As the demand for technical talent increases worldwide, and patterns shift in how and where experts with cutting-edge skills work and live (overseas, domestically, in-country through the H-1B visa program, telecommuting, etc.), IT recruiters have a variety of staff outsourcing options to consider. And while no one staffing solution fits every project on a development team’s calendar, technical staffing firms can help your company fill ongoing resource needs by helping you decide on the outsourcing engagement model that’s right for you.
Whether addressing technical gaps with your in-house staff, or searching for a rare, in-demand skill, an experienced IT staffing agency will walk you through the differences between onsite, onshore, nearshore and offshore outsourcing models, while pointing out the pros and cons along the way. And then, with more knowledge at your disposal, you can choose the approach that best fits your company’s operating needs.
Here’s a brief look at the four essential staff outsourcing models available today, along with some of their benefits and drawbacks:
When companies hire technical staffing vendors to augment their full-time personnel, one of the simplest, and most convenient options to implement is onsite, which means the staffing firm will send skilled technical professionals to work in the client’s office for a set period of time. This option can be confusing at first, as the concept of “outsourcing” carries with it the word “out,” implying “out of the office.” But this does not necessarily have to be the case, depending on how a company prefers to operate.
- Your augmented staff will be physically present in your office, which enables natural and easy communication with your management team, while also helping temporary hires integrate quickly with your existing workforce.
- Onsite augmentation often reduces any possible tension you might anticipate between contractors and your permanent staff. Your employees, in most cases, should be more willing to cooperate with supplementary staff onsite, as they will be able to interact with them in person.
- When working with in-house augmented staff, you will have direct oversight, as well as face-to-face communication, with your temporary personnel. There will be no lag time in communication, allowing for a more “hands on” approach in how you evaluate and manage your newest team members.
- Since your firm has likely hired engineering and creative talent before, you can repurpose your onboarding materials and procedures (used previously with your full-time employees) for your augmented staff, which should make their transition more seamless, thus reducing any potential disruptions that bringing on temporary creative personnel or software engineers might add to a project’s delivery schedule.
- If you opt for the onsite model, costs associated with direct staff support, such as extra office space, desks, phones, parking spaces, etc. might be higher than it would be in case your augmented staff worked offsite.
- Augmented staff will still need to be educated about internal company policies and corporate culture, which can take up valuable time, and increase your onboarding costs.
- You’ll have to ensure that you have enough managers to supervise your supplemental staff (depending on the size and duration of a project), or else plan on adding or reallocating managers to support the extra personnel coming into in the office.
- While IT staff aug vendors strive to provide you with the best possible candidates they can find, the potential for interpersonal conflict (and hence the resources required for conflict resolution) always exists when you bring temporary hires into the office.
If a business needs a certain skillset, or has to scale up the engineering team to make a project deadline, but there isn’t enough local talent around to meet the demand, an IT staffing agency might suggest an onshore staffing approach, which means working with qualified candidates located in a different town or city, but still based somewhere in the United States.
- Because onshore staff is located in the same country as your company, there shouldn't be any language or culture barriers of note, which is beneficial when you need to build a strong team to move a project forward quickly.
- A wider range of technical talent will be available to you with the onshore model, as your IT staffing agency can pull skilled labor from the entire country, rather than a single, limited geographical location.
- While onshore staff will usually have more in common with your permanent staff than workers based in a foreign country, there still might be some time delays (imagine cooperating between the East and West Coasts), which can slow down your development schedule.
- Managers won't have direct, in-person oversight over supplemental staff that work remotely.
- When selecting the onshore approach, integration with onsite employees can take longer, as distance and time — even with outstanding communication protocols and technology in place — can affect how people cooperate and interact with one other.
Nearshore outsourcing is one step removed, geographically speaking, from the onshore model. Ideally, when implementing a nearshore approach, the software engineers hired through your staffing agency are located in a nearby country — with no more than a three-hour time difference, at most, between the contractor and the rest of the team. In the case of the United States, this would mean working with staff in Canada or Mexico, or perhaps Central or South America.
