun fact: Off-the-shelf developers give you off-the-shelf products.
To avoid this, insist that your partner custom recruits when they’re hiring an offshore development team for you. Go get a partner who puts you first and listens to your needs then actually meets them (along with your key requirements).
Mistake #5: Not having a talent retention plan in place
You might be able to land the prom king (or queen), but can you keep them long-term? Or will their wandering eye have them dancing with a new partner before your song is even over?
It’s not you, it’s them. (And if you don’t work with TurnKey, it’s your offshore development partner, too.)
One of the biggest challenges with offshore development in general is that the turnover rate is absurdly high (about 40%!). That means that 4 out of every 10 software developers on your team will be dancing with someone else before the party is over. Unacceptable (heartbreaking, really), especially if you are trying to build a high-performing product development organization.
So how do you hold their gaze? Have a robust talent retention program in place from jump. This includes monthly one-on-ones, formal recognition and celebration of work anniversaries, ongoing professional development and training opportunities, advanced English lessons, and much more.
Happier developers = better software + you don’t get dumped on the homecoming stage.
Some final thoughts on offshore development
Before we started TurnKey, we were running our own SaaS-based startups. We made all of the above mistakes and more. But then we figured out how to win—by building the offshore development partner we always wished we had (but couldn’t find). And we did it for companies like yours.
And then we kicked it up a notch by turning offshoring into YOURshoring. This means we systematically eliminate all the potential mistakes for you by:
- Custom recruiting every developer on your team so you always get the right fit every time.
- Providing a comprehensive talent retention program that cuts your developer churn by 50% vs. competitors.
- Offering developers in a variety of locations so you can choose the region that is best for you (rather than being forced to do something that is best for us).
- Focusing obsessively on delivering white glove customer service, which makes us the best client partner in the industry—bar none.
This is a software development team that works outside of your own country and time zone—usually in Eastern Europe, Latin America, or Asia.
I mean, you could do an internet search, but you’re going to come up against time differences and language barriers. (Have you ever tried to negotiate terms on Zoom using hand gestures because you speak English and the guy on the other end doesn’t?) Call TurnKey. This is what we do all day, every day.
Ideally, however you want them to. But you have to set that arrangement up in advance or your offshore developers will do what’s best for them—and because they’re likely working when you’re not, you won’t have any control over it. (This is one of our specialities. Call us today.)