As a startup, you’re probably racing against the clock (and budget) to prove your concept’s worth to potential investors and get your product to the market as fast as possible. At the same time, you’re missing the technical know-how to make it happen, but you’re reluctant to hire in-house as the modern economy has created a bidding war for tech talent.
In jams like this, hiring an offshore development team can help you overcome the challenge of limited resources and implement your digital solution idea with all due haste.
What is offshore development?
Offshore software development involves contracting IT tasks and functions to a third-party vendor in an overseas region. For this process, companies can hire individual offshore developers for select tasks such as product discovery, MVP development, or testing — or team up with an entire development team through a dedicated company.
In today’s struggling economy, hiring remote developers has become a strategic imperative for businesses. Between 2024 and 2029, the IT outsourcing market is expected to grow by 8.48%, resulting in a market volume of over $812 billion in 2029. Now, let’s see what perks make offshore development such a popular practice among global companies and what benefits startups can reap from it.
Why hire an offshore development team? Startup edition
Some of the most successful products, such as Whatsapp, GitHub, and Slack, are good examples of how offshore development can add well-timed traction to a rapidly growing startup. However, a head start is not the only benefit that makes offshore development teams a lynchpin of market success.
Cost-efficiency
The unvarnished truth? Many startups — 38% to be exact — fail because they run out of money. By hiring offshore software developers, budding companies can extend their runway and reduce their burn rate, tapping into lower labor and production costs.
Cost reduction varies by geography. For example, in European tech hubs, startups can seize up to 39% reduction in development costs. In South Asia, cost savings can be higher. But you shouldn’t aim for the cheapest development team, as low developer rates are often achieved by hiring inexperienced professionals or cutting other corners.
Along with salaries, startups can eliminate or minimize other costs, including office rent, employee expenses, recruitment fees, and more. As your offshore development partner takes over these expenses, all your investment goes directly to implementing your product idea.
Moreover, companies can opt for as-needed services, which is a great option for businesses at the onset of their journeys. This way, you both keep your costs down and pay only for the services that you really need.
Access to a wide talent pool
Today, the demand for tech talent outweighs the supply, and companies go to great lengths to land experienced tech pros. Along with huge hiring budgets, top tech employers and fintechs offer stock options, signing bonuses, and other perks to fill in vacancies. So, for a fledgling startup with a limited hiring budget, the pickings are slim when it comes to the tech hiring market.
Hiring offshore developers allows businesses to broaden their recruiting horizon with both affordable and qualified talent competent in the needed domain. With offshore development, startups can also tap into a niche or cross-functional development skills that are inaccessible in the local market.
For example, artificial intelligence expertise, the darling of most modern startups, is one of the most sought-after skills in today’s tech landscape. However, only 10% of new AI roles are filled by existing staff, indicating the scarcity of in-house AI talent.
Outsourcing to an offshore development company allows startups to pick the brains of specialized AI developers, ensuring they can effectively leverage cutting-edge technologies for their projects.
Sustainable scaling
Startups operate in fast-paced, hectic environments, grappling with uncertainty and tight deadlines as they rush to launch their products before running out of funding. Traditional hiring, the one that takes around 45 days and more, doesn’t exactly fit into this agile atmosphere. The delay in attracting tech talent can turn out to be disastrous and result in a startup losing a one-of-a-kind opportunity.
An offshore software development company has a pool of pre-qualified candidates on tab. Your offshore development team is always there for you, giving you the necessary resources to scale your development efforts, pivot, or rewire the tech stack. And if something goes awry, an offshore vendor always has a backup candidate to pick up the slack.
Speed to market
Venture capitalists have always relied on speed to market as one of the most important criteria for deciding on an investment opportunity. Long production cycles and delayed launches can prevent you from getting large investor bets.
Moreover, the longer you delay the launch, the more you delay getting feedback from the market. Hiring offshore software developers solves two problems at once. You both get access to fast-to-hire dedicated teams and kick-start your development process by having an agile pod of professionals on board.
Improved product quality
Not all founders have a technical background. Offshore development companies, on the other side, are highly specialized and experienced in creating high-quality digital products. This means you have access to hire the right professionals with the right skills that bring unique expertise to your table, maximizing the quality of your deliverables.
Tapping into expert skills means faster launches, equating to money savings and the first-mover advantage.
Higher productivity and reduced management overhead
As a startup founder, you already have a lot on your plate. Plus, you most likely have limited resources to handle HR functions such as recruitment, onboarding, and payroll. Offshore software development can relieve you of administrative and management burdens like these. With a core team of outsourced full-time developers, you don’t have to spend your resources on hiring or training new hires, as your offshore team already has everything it takes to go the distance with your project.
By outsourcing your project to an offshore development company, you can also reduce or eliminate the need for in-house project managers and other management personnel. Moreover, the scalability of ramping up and down your team on demand allows you to meet your current startup needs without extensive paperwork.
