3 ways to extend your software development team

Ihor Feoktistov
Ihor Feoktistov
CTO at Relevant Software
Jan 2, 2019 10 min read
Remote teams
Remote teams Jan 2, 2019 10 min read

Let’s imagine your business idea is well-validated and put to real life. It performs impeccably thanks to perfect planning and well-organized software development dedicated team efficiency. Your software engineers work hard to make your software product function so it’s a picture perfect. Almost. With the business growth, the volume of development of the solution grows accordingly, the marketplace or customers, or investors demand actual results and here you have to face another challenge – you need more people on board to stimulate your development and achieve the stated goals. It’s no secret that it’s all about having the very right people as the core element of any project successful outcomes.

When a few developers are the case then it’s business-wise to recruit them and have them work in-house. But how about the situation when scaling up your dedicated team of developers is crucial for the business and you need some considerable capacity increase in terms of expert human resources. Hiring freelance software engineers or outstaffing might be a way to help you out. Oftentimes outsourcing models as outstaffing and outsourcing are taken as interchangeable terms. It’s not quite so.

Outstaffing or Outsourcing

Though both outsourcing and outstaffing presuppose engaging remote development engineers for your project there is a difference.

If your company needs an extended team model (ETM) and you opt for outsourced team model than you entrust the project or its components to a remote vendor development company-partner. That will be the partner that will hold the responsibility for delivering the project within the requirements scope, time and budget. The outsourcing agency takes all the concerns connected with the working routine and core team organization, including salaries, payments, etc. Here, in the very essence of the cooperation lies the successful and required completion of the particular project or its module. The collaboration might also include support and maintenance by the extended team based on the contract provisions or it just stops upon the project closure.

outstaffing or outsourcing

Outsourcing works well as a solution for engaging additional R&D capabilities to explore new directions and produce extra required solution development for which the company lacks resources. In this case, outsourcing custom software development to the extended team will allow speedy implementation and smooth time-to-market taking the burden of extra time and resources for combining the team and researching the technology.

We have previously researched the benefits of outsourcing your software development in the context of hiring freelance developers or offshore software outsourcing companies in our blog.

With outstaffing as a cooperation model, the extended development teams act as an integral part of your organization and work along with your main team. The team management is on your side and the developers do not necessarily refer to a particular project. Though there is no unified definition of the extended team model and various companies offer variations, outstaffing proved to be a well-established model for companies already engaged in the IT industry. Aiming to extend their core development team with the project or capacities growth, the companies hire the remote employees to join the team model to work on the projects or software solutions that the company is building or planning to develop.

The concept of outstaffing as adding the missing elements as the extended development team has been long since recognized beneficial. Today we will dive deeper and compare the 3 methods of team extension by outstaffing, e.g. extended team as a service, inhouse hiring and freelance developers hiring offered by agencies, software and IT vendors.

Extended team as a service by Outstaffing agencies
Careful choice of the partner – outstaffing vendor company, proved to be beneficial for numerous enterprises and startups within software development business. How does this extended team model work exactly? There are several constituting elements as with any other business aspect. Primarily, it requires solid partner portfolio and careful destination consideration. Then, it takes exhaustive step-by-step process establishment, including legal and financial aspects, which are normally proposed or advised by your future partner. This whole complex is most likely to result in productive and smooth development processes, timely and quality project outcomes and successful meeting of business goals bringing ROI.

With a well-crafted extended team model (ETM), you have every chance to hire professional software engineers performing and producing actionable results alongside your development team, while most of the administrative costs will remain with the agency providing the outstaffing services.

Leaving behind the cooperation peculiarities there are numerous benefits of such a team extension

Cost optimization is the driver
With the focus on quality and exclusiveness of one’s own solution or product and taking into account all the pros and cons of the whole variety of cooperation models, every business has costs efficiency and ROI in mind. Partnering with the professional outstaffing agency you can get access to the whole pool of highly qualified personnel at the offshore/nearshore destination with no overheads. Besides, the administrative issues like taxes, office provisions, benefits, recruitment hassle, etc. are also taken care of. One more important point of consideration is the security issues. In the data-driven environment, security plays a crucial role for the success of the project no matter the extended team model. The outstaffing agencies make sure the compliances and regulations are followed and adhered to within this development model. The beauty of the situation is that the required extended development team resources are, in fact, the employees of your company.

