How to Hire an Offshore Dedicated Development Team

Wondering if an offshore development team is right for your software project? For many businesses, hiring offshore can boost expertise and reduce costs. We are a software development company that provides development services for startups and enterprises worldwide. As an offshore development partner, we help our clients build high-quality products faster, smarter, and more affordably.

In this guide, we cover:

• What offshore dedicated teams are
• Benefits of offshore development
• Key considerations before hiring offshore
• Common offshore hiring challenges

Whether you’re a startup or an enterprise, this will help you evaluate if an offshore team fits your needs.

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What Is An Offshore Dedicated Software Development Team?

An offshore dedicated software development team is a group of developers located outside the startup’s home country, responsible for building and maintaining its digital products.

Here’s a simple example: the US-based startup outsources its product development and decides to hire a dedicated development team in Ukraine.

While the term “dedicated development team” refers to a long-term, committed team of external developers, the word “offshore” highlights the geographical difference. This setup allows startups from high-income countries to access skilled talent at more affordable rates in countries with lower living costs.

In fact, a Deloitte outsourcing survey shows that 72% of startups prefer to work with skilled offshore developers over hiring in-house developers. This demonstrates a clear shift toward this model.

Why Consider Hiring Dedicated Offshore Development Team?

Offshore software development teams offer startups access to over 26.9 million software developers worldwide, as opposed to being limited to only developers within their locality. It’s the best option for startups that want to build a great product at the best price obtainable.

Let’s explore this IT outsourcing model further:

1. Lack of In-House Expertise

Startups’ failure rate is 90%, and 23% of those failures are caused by a lack of expertise.

By embracing the offshore outsourcing model, you can easily leverage a software development agency’s talent network to fill a knowledge gap in your startup. How so?

For example, you’re willing to build a solution to key into the metaverse marketplace. Such innovation requires a developer fluent in Web3JS, a language with just 18,000 developers around the world.

Most offshore development teams have a Web3 JS developer in-house or on call. As such, you can fill the knowledge gap without undertaking a cumbersome recruitment process.

2. Access to Global Talent

IT outsourcing agencies give you access to a larger pool of talent than on-site staffing. This is particularly important for the existence of Silicon Valley-based startups.

Most California-based developers are employees of tech giants. They receive bogus salaries and attractive perks and are comfortable with their current employers. However, this is a challenge for startups since most of them can’t afford a salary scale that’s on par with tech giants.

On the contrary, offshore countries like Ukraine, Hungary, Romania, Belarus, and others in Eastern Europe are full of skilled developers who would readily join your development project. Examples of startups currently doing this include Fab, SeatGeek, and AppSumo.

Check out the best countries to outsource software development for the top choices.

3. Faster Scaling and Flexibility

Scaling your in-house team to conform to a dynamic project scope or stage can be challenging.

Especially for startups domiciled in nations with restrictive hiring and downsizing laws. The good news is that offshore outsourcing is flexible, and you can increase or reduce your team size without recourse to any law preventing that.

If your project is still in its project discovery phase, your project blueprint is susceptible to change. Most vendors take note of this reality, and they have a standby team that you can easily call upon.

4. Cost Savings

37% of startups fail due to a lack of money. However, you may avoid this problem by partnering with the right offshore development team.

Offshore outsourcing offers one of the most effective ways to save on the cost of software development. This is because the cost of hiring a software programmer varies with location.

Developer rates in offshore countries are more reasonable than those of American and Western European programmers. Hiring a dedicated workforce from India, Latin America, or Eastern Europe is often twice as cheap as the US, the UK, and Australia.

For example, the cost of hiring a software developer in the US is $100-$ 150 per hour. However, opting for a Ukraine-based developer of equal tech skill will cost you $40-$80 an hour.

Key Considerations Before Hiring Offshore Dedicated Developers

When you hire dedicated offshore developers, success isn’t automatic. To get the best results, you need a clear understanding of your project goals, well-defined deliverables, and a realistic budget that matches the scope of work.

1. Define the Project Scope

The crux of your interaction with the offshore team will be ensuring you have a perfect product. However, this is unattainable without a good knowledge of your expected deliverables.

First, identify your product type. Is it a web app, a custom website, a mobile app, or a WordPress website? The option you opt for here will, in turn, determine the tech stack you’ll need.

Considering custom WordPress website development? We explain the benefits and what it takes to get started.

Some offshore companies have a team of professional developers specialized in each project type. There are also developers for each type of startup. So, it’s best beforehand to communicate these salient details to a preferred vendor.

It makes it possible to hire a dedicated web development team or, for example, hire a dedicated mobile app developer, which perfectly suits your business goals.

2. Choose the Preferred Team Structure

Now that you know your expected deliverables. Which type of team can best build and maintain your dream platform?