Minimized administrative hassle allows you to focus on core business operations and focus on growing your startup.
When should you hire an offshore development team?
Cooperation with offshore developers bears fruit for the majority of software development projects. However, there are some cases in which hiring offshore developers is even more vital to the success of your venture.
Startup development from scratch
If you want to transform your unique business idea or prototype into a successful product, landing an offshore team can be the key to supercharging your development project from ideation to launch and doing it right the first time. An external dedicated development team can support you at all stages of project development and complete it faster and cheaper than a small in-house team.
Also, as early-stage startups have to work around lots of limitations during their pre-mature phase, they don’t always invest in building a scalable architecture from the very beginning.
Instead, they develop an MVP that works for now but leaves them with heaps of tech debt that results in expensive rework once the product starts to take off. An experienced offshore tech partner can reduce the risk of re-building the architecture by creating an optimal, growth-ready foundation for your product.
Moreover, thanks to their time-tested knowledge, offshore teams can highlight potential issues, whether it’s regulatory compliance or product monetization, to save you a lot of trouble down the road. Plus, some offshore development companies have an extensive business network of investors, developers, and other partners, allowing early-stage startups to tap into much-needed support.
Startups in growth-mode
Once the startup finds the product market fit, it’s ready for rapid scaling. And here’s where it gets tricky: over 80% of startups quit the race because they fail to adjust the product so that it can accommodate growing user needs. It happens due to various reasons, including the lack of tech talent, increasing overhead, the absence of a well-defined roadmap for improvement, and more.
Whatever the reason, third-party assistance can help you support your growth strategy, respond to demand fluctuations, and avoid the fixed costs associated with full-time employees. You can speed up the process of product scaling, deliver new features faster, and create a calibrated process of feedback gathering and processing for faster innovation.
Maxed out capacities in-house
Budding businesses tend to stick to the leanest business models whereby employees wear multiple hats to keep the ball rolling. As a result, software product development gets tacked onto other responsibilities, which leads to sub-par product quality and employees who spread themselves too thin. A mediocre product, in turn, may fail to stand up to market standards or attract the desired customer base, leading to missed opportunities for growth and revenue.
To ease the strain on your employees, you can resort to offshore teams. By adding more hands to your team and leveraging the vendor’s ready infrastructure, you can fill the internal gaps and do more with fewer resources.
Inability to deal with specialized tasks
The issue of limited knowledge and expertise in specific stages or areas of development is also solved through third-party technical expertise. Any startup whose project is beyond the technical expertise of its dev team can hire offshore software developers to borrow their know-how.
Whether it's web app development or some narrow skill like live streaming, outsourcing allows you to complete the ecosystem at less cost and with higher throughput.
This is particularly important for early-stage startups looking to build an MVP and progress to the next development stage.
Tight deadlines
Investor expectations, newcomer advantage, competitive pressure, or regulatory hurdles may put startups in a time crunch. In times like these, an offshore development partner can help you maintain your sanity and ensure quick turnaround times.
In this case, you don't have to go through the traditional hiring and onboarding process. Instead, you get a ready-to-go team or a solo developer who can jump straight into the project and accelerate its delivery.
Where do you find offshore development teams?
Experienced and reliable offshore software development teams are a gem that is hard to come across. However, if you know the right venues, you can increase the odds of securing a suitable development team.
Tech directories and listings
When looking for development partners, you have to factor in a lot of data, including clients’ reviews, specialization, team size, services, and other information. Online directories, such as Clutch, Business of Apps, and DesignRush, have all this information in one place, allowing you to navigate a diverse talent pool and match your project requirements with suitable dev teams. Tech directories and listings also feature portfolios and testimonials from former clients so you can gauge the reputation of your potential dev team.
Moreover, most platforms can connect you with developers directly, making it easy to discuss your project requirements and negotiate terms.
Professional networks and communities
Almost every offshore outsourcing agency has a profile on LinkedIn, the largest professional networking community. You can use LinkedIn as a supplementary source to collect background information about the vendor, size up their experience, and even browse the accounts of the company's employees.
You can also cast your nets all the way to specialized communities on Slack, forums, and discussions and connect with agencies directly.
Conferences, hackathons, and meetups
Tech-related and startup conferences and events like Web Summit, HLTH, or Slush are excellent venues for finding a potential offshore partner. These gatherings provide networking opportunities, face-to-face interactions with tech companies, and a glimpse into developers’ technical skills in action.
Outsourcing location as a core factor for hiring offshore development teams
The country where your development team is based can have a huge impact on the following key areas of your collaboration:
- Costs: Location is a key determinant of software developer rates, meaning it can impact your overall project budget.
