The issue of outsourcing is debated for years. For some companies, working with outsourcing software developers has become a common practice, for others, it is limited to single cases. Some companies have come to success constantly cooperating with outsourcers while creating applications and for others, such cooperation has ended with a sad experience.
So what is outsourcing: a great way to save costs or an unjustified risk? Should you hire developers or outsource would be a much more profitable solution? To come to the right decision, let’s review the advantages and disadvantages of in-house developers vs outsourcing.
Should you hire developers or outsource?
Of course, regular employees who are on hand in the office seem more reliable than a certain team of specialists working overseas. Part of the fear of outsourcing, however, is only a consequence of conservatism: the scheme “My employee is near, in the office” is more familiar to many companies’ management than a relatively new outsourcing possibilities. What are the real benefits of hired employees?
Always at hand
Of course, the first and most important advantage in working with hired personnel is that your employees are always close. This is useful not only for the continuous monitoring of the work process but also for the company’s operation. It is very important to be able to make changes to the project as quickly as possible and transfer them to the mobile development team. When staff members are in the same premises with the project manager, the procedure is much easier.
Complete vision of the project
When several teams of specialists work on one project, at least the team leaders must be able to see the project as a whole. Understanding the purpose of the project and their role in it gives employees a clearer understanding of their task. This, in turn, allows them to fulfill their part of the work in such a way that it is integrated as effectively as possible into the main project. Of course, sharing the same room contributes to such understanding.
The work of hired employees gives the management more tools for the quality control. This is precisely because each expert is hired according to predefined criteria and corporate standards. This means that assigning tasks to any of the departments, the project manager knows exactly which of the employees will perform them and how experienced they are. A clear advantage over outsourcing.
The first and main shortcoming of wage workers is the cost of their work. On average, the hourly cost of an IT specialist in developed countries is at least four times higher than the cost of a similar outsource professional from countries with lower life standards.
Another obvious shortcoming of hired employees is the need to expand staff to quickly execute large projects, which is also fraught with financial losses.
It should also be noted that employees are not always engaged in work, even when they are at the office. Thus, with a high hourly pay, the employee is paid even for the time they spend on breaks, lunch and office conversations.
Pros and cons of outsourcing vs hiring in-house
Is outsourcing better than hiring developers? For many, the very idea of outsourcing sounds risky. Indeed, passing the project to strangers, one always risks that their idea will fall into the hands of incompetent or low-skilled specialists, and an attempt to economize will turn into a real catastrophe. However, the advantages of outsourcing are not only in cost saving but the risks associated with outsourcing can be significantly reduced if you competently approach the organization of the workflow.
Naturally, the first advantage of outsourcing is its notably lower cost, compared to the hired employees’ upkeeping. As written already, the hourly rate of an outsourcing specialist can be many times lower than the cost of a similar in-house expert. Although it is not entirely correct to calculate the resources saved by outsourcing by simply comparing the cost of the professionals’ work (it is worth, at least, to take into account the cost of managers’ labor in preparation for the project outsourcing), on the whole, this is still a significant saving.
Many disparagingly refer to outsourcing because of, allegedly, the lower qualifications of foreign software engineers. This opinion arises from the common Western logic that “the better the specialist – the more is their pay.” In fact, the qualification of employees of many outsourcing companies is often not worse than that of Western developers and, in some cases, even higher. The difference in pay is due to the difference in the overall level of income and the economy of the countries in which offshoring outsource companies reside. In addition, any established outsource company invests heavily in the training and development of their employees.
Read also: How To Outsource Mobile App Development?
With the right approach to the outsourcing company selection, careful study of its portfolio and ready projects, one would have every chance to find excellent specialists at low prices.
Strange as it may seem, the principle of “project transfer – payment – obtaining results – cooperation termination” is, in spite of apparent instability, one of the advantages of outsourcing. Working with hired personnel, you never know what specialists you will need for the next project, so it remains either to keep a wide assortment of specialists, not all of whom are constantly involved in the current projects, or each time to additionally seek and hire the right ones.
The experienced outsource programming service providers typically hire and train whole lineups of professionals of varying expertise and hourly rates. This allows them to assemble remote teams consisting of exactly those specialists that are required for the project.
Of course, the main disadvantage of outsourcing are the risk of poor-quality work, which will have to be altered, and the risk of being deceived without receiving the result at all. There is also the possibility of unauthorized dissemination of information about the project or the disruption of timeframes.
However, all the main risks of outsourcing can be minimized by choosing the right contractor. In order to really save money by getting inexpensive, responsible and highly qualified specialists, it is necessary to adhere to such rules:
– Do not cooperate with little-known companies;
– Carefully study the finished works and projects of prospective partners (their portfolio) and feedbacks on the quality of their work;
– Draw up a competent contract, taking into account every detail (especially the non-disclosure policies);
– Design such a payout system for outsourced specialists as to avoid possible risks and financial losses in the event of a project disruption;
– Effectively organize the workflow: with the correct distribution of tasks and loads, the probability of deadline failures and delays is significantly reduced.
Final thoughts: When should you go outsourcing instead of hiring local developers?
In this article, we strove to consider the pros and cons of outsourcing vs hiring in-house. Both hiring the in-house staff and cooperation with outsourcing companies have their benefits, risks, and disadvantages. The cheapness of foreign specialists translates into greater risks, while the “reliability” of hired employees can be very expensive. Unfortunately, we often forget that possible breakdowns in terms of time, errors and shortcomings are most of all, the result of the human factor. A specialist remains human regardless of their qualifications, labor costs and residence – they, like any other person, are capable of making mistakes.
Read also: How to Manage Remote Employees?
So what kind of cooperation is better and more effective? When should you go outsourcing instead of hiring local developers? If you take into account all of the above, then, in many ways outsourcing wins, no matter how bizarre it may seem. Of course, some “buts” are implicated: one must carefully select the outsource development services provider, treating them as prudently as when choosing the hired staff; one must have qualified project managers who will correctly distribute the work between the remote teams and ensure a constant connection with the partner outsource company; etc.
However, with the right approach to outsourcing, it can bring a much greater return than hired employees.