Would you rather have a workforce of industry experts? Or a reliable technical partner? Or perhaps you are looking to hire a technical co-founder who will take care of choosing the team with the right technical expertise?

• A team of industry experts brings deep strategic insight to your product development. They can help you define the best approach and long-term vision. However, building a team primarily made up of senior experts can be costly.
• Execution-focused teams, or “doers,” are fast and efficient. They excel at building products based on clearly defined requirements. But they rely heavily on your input during the discovery phase, as they typically don’t shape the product vision themselves.
• A reliable technical partner strikes a balance between the two. They combine expert guidance during the discovery and planning stages with hands-on developers who bring the product to life according to the approved roadmap.

Each option varies in terms of involvement, management style, deliverables, and overall cost. Choosing the right one depends on your current needs, resources, and technical maturity.

Another choice is opting for an offshore team that handles retention and hiring but doesn’t manage the developers. Here, the crux of management lies solely with you.

To guarantee that you have your desired team, you’ll need to vet each developer you’re the vendor provides. Non-technical founders should hire a CTO for this.

3. Set Budget and Deadlines

Unless your budget is unlimited, a scenario that’s highly unlikely for startups, you should clearly communicate your deadlines to the team’s business analyst and project manager.

Discuss expected functionalities and features during the meeting. And highlight the timeframe for the completion of each feature. Mode of engagement and regulatory requirements are also salient points to discuss.

At the end of the meeting, there should be an agreed-upon expense for each milestone, payment methods, and schedule.

Once both sides have agreed on the above information, the next step is assembling your offshore development team.

Typical Offshore Team Structure

The configuration of your development team depends on what you’re trying to build. For example, if you’re building an AI software, you need to hire AI developers.

If interested, you can see the numbers behind the AI revolution in our latest article on AI statistics.

For illustrative purposes, we’ll create a checklist of team members for a typical app with basic features:

• Product manager
• Project manager
• Business analyst
• UX/UI designer
• Back-end developer
• Mobile developer or front-end developer
• Quality assurance tester
• DevOps engineer

Non-technical founders may be aloof to the meaning of each role. Thus, we’ll explain what they entail:

Role	Description
Product manager	The product manager gathers and prioritizes the customer requirements for the product. As part of project management activities, they also ensure that the product’s vision is achieved by working closely with the support team.
Project manager	Project managers ensure the development process is completed on time and within budget.
Business analyst	The business analyst creates an ideal business requirement for the product. These requirements form the logic for the product’s features.
UX/UI designer	A UX/UI designer researches and evaluates technical requirements from the business analysts and the project manager. They then design a suitable User Interface that aligns with project expectations.
Back-end developer	The back-end developer is a programmer who writes the code for the server-side database. This code is the basis on which every functionality in the application lies.
Front-end developer	The front-end developer implements the User Interface Design of the UI/UX designer. They also create actionable buttons for users to interact with.
Quality assurance tester	The quality assurance tester validates the efficacy of the application and suggests any design, business logic, and code improvements.
DevOps engineer	The DevOps engineer oversees the code releases. They build, test, and maintain the infrastructure needed for optimum software development. Check out our DevOps services to learn more about our DevOps practices and tools.

Offshore Team Collaboration Models

There are three prominent dedicated developers team structure types: extension, project-based, and dedicated team.

Each has its pros and cons. Before choosing your preferred option, it’s essential to first consider the project’s complexity, time, and budget, and then select the most suitable option.

Marketplace Development

1. Dedicated Team

A dedicated development team is a group of experts assembled with a primary aim to develop and maintain software.

This workforce comprises many experts assigned to distinct roles that border on designing, developing, and maintaining the software.

According to the stipulated methodology, the team works full-time, just like your in-house workforce. The only thing here is that they’re located offshore.

Their project deliverable depends on the requirements of the discovery phase.

The dedicated team outsourcing model is best for:

• Startups with enough funds and an aim to capture a target market quickly;
• Startups with plans to engage in a long-term project;
• Startups that need a robust team but lack the time to set up an in-house team;
• Startups or scale-ups whose in-house workforce lacks the expertise to develop complex functionality.

2. Team Augmentation

IT staff augmentation is an outsourcing model that includes adding lacking expertise from a vendor’s team to your in-house workforce.

This approach ensures that specialized features are developed efficiently, within your existing internal processes. For example, if you need a developer with machine learning expertise in React Native, you can hire dedicated React Native developer through a trusted vendor to support that part of the project.

Staff augmentation helps you fill skill gaps without the time and cost of hiring full-time employees. It’s also more cost-effective than hiring local talent, especially when working with offshore developers.