Global talent pool reach
The well-coordinated cooperation with the agency providing outstaffing services to extend your team also means that you have an immense reach to the professional developers in the destination country. This simultaneously means leveraging the best value-for-money opportunity.

Being one of the top outstaffing software market performers, we have researched the advantages of hiring software programmers from Ukraine illustrating the ways for you to rely on the best options at reasonable costs and quality extended team development services.

The best talent screened and picked
The respected and established outstaffing agency makes it a point to fulfill a careful selection of the software professionals making the best matches of the candidates to your vacancy requirements. This obviously saves both your and your team’s time and money allowing to concentrate on your main business tasks. You can and welcome to take an active part in the hiring procedure like screening and interviewing potential candidates in order to make sure your demands are met and the new team members can potentially assimilate within your environment, but your efforts are spared by the agency doing the backstage job of active search, preliminary and tech interviews, etc.

Flawless onboarding and pain-free termination
Scaling your core team up or down is often a cumbersome process in terms of assimilation, policies adjustments, internal regulations, etc. Outstaffing agencies spare your efforts here – you can modify your core extended team without worrying about any unemployment compensations. In case the software professional’s skills are not needed on the particular project anymore, the agency takes proper care of the resources by re-assigning them to a different project or offering other opportunities or just keeping them “on the bench”.

There are some relevant arguments against outstaffing your project with the help of the vendor company.

Management complexities are stated as one of the main predicaments when cooperating with the agency. Facing some managing difficulties can be a case sometimes with the distributed teams but adhering to standard business environment regulations and prior discussed management methodologies are always the way to settle some inconveniences. In the majority of situations, all this is contract-regulated with the best practices established, so normally this is settled down easily and painlessly.

Cultural diversity is sometimes considered a hard dilemma for outstaffing as an extended team model option. The 21st century is all about cultural diversity, so with the proper routine organization and business processes planning those are going to be eliminated. On the positive side, there is also a fact that outstaffing agencies in Central and Eastern Europe mostly adopt the US or EU corporate culture trends while introducing some quite interesting and engaging authentic cultural traits.

In-house hiring

In-house hiring is the very logical model of adjoining a needed skill set to your existing internal team without too much of a hurdle simultaneously preserving strategic competencies completely in-house. This works well in case if not a massive team extension is needed offering quite a lot of advantages:
in-house hiring

Improved management and administration
Having your team work together side by side in the same office makes it a lot easier to manage their daily activities and control the work process in order to proactively respond to issues or follow the everyday processes.

For example, in a force majeure situation, the management is fully aware of the in-house team presence or emergency cases. So, the decisions can be made a lot faster and the impact is less stressful on the overall business processes.

Smoother continuous communication
Communication is more effective when the colleagues are physically present and can really express themselves. It reflects both soft skills or professional communication.

As an example, in case of a meeting need or urgent issues discussion, it’s a lot more comfortable to get the team together, or they can discuss some crucial moments right at their workplace. It spares time and effort of setting up communication channels, additional tools, one can just come up to the working place and share the thoughts

Positive team environment and atmosphere
It’s not a secret that the overall office atmosphere is not exclusively gained due to work-related communication. A workplace is about human communication, establishing simple relations and unlimited general connections within the team and inside the office. The whole collection of everyday activities impact the general productivity of the employees profoundly.

The people working together in the same office often become friends with their colleagues or even relate. Shared lunches, joined collective movie visits, spending time together or a gym after work create stronger bonds between them and positively influence their work results.

The benefits of using an in-house model for team extension are pretty obvious, but there is another side of employing such a model. Among the significant factors are

High costs.
Cost efficiency is probably one of the driving factors of business growth. In-house employment implies all the basic and in most cases much more perks and benefits for the newly-hired employee. Income policy is one of those determinants influencing in-house employment decisions. Even if renting or buying a larger office space is not required, there is still a need to provide the workstation for the new colleague, to say the least. And then, there are paid vacations, sick leaves, mobile phones, lunches and many other things companies use to attract employees as the job market dictates its rules.
In the US, for example, the paycheck of a software developer can reach as high as $100,000 per year. Of course, the salary of an in-house employee include all periods when he/she is lawfully absent from workplace, like a vacation, sick leave or public holidays.

