The concept of offshore software development is one that has gained significant momentum in recent years. Now, with the COVID-19 also urging businesses across the globe to move to a remote setup, it may just be time for you to jump on the offshoring bandwagon. After all, the outsourcing and offshoring industry is now valued at over $85 billion.
For some businesses, the attractive low prices of hiring a team in a developing country like India is enough to take the plunge and go offshore. However, other companies are still debating on the tangible benefits of offshore development [check The Scalers study]. If you belong to the latter group, then this piece is for you. Through this piece, we weigh the pros and cons of offshoring for you by asking you three simple questions. If the answers to these questions are ‘yes’, then offshoring might prove to be an extremely lucrative option for your business. Let’s begin!
Are you struggling to find the right local talent?
Today, the technology industry is said to be one of the most dynamic sectors in the world, and for a good reason. After all, the demand for skilled IT professionals is always at an all-time high. And that’s not all. Newer and advanced technologies such as AI, Machine Learning, and Robotics have triggered a surge in recruitment, unlike anything we’ve ever seen. As a result, more and more businesses are always on the lookout for talented individuals who can fill new, specialist roles.
However, there’s usually one significant challenge. Businesses in the West, especially in the US and Western Europe, are faced with an acute talent shortage. For instance, a recent study that was conducted in the UK showed that almost 70% of tech employers are unable to find the right local talent. In fact, over 24% of the respondents even said that their inability to find the right talent could prove to be catastrophic for their business in the long run.
Similarly, in the US, local talent is still hard to find. In reality, studies show that by the year 2028, the acute talent shortage in the United States will lead to a potential economic loss of over $450 billion. That’s a staggeringly high number, even for a developed country like the US. So, the reality here is quite obvious. Companies are finding it hard to meet the demand with the existing supply.
But again, that’s not all. The software industry has been identified as the sector with the highest turnover rate — an alarming 13.2%. This means that even if you do find the right talent that you’ve been looking for, they may not stick around for long. Because, given the high attrition rate, they’re probably going to leave your organisation after a few months, letting you suffer a setback, and go through the gruesome recruitment process all over again. You won’t be able to deliver your software projects on time, and your profit projections are going to suffer yet again.
Is your business in the same position too? If yes, then maybe only hiring local talent is no longer sustainable. Instead, consider going offshore and building a team in a country like India that produces over 1.5 million engineers every year. India can give you access to talent, dedicated, English-speaking engineers who are not just technical experts, but are also individuals with a never-give-up attitude — exactly what your business needs.
Are you paying a premium?
Did you know that employee wages account for almost 50% of the fixed costs of an average business in the West? And that’s only because the acute shortage of talented developers and the increasingly high demand has made it that much harder to stay local.
So what do businesses do? When they find a developer with all the skills that they are looking for, they want to ensure that the potential candidate chooses them rather than the five other companies that also want to hire them. And thus, they end up paying an absolute premium, which doesn’t just include a higher salary package but also a list of employee-centric benefits such as tax relaxations, gratuity, medical insurances, travel allowances, life insurance, and so much more. At the end of the day, you’re looking at a mind-boggling price, just to stay local.
However, in today’s IT industry, this is easier said than done, which is why businesses need to look at alternatives. If you’re in a similar situation, consider building a development team offshore. Because of the increased supply of engineers in growing tech nations like India, you no longer have to pay an absolute premium to hire the creme de la creme of the engineers in the country. To add to this, the lower cost of living in India is so much lesser, and thus, you don’t even have to compromise on the quality of the engineers that you’re hiring.
Are you struggling to scale your business?
Let’s assume that your business is thriving like never before, you’re taking on more and more clients, and you’re exactly where you envisioned you would be. However, the local development team that you have is unable to keep up with the increasing number of projects. They’re at their full capacity and simply cannot accommodate new projects. So, instead of signing new deals and scaling your business, you have to say no. Sounds familiar? If yes, then you really need to scale your business quickly, and you need to go offshore to do it!
So if the answers to all the three above questions are ‘yes’, you might want to give offshore development a shot! Not only will you gain access to an incredible pool of talented and qualified engineers who can build quality products and services, but you also get to do it without breaking the bank.