This model gives you full visibility into your team’s workflow without the burden of recruitment. You stay in control of the project direction, while the vendor handles the talent supply.

3. Project-Based Staffing

This outsourcing model entails hiring an outsourced team to work on specific functionality within a software. What does this mean?

Take, for example, your plan to create a FinTech app. This consists of multiple functionalities: payment features, API integration, authentication, etc.

Although your in-house team may create other functionalities, you may hire a vendor’s workforce to build the payment feature due to its complexity.

This teaming type is best  for startups and scale-ups that need:

• Quick feature for deployment;
• Cost-efficient quick-fix solution;
• A resource and skill-demanding task.

However, it’s worth noting that the options above aren’t suitable for offshore development outsourcing alone.

We’ll help make a detailed comparison to offshore outsourcing – this way, you can make the most suitable choice.

Offshore Development Vs. Alternatives

There are many alternatives to offshore outsourcing. Before you hire an offshore development team, you might first consider the alternatives to this model. Let’s dive right in.

Offshore vs. In-House

A dedicated in-house team is a workforce of developers broken into teams, where each handles different projects.

Hiring dedicated developers means that every specialist in your team is employed, managed, and paid by you. This model allows startups to have control over the workflow and helps to synergize communication among team members and the management.

Pros	Cons
Developers have a better feel for the project and can make modifications quickly. Work crises are better managed, as there are in-house mechanisms for checking that. Stricter compliance laws. The product’s source code belongs to the startup, ensuring that the founder has complete control over the project’s outcome.	Its recruitment process is time and resource-demanding. The startup must have a system to ensure prompt salary payment, create a conducive workplace, and provide welfare packages.

Offshore vs. Local Agency

A local development agency is a dedicated team of outsourced developers located in the same country as the startup — for example, a US-based startup outsourcing its development and maintenance to a US-based software development company.

Pros	Cons
Communication is seamless as both the startup and the development company operate in the same time zone. Both the startup and vendor operate within the same legal jurisdiction. As such, a breach of contract can easily be filed in court.	Local agencies are costly to hire. So costly that you’ll need an unlimited budget to form a long-term partnership with one.

Offshore vs. Freelancers

The difference between hiring freelance developers worldwide and working with an offshore development team can be subtle.

Freelancers are often offshore, especially when you’re looking for cost-effective talent globally. However, unlike an offshore development team, freelance developers typically juggle multiple clients.

This means they might not be fully dedicated to your project, and there’s always a risk they could drop out without warning.

In contrast, an offshore development team is usually hired through a vendor or a software development service. These teams are fully committed to your project, follow structured workflows, and offer more reliability and long-term support.

Pros	Cons
Freelance developers have experience working on diverse projects to offer deep insight into the product. They’re a good option for one-off complex projects.	Freelancers only maintain short-term commitments to projects. It’s difficult to properly synergize the activities of a freelance team as they might be in different time zones.

Best Countries For Hiring Offshore Development Teams

The software can be developed anywhere. Thus, you can hire an offshore team from any location around the world.

However, some countries have the infrastructure and quality human resources to make them one of the best offshore development centers in the world. Let’s explore them.

1. Latin America

Latin American nations like Argentina, Brazil, and Mexico are the best options for sourcing offshore software developers in the region.

However, Chile is also making significant strides in the sector, currently ranking 27th among nations with the most skilled programmers in the world.

Pros	Cons
Outsourcing to Latin America gives you access to a large talent pool of about 1 million developers. It has a minimum time zone difference with American startups.	It’s more expensive than other outsourcing options. For example, outsourcing to Latin America costs between $40 $60. However, outsourcing to Eastern Europe only costs between $35 $50.

2. South Asia

Asia may have the highest concentration of developers in the world. As it stands, the region has 7 million developers, with India alone accounting for 5 million of them. Other outsourcing nations in South Asia include China, the Philippines, Vietnam, and Bangladesh.

Pros	Cons
South Asia has the largest pool of programmers in the world. As such, you have varying options to choose from.	Software products from South Asia are of poor quality compared to applications built by software engineers in Eastern European nations.

3. Africa

Africa offers one of the cheapest means of hiring offshore developers. Offshore developers charge a paltry sum of $20 hourly in Kenya, Morocco, and Egypt. However, South Africa and Nigeria cost $40 – $50 an hour.

Pros	Cons
The low software development rate High development speed–especially for simple jobs that require just a few tech stacks.	Africa has a low number of developers, leaving your startup with few options to choose from. Africa has a poor infrastructure for outsourcing. For example, Nigeria has a broadband speed of 13.45 Mbps, while Ukraine has 25 Mbps. This can hinder internet communication. Cultural differences between most African and Westerners are high.

4. Eastern Europe

Eastern Europe has a cluster of some of the best software development companies in the world.

