Chaotic. Characterizing 2020 as anything else is difficult. But within the disorder of an unprecedented pandemic, global protests, and economic upheaval, we have had glimpses of clarity that have changed how we view worklife. One of the more obvious ones is the realization that workers, especially software workers, can in fact do their jobs from home. It is not necessarily easy with families simultaneously sheltering in place in a shared space, but eliminating commute times and taking advantage of SaaS tools such as Google Meet, Zoom, and others help workers not miss a critical beat in the pulse of their organizations.
Working from home in 2020 has also taught us that geographical distances to work no longer matter. Software development productivity simply does not correlate highly with proximity to an office. Most managers today understand how to manage via teleconference. What matters is the people that comprise a team, the strategy that defines how to reach a company’s goals, and other fundamentals that support the business. And none of it has to do with location.
In this new paradigm, development leaders have optionality in where they find talent. Many are looking harder at outsourcing as it provides unique advantages to sourcing locally. Here are 5 key benefits:
Access to Larger Talent Pool
“Good ones are hard to find.” This is true for software development talent as the industry largely remains at full employment levels—especially in emerging and established technology hubs, such as San Francisco, Boston, Raleigh, Austin, and Houston. If looking for particular development skills, the job is even tougher. Outsourcing gives hiring managers access to a large talent pool in a market where there is less demand and consequently lower wages and employee turnover. The only difference is physical distance from the office.
Greater Productivity
“More hands on deck.” Cycle time, velocity, quality, delivery, and others are frequent measures of development productivity. There are many ways to influence these areas, but one clear way is just to have more resources devoted to them. Greater development and testing capacity mean more at the end of a sprint and ultimately faster time to value for software users. For in-house development efforts, this means higher likelihood of meeting project and service level commitments to other departments. For independent software vendors, companies see quicker time to revenue and the potential for higher price points.
Reduced Low-Value Workloads
“Work smarter, not harder.” Finding talent is time consuming. Development managers either incur high opportunity costs posting jobs, reviewing resumes, and interviewing applicants, or they pay high commission rates to recruiters to find qualified candidates. In the event that an employee proves a poor fit, the cycle starts all over again. Outsourcing places the burden of finding, retaining, and replacing (if necessary) talent completely on us—at no additional cost. Sure you have the option to interview resources before joining your team, but more than 90% of the time the resource offered is a fit. This lets managers focus on what is most important, developing software at scale.
Increased Pace of Innovation
“Keep your hands on the wheel.” Outsourcing allows managers to reallocate senior team members to higher value, more innovative projects. The outsourced resources can be utilized to maintain existing software—this might include fixing bugs and working on assorted customer enhancement requests.
Lower Labor Costs
“Why pay more?” This point cannot be iterated enough. Outsourcing can provide significant cost savings or enable greater productivity within a budget. Not all outsourcing provides the same savings as labor rates have increased with rising demand in popular hubs, such as India and the Ukraine. Countries in Latin America, such as Colombia, are established destinations for outsourcing and significant labor rate advantages—approximately 70-75% over U.S. rates—and are forecasted to remain so for years to come.