- Time zone differences: If your business is a long distance from those countries, you might not have enough overlapping hours to sync with your external team — unless you are looking for the “follow the sun” type of collaboration.
- Cultural compatibility: Companies from low-context cultures may not be comfortable with collaborating with developers from low-context cultures. Cultural differences can crash projects due to different communication styles or business approaches.
Below, you will find a list of the most popular outsourcing hubs in the world in terms of hiring costs, talent pools, favorable business environment, and flexible tax landscape.
Central and Eastern Europe (CEE)
Over the last decade, the CEE region has become a digital heavyweight, with overseas businesses flocking to the location. Countries like Poland, Romania, Hungary, and others are home to the brightest developer minds with diverse skills and global expertise.
The region is also one of the world's leading ICT (Information and Communications Technology) exporters. For example, the export of ICT services in Poland amounts to 15.2% of the total export of services, indicating a significant IT workforce being concentrated there.
Hourly rates of offshore developers in Eastern Europe are what makes this region attractive for overseas companies. It may cost you somewhere between $40-$70 per hour to hire a skilled developer from Poland.
Eastern Europe also competes on convenient time zones, flexible culture, and a high level of English proficiency. For example, Poland is located in the GMT +1 zone, which applies to the majority of Europe and offers enough overlapping hours for other locations.
Asia
Asian countries, including India, China, and others, have also established themselves as an attractive outsourcing hub. Many Asian destinations feature low-cost economies paired with large candidate pools that promise to deliver your projects at a fraction of the cost. For example, hiring a dedicated developer in India will cost around $20-$50 per hour.
However, these countries might not suffice the needs of your high-touch activities due to the time zone differences and cultural barriers. In this case, you might need to send your internal project manager on-site to supervise the project and communicate your vision to the vendor.
Latin America
Latin America has become a hotspot for businesses seeking external tech partners. U.S. companies particularly favor the region due to its geographical proximity. Businesses are also keeping their eyes on Latin America as it offers an abundance of skilled developers at cost-efficient rates.
There, you may find a software developer for hire at a rate between $45 and $70 per hour. Argentina, Mexico, Colombia, and Brazil are among the most in-demand outsourcing hubs in the LatAm region.
Other crucial factors to weigh for offshore software development
When delegating your project to external experts, location and price shouldn’t be the sole factors. To find a suitable offshore development partner, you have to keep in mind other crucial elements, such as the specifics of your digital product, regulatory requirements, and more.
Technology stack and expertise required
To set up your offshore project for success, you should choose a development team that specializes in projects similar to yours plus has complimentary knowledge of other technologies. For example, if your startup is a healthcare application, you need an offshore development partner with a focus on healthcare mobile and web app development who is also proficient in advanced techs popular in digital health (AI, IoT, and more).
Finding this expertise in one place means that you won’t have to flit between the vendors and can get the entire solution developed within one team.
Team size
As a startup, you need an offshore development company that is not too small to be able to have your back during peak periods and not too big to provide a hands-on approach. A mid-sized offshore development partner can often strike a good balance between scalability, cost-effectiveness, and high-touch experience.
However, the perfect offshore development team size depends on the unique needs of your startup, including your project complexity, timeline, communication preferences, and other factors.
Legal and regulatory considerations
Before farming out their project to another country, startups have to study the regulatory and legal landscape of the outsourcing location and understand whether the local partner can ensure compliance and protect intellectual property. Also, we recommend choosing a partner that adheres to global data security standards such as ISO, GDPR, PCI DSS, and others.
Having a closer look at the local laws will also allow companies to consider tax implications, sanctions, or other limitations that can negatively affect the collaboration.
How to hire dedicated offshore developers: Step-by-step
Here's what an ideal collaboration workflow should look like when outsourcing your software development project.
Assess
To prepare detailed job descriptions, you have to be clear about your project objectives and the technologies your product will be based on. Also, you should assess your existing team’s capacity and identify gaps you can bridge with external expertise. Following those requirements, you should chalk out the skills your offshore developers need to deliver the product.
Besides the job description, you can also jot down your requirements in a product specifications document to facilitate communication with your prospective vendors.
Evaluate
After scoping your project and writing job descriptions, you can move on to looking for prospective offshore development partners. Once you shortlist three to five vendors from a preferable location, you need to evaluate them based on these criteria:
- Technical expertise — preferably, opt for tech partners with at least a decade of commercial experience.
- Domain knowledge — make sure your offshore development company has hands-on experience working in your niche (e.g., digital health startups can benefit from collaboration with offshore partners who specialize in healthcare technology)
- Skill sets — select partners with cross-functional teams who can build your solution from A to Z.
- Access to the latest technology — proven knowledge of advanced techs such as AI, IoT, and AR/VR is what differentiates the best from the rest.
- Information security requirements — verify that your vendor meets all relevant legal, governance, and regulatory requirements for information security.