Developers in this region have broad commercial experience and understand diverse programming languages, among which are JavaScript, Python, Node.js, and Java.

Eastern Europe has nearly 1 million developers, with hourly rates ranging between $35 and $50 per hour. The exact figure is determined by the developer’s experience, skills, and project complexity.

The most prominent outsourcing destinations are Ukraine, Belarus, the Czech Republic, Bulgaria, Serbia, Slovakia, and Poland.

Here are the benefits and disadvantages of outsourcing to Eastern Europe:

Pros

Cons

Software engineers based in Eastern Europe don’t charge as much as those in the USA. Their low rates don’t impact the quality of work. Ukraine is in a time zone that overlaps with parts of New York’s work time. Most European nations also have a work time that overlaps with Ukraine. Most offshore software engineers are fluent in English. As such, communication with English-speaking founders is fluent. There’s a law about intellectual protection in Ukraine that protects copyright for databases and computer programs.

The taxation system in some countries in Eastern Europe may confuse offshore clients. The time gap could also be an issue for customers based in Australia or California.

From the information given above, it’s imperative to conclude that outsourcing to Eastern Europe is the best option.

Nations in this region balance out cost-effectiveness and competency. This is partly due to its relatively low cost of living and the nation’s tech-friendly infrastructure.

How To Hire An Offshore Development Team

Below is a breakdown of 3 important steps to hiring offshore tech companies:

Step 1: Find Team Candidates

Finding a good workforce is easy when you know the right place to search.

First, identify platforms that connect you with skilled freelance developers worldwide or offshore development vendors with proven experience. Websites like Clutch, Upwork, and LinkedIn are great places to explore portfolios, reviews, and past projects.

You should also look for industry-specific communities or ask for referrals within your professional network. Make sure to shortlist candidates based not just on technical skills, but also on communication, availability, and cultural fit.

Step 2: Select the Best Fit

To determine the best, clearly outline your project requirements and partner with a CTO to select the team that can deliver. Use platforms like Clutch and Good Firm to research the company’s pedigree.

A team to partner with is one whose project portfolio suggests experience and has the perfect component for what you plan to build.

Step 3: Finalize Agreements

Now that you’ve established communication with a preferred team, the next step is to formalize your agreement by signing the requisite documents for legal backing.

Now that you’ve identified a preferred software development agency to partner with, you should draft a mutually beneficial contract and sign a non-disclosure agreement.

Let’s dig more into what this entails.

Sign a Non-Disclosure Agreement

To prevent legal backlash, data leaks, and copyright protection, it’s imperative to sign an NDA.

A Non-disclosure Agreement is a document binding the vendor and every team member from disclosing details about your product to a third party.

Get a Detailed and Transparent Contract

The contract you sign must spell out the following:

• Hourly rate with a detailed breakdown of the estimated timeframe if it’s a project-based contract
• Discounts
• Payment protocols
• Credit periods
• Warranty conditions

Is outsourcing all that easy? Definitely not. We’ll discuss some challenges it entails below.

Challenges With Offshore Teams

There are numerous challenges to hiring an offshore software team. Here are some noteworthy challenges.

1. Multiple Vendors

The abundance of software development companies in popular offshore markets can prove to be a challenge. It’s hard to choose the most suitable one out of many options.

To make this easy, you might want to read the section above that teaches that.

2. Time Zone Differences

If you outsource your mobile app development to another time zone, you may find it difficult to synchronize your in-house workforce and the offshore team.

However, this may be an advantage in some instances. For example, if you’re based in New York and you have a Ukrainian offshore team. It means your Ukraine–based workforce would be ready to have lunch when you wake.

This means they would have completed some tasks before lunch, ready for review.

3. Cultural Gaps

Westerners may find some cultural differences serving as an impediment to smooth workflow. To overcome this, you might opt for a Ukrainian team, as they have similar practices to those of Westerners.

4. Limited In-Person Interaction

You’ll have some communication barriers with your team members. However, there’s a solution: you may occasionally visit the offshore team, which is more applicable for nearshoring. Another solution is holding regular video conferences using collaboration tools like Skype, Google Meets, or Zoom.

Ready To Hire Offshore Development Team?

Hiring an offshore dedicated development team can be a strategic move to access top talent, optimize development costs, and spare some time to focus on core business activities. However, finding the right partner is crucial.

At SpdLoad, we have 10+ years of experience building and managing high-performing offshore teams for startups, agencies, and enterprises.

Whether you need to prototype an app, build a complex platform, or simply extend your in-house capabilities, we have the expertise.

Schedule a free consultation to explore how an offshore development team can empower your initiatives without the typical headaches.

Let’s chat about how we can translate your ideas into reality.