5 Advantages of Offshore Software Development


June 24, 2020

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Offshore software development, also known as staff augmentation, is where a company employs one or more developers in a different country than their headquarters’ office. They are regular employees in every sense of the word, the only difference is that they’re working in a different country.
While there are many advantages of Offshore Software Development, here are the 6 biggest advantages you can expect when you hire offshore:

Reducing Costs

Quartz.com reports that 46% of start-ups fail because they run out of money while still in their starting phase. The average cost of a senior developer in the United States is above $100,000 yearly. Hiring a similarly skilled developer in the Philippines, for example, is typically $55,000-60,000 yearly—and that’s even while using a staff augmentation firm to recruit, host, and retain your development team. That’s nearly half the cost once you account for the difference in benefits package costs, which typically run companies an additional $5,000-15,000 a year in the United States.
The Hired.com report “State of Software Engineering” confirms that this cost of top talent in top cities is only increasing as well, “in 2019 average salaries for top [software] engineering roles went up by nearly 13% in London, 7% in Toronto, 7% in New York, and 6% in the San Francisco Bay Area.”
Pro tip: Hiring a freelancer that works from home or through a staffing company could also help you save additional money by eliminating overhead costs like office rent, supplies, and training resources.

Scaling Up Quickly

Not only are recruiting, onboarding, and training costs expensive, they’re also typically very long processes due to the large demand for skilled developers. Staff augmentation firms help alleviate these burdens by hiring highly-skilled workers who are typically ready to hit the ground running right away. Effective IT staff augmentation companies get your development team up and running in weeks, not months.

Less Hiring Competition

With everyone constantly fighting over the same few candidates, those candidates know they control the timeline and salary negotiations. Even after you’ve hired them, those developers will expect frequent raises since they know their own value in the market is extremely high. HRdive.com estimates that it costs employers 33% of a worker’s annual salary to hire a replacement if that worker leaves. Offshore staffing companies help prevent these headaches by hiring highly-skilled workers who are paid fairly and are dedicated to your company.

International and Diversified Workforce

Forbes writes that “Nearly 95% of directors agree that diversity brings unique perspectives…while 84% believe it enhances performance.” Forbes continues, “The world is only beginning to see all of the benefits of having a widely-diversified workforce.” Hiring an offshore software development team is one of the easiest ways to have an international and diversified workforce.
Pro tip: Using long-term staffing companies rather than temp agencies or freelancers will allow you to keep your developers focused solely on the tasks that you give them, rather than other companies’ projects as well. You can guide your team according to your expectations and requirements. This means you are free to tell them your particular way of doing things.

Greater Flexibility

With much lower recruiting, retention, and hiring costs, offshore software development hiring allows increased flexibility to add additional skill sets and programming languages as opposed to hiring locally. 
Many staff augmentation firms will even allow you to remove certain programmers from your team and add others with new skill sets. This way your company always has the skills you need while never paying for ones you don’t.

Looking to take advantage of all these benefits? Check out these 6 steps to hiring a qualified developer today.



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