Lengthy hiring process.
Hiring a development professional to join your in-house team is the process which can takes much time and additional expenses. Simply put, you will need to post vacancies, monitor the response, utilize the job platforms, engage extra sources for finding the right candidate fitting your position. This, in its turn, is the job for an HR or recruitment professional on a payroll capable of validating the candidate, holding interviews, tests, etc. Going further, testing a software developer usually includes practical skills testing, generally attended by your team lead to verify the required skill set. Unfortunately, it often happens that it is a repeated procedure in order to find the professional for your project needs.

Complicated termination.
A full-time in-house employee is usually protected by a lot of labor laws. If you decide to reduce outsourced teams again for whatever reasons, you will not be able to terminate their contract at any time. Even if you do terminate the contract, the dismissed employee is still entitled to unemployment benefits.

Hiring freelance developers

The phenomenon of engaging freelance software development professionals is gaining more popularity nowadays. The businesses worldwide, and especially startup companies recognize the advantages of remotely working independent software developers as extended development teams. The advantageous remote working routine is considered the most attractive in the model, there are more benefits that the company receives when hiring freelancers. Among the most prominent ones are:

Expenditures decrease
This model is probably the most efficient in terms of cost elimination. The company does not need to think of workplace provisions, no need to expand the office space; a freelance development engineer uses his/her personal material resources, even tools or software licenses. A customer receives ready-to-work brainpower without investing much.

Lower rates
Customarily, a freelancer works on an hourly rate basis rather than a monthly salary. Truth to be told, a highly qualified freelance software developer hourly rate might be higher than that of an in-house developer, but the customer does not cover freelancer’s social benefits, vacations, sick leaves, etc., only the actual project engagement time is paid for.

Access to the international knowledge base is another benefit of hiring a freelance software engineer. Geography is not the determining factor when opting for the model, the customer can find freelance software professionals in any country based on their professional skills and expertise levels as the only criteria. And again, the offshore extended development rates are often lower than those in the USA or the EU, so hiring top developers at relatively moderate costs is a viable option.

Problem-free termination
A contract-regulated agreement with the freelance development professional generally takes care of the employment provisions, so termination options are documented and can be easily followed in case of necessity. If the freelancer’s work quality is unsatisfactory or your project terms alter, the client can terminate the contract with no further obligations.
However, hiring freelancers implies also some disadvantages:

Complicated team management and communication
The distributed team requires extra managerial efforts. Different time zones, locations, communication tools etc. can impact the work flow and sometimes it’s difficult to have it all coordinated. At the same time, by utilizing tailored approaches and proper management methods the productive atmosphere in the remote team is achieved pretty easily.

Some also claim that cultural origins and background impact the working style in a negative way. They do influence the way people make decisions, organize their work, respect deadlines, treat their colleagues, but when structuring a team operations according to certain rules and best practices, the necessary efficiency, and a healthy work climate is reached without much of a hassle.

Security issues
It is often claimed that working with a remote freelance subcontractor is not safe in terms of keeping the organization’s vast data pool secure and protected unlike in the office setting where the IT staff can monitor the data security. Again, there are actionable strategies and policies like limiting vital data access, multi-step authentification, safe virtual storage in the cloud, etc. so that your non-disclosure information can be controlled.

Lower motivation
One can not expect freelancers to have high motivation and a drive for client’s product advancement. Their remote position does not make them automatically committed to the overall company’s success. But when the freelancer is well-chosen and he is a professional in what he does pair with broader engagement in the company events, he/she strives to perform well and become a part of the team.

On a final word

In the era of total globalization, the physical distance does not matter that much. High-speed communication channels alongside personal approach enable great connection of the software development professionals and their customers where they have every possibility to use skills and knowledge to make the projects successful. And the tech companies are able to find the best software engineers within a reasonable budget to fit their business needs.

Relevant Software is a company that has been in the business long enough to provide outsourcing and outstaffing software development services with the best results.
If you are struggling to make your idea work embedded into a perfect project, our experience is at your disposal. 
Contact us to see how we can help you out.

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