- When nearshoring in countries like Argentina or Costa Rica, with EF English Proficiency Index (EF EPI) scores of 57.58 and 55.01, respectively, you’ll often find a higher level of English proficiency than offshoring options in China (EF EPI score: 51.94), Indonesia (EF EPI score: 51.58 ) or elsewhere. And while English proficiency varies from region to region, nearshore engineers working in Latin America tend to share more cultural affinities with their North American peers than many other parts of the world, which can make communication easier.
- By definition, nearshore means your augmented staff is physically closer to your central headquarters, which reduces any time zone lag, making it simpler to communicate and coordinate tasks during standard business hours.
- Nearshore software developers usually cost less than onsite or onshore talent, yet still give your firm access to technical talent graduating from top Latin American universities, as well as tech schools located in other countries.
- While hiring engineers nearshore is typically less expensive than onsite or onshore labor, yet it can still cost more than working with offshore teams.
- You will encounter some time zone difference s (a few hours) when selecting the nearshore model. If every hour counts, especially when you’re on a tight delivery schedule, these differences can potentially lead to some marginal productivity losses.
For a variety of reasons, a company might choose to augment its staff via an offshore outsourcing engagement model. What this means, essentially, is hiring provisional workers overseas, many time zones removed from your central headquarters. For example, an American software firm in California, working with programmers in India or Ukraine, would fit this outsourcing paradigm.
- The number of STEM (science, technology, engineering and mathematics) graduates in India and China far surpasses the numbers found in the United States and Canada — by millions of candidates each year. This means the amount of raw engineering talent available to you overseas gives you, and your IT staffing agency, a much wider range of options (compared to what would be available to you locally) when it comes to locating the programing expertise you need.
- While the cost of working with software developers overseas can vary significantly, depending on a number of factors, including the strength of the local (overseas) economy, foreign business regulations, the number and availability of skilled workers and more, as a general rule, offshore destinations tend to cost considerably less (compared to other staffing options) when augmenting your IT staff on a project-by-project basis.
- If you need to work around-the-clock on a specific task, offshore employees, due to their geographical time differences (although this can be a drawback as well), can code and problem solve while your onsite team is out of the office for the day.
- Cultural and language differences, and even difficult-to-understand accents, can at times cause some communication issues between team members working in different locations.
- Contact can be limited when coordinating with offshore staff (due to time differences), which can sometimes slow down productivity during the workday, and frustrate expectations as far as output is concerned.
Choosing the Best Staff Outsourcing Model for You
As you can see, by comparing and contrasting these different staff outsourcing approaches, a variety of avenues are available to you when working with technical staffing firms. It’s the job of IT staff augmentation vendors to lay out the benefits, and drawbacks, of these different approaches, which in turn will help you choose the best option for your company.
BXGI guides our clients through this selection process by evaluating a company’s staffing requirements, and then submitting a detailed proposal based on the client’s requests, and our extensive staffing experience. We offer our customers a range of options to choose from, while taking their main concerns into account, including budget, timeline and technical skills desired.
Once a client has selected among onsite, onshore, nearshore or offshore — or perhaps a mix of options — we’ll staff your team, handle employment contract administration, provide legal and tax services (if requested), and for remote workers, arrange workstations as stipulated by the client. BXGI will then continue to monitor feedback from, and cooperate with our clients to ensure that their needs are being met, continually reviewing and adjusting their staffing plan as required, in order to guarantee their satisfaction.
While educating yourself about, and then to trying decide among onsite, onshore, nearshore and offshore staffing solutions can be a little taxing, the fact that such a diverse range of choices even exists means that in the days, months and years to come, you will be able to find an outsourcing engagement model that fits your software company’s specific staffing needs — even if those needs end up changing and evolving over time based on your company’s business needs.