- Adherence to documented processes — make sure your potential vendor places a great emphasis on documented processes, as these are essential to ensure transparency of the collaboration and seamless knowledge transfer.
- Testing mechanisms — ask your potential vendors about the code coverage they provide and whether they use a combination of automated and manual testing to ensure the high quality of the deliverables.
Besides these criteria, you should also pay attention to how your offshore development team sets up communication and whether they can provide timely and comprehensive responses to your questions from the very beginning.
During your first one-on-one with the potential vendor, set the context for your collaboration, share your product specs document, and ask them to come back with a product proposal. During intro calls, ask them about their workflow, communication channels, and pricing models, and discuss intellectual property (you should have ownership of the source code, product documents, and the IP of your product to avoid hard lock-in).
Before sharing any project details, make sure your offshore development vendor has an NDA in place.
Commit
Signing an Agreement and Work Order is the final leg of the pre-development stage. The agreement reflects the agreed-upon service scope and acts as a safety net for both parties.
Ensure the agreement has no gray areas, lists a clear and defined scope of work, and sets out the payment terms. After that, your outsourced team is all set to bring your product vision into reality.
💡Tip: you can compartmentalize your project before committing to a long-term project. By breaking down your project into smaller tasks, you can test-drive your collaboration and improve the chances of successful completion.
Onboard
To ensure a smooth transition and a well-oiled collaboration, you need to set up unified communication channels and decide on the project management tools. If you’re enhancing an existing project, make sure your offshore development team has access to necessary product documentation, including requirements, design specifications, and code repositories.
As for project management, dedicated offshore development teams usually come with a project manager. From your side, you can either supervise the team directly or provide an internal project manager.
💡Tip: get your offshore team into a workflow where they deliver a demo or a partially working product every one or two weeks to make sure you’re on the same page about your product.
How much does it cost to hire offshore developers?
The cost of offshoring software development depends on a wide range of factors, the location being chief of them. The seniority level of the developers, the pricing model, the timeline of your project, and other parameters can affect the final pricing. Ultimately, you should aim for the sweet spot rates ($50-$100) as these make sure your development team brings the right skills to the table without undermining your product quality.
Our team has analyzed popular job marketplaces such as Glassdoor, Indeed, and others to provide a breakdown of tech specialists’ rates based on the region.
| Tech specialist | North America | Eastern Europe | Latin America | Asia |
|---|---|---|---|---|
| Senior developer | $120-$180 | $65-$80 | $60-$74 | $30-$45 |
| Architect | $140-$220 | $70-$100 | $78-$90 | $40-$60 |
| Business analyst | $80-$150 | $50-$85 | $55-$70 | $35-$40 |
| Project manager | $97-$170 | $60-$80 | $60-$75 | $35-$45 |
| UX/UI designer | $80-$105 | $60-$90 | $49-$70 | $30-$45 |
| DevOps | $115-$150 | $74-$91 | $66-$82 | $31-$44 |
| Senior developer | $114-$170 | $53-$76 | $35-$59 | $49-$82 |
| Senior QA engineer (manual) | $112-$130 | $57-$65 | $51-$63 | $50-$70 |
| Senior QA engineer (automated) | $135-$165 | $65-$77 | $63-$75 | $31-$42 |
Why choose Orangesoft as your offshore development team?
Orangesoft is a professional web and mobile app development company with 13+ years of commercial experience. We are a team of 100+ problem solvers who provide strategic consulting and software development services to funded startups.
Here is what makes us a great technology partner for your project:
- An extensive candidate pool made up of qualified and vetted developers;
- Over 300 successfully delivered projects across multiple domains;
- Exclusive focus on healthcare and fintech startups
- Hands-on knowledge of regulatory compliance, including HIPAA, FDA, GDPR, CCPA, PCI DSS, and more.
- Adherence to best data security practices in accordance with ISO 27001;
- Full-cycle software development expertise that drives your project from A to Z;
- Calibrated workflows that put you at the center of all development processes;
- Transparent pricing with non-binding sourcing and interviewing processes;
- Ability to scale up and down your team on demand;
- Post-release support, maintenance, and consulting services;
Working with us, you get a team committed to bringing your project across the goal line — on your terms and in line with your requirements.
Get offshoring right the first time
Skilled software developers are a valuable asset for any budding startup or a maturing company. Scouting a development team in more affordable locations allows you to quickly build and deliver a high-quality product without sky-high costs.
But to hit it off with a vendor, you need to have a granular understanding of your project requirements and put effort into finding the right tech partner. Otherwise, you might have difficulties finding common ground with a vendor or might find the collaboration challenging due to your incompatibility.
Orangesoft supports your growth intentions with on-demand developer talent that does the heavy lifting of software development. We make finding the best-fit team of offshore developers from Poland for any project easy and safe. Contact us and get your project started.
