When your company is needing talent, where do you lean on inhouse development vs outsourcing? We’ll help you answer that question.
Most companies juggle gigantic tasks. Leveraging emerging technologies, looking for funding, and asking important questions about developing an appropriate business model are some of the biggest hurdles in the early stages. But there comes a point where your business is stable enough to start new projects that require a larger team to help.
What do you do in this case? The two options are either hiring in-house or outsourcing nearshore workforce. In this blog post, we’re exploring the main differences between the two.
The cost of an inhouse project
Keeping everything within your company.
When companies require talent, their needs and interests dictate where to look. For example, if you wish to tackle new ideas with a team you already know and trust, you may be inclined to handle everything in-house.
According to the Corporate Financial Institute, in-house initiatives allow more operational control and better management of internal processes. Internal employees are well-acquainted with the organizational atmosphere, which allows them to jump right into a project. Also, because in-house work offers better growth opportunities, employees are more likely to feel motivated.
You should consider, however, that an in-house team involves the following costs such as hiring, overhead, overall team salary, IT expenses, training, and paid benefits. Leaders should also consider they may not have the in-house resources that can complete a project.
Also, pushing your company towards new boundaries may cause burnout, especially when you are already using every resource available or when they have limited working hours.
Outsourcing as an option
The costs involved in hiring remote staff.
You can also outsource or look for talent outside of your company. With outsourcing, there are three possibilities: onshore, nearshore, or offshore.
Onshore services allow role assignments within the same state or even the same country. In contrast, nearshore services provide resources in a neighboring region or a similar time zone. Finally, offshore focuses on sourcing talent in a completely different location.
Regardless of the option you choose, outsourcing talent involves costs such as remote developer fees, dedicated team charges, hiring, knowledge transfer, and contract formation. You also have to factor in which skills are in supply, the level of language proficiency, where developers are located, their level of seniority, and the length of the project.
The Global Outsourcing Survey from Deloitte details that outsourcing is gaining traction because it provides companies more flexibility in terms of hiring, organization, and delivery. You don’t require a lengthy hiring process to find expert talent that will adjust to your time requirements.
Outsourcing, especially when it comes to nearshore development, has positioned itself as a great alternative to find talent. Regions such as Latin America offer an immense pool of specialized talent with cultural similarities and great language skills. Companies that opt for nearshore are more likely to evolve at a fast pace and look for new, innovative solutions.
Accessing the right talent
To hire the right people, consider your company’s needs.
Having the right talent for your project can prove fundamental for its success. Back in 2019, an EY Fintech census showed that 42% of fintech faced a “digital skills shortage.” In that particular report, more than half of fintech firms cited finding talent as their biggest concern.
Two years ago, it was important. Now, having a highly-skilled and industry-expert team is even more critical in fintech, the growth of which has skyrocketed in the past two years.
Because of the reasons explained above, and despite the benefits of an in-house team, tackling new projects with an outsourced team has become an essential tool for organizations to meet their goals. Outsourcing decisions are currently playing a strategic role in your company’s long-term growth.
As we mentioned before, there are many forms of outsourcing. Nearshore contractors, for instance, can provide the required skills to finish your project. And don’t worry about time and cultural differences, as you’d be working with professionals from the same region.
Click here to read more about the benefits of nearshore outsourcing and how it compares to other forms of outsourcing.
Reaching the sweet spot
Now, ask yourself: “What should you be looking for?”
The current scenario implies tech talent hire rates are on an upward trend, though this doesn’t correlate with a massive increase in the availability of software engineers. Talent shortage, along with the rising demand for skilled resources, makes it difficult to recruit highly-skilled developers in-house.
As outsourcing trends continue to shape the future, firms should also learn to collaborate in a world where quality, flexibility, and skills are very important. Hiring talent across countries and regions has pushed companies to rethink how they provide effective remote services.
To keep up with market trends, companies are now looking into well-established nearshore software development firms. Factors such as low staff turnover, strong retention rates, and fast hiring processes are important to consider. This, along with a strong cultural competency, proven experience, and an outcome-focused portfolio is “the sweet spot” for many.
What does this imply? Nearshore partners offer high-quality talent comparable to domestic in-shore firms. They also provide a highly professional environment and, in general, entail very low risk. This is the sweet spot we’re talking about: a combination of different elements that will foster business growth.
Each company is a world on its own and must find what fits them best. However, if they wish to stay ahead, leaders must bear in mind their options and those efforts in which they must invest to continue innovating.