Outsourcing feature development to one remote software engineering contractor can be a blessing with lower costs and fast team expansion. But more often than not, software houses generate more problems than they solve. Learn to test foreign providers and check if the return on investment (ROI) is in your favor.
Pros and Cons of Using Remote Software Engineering Contractors Directly vs. Through a Staffing Agency
Decision-makers often grapple with the choice between engaging directly with remote contractors or leveraging the services of staffing agencies. Both models offer distinct advantages and challenges. Direct engagement provides more control and customization, while staffing agencies streamline the process. Here is a quick comparison for CEOs, CTOs, and CPOs, aiding in strategic decisions for optimal outcomes in software development endeavors:
|Direct Remote Software Engineering Contractor
|Staffing Agency for Remote Software Engineering
|Quality of Candidates
|Direct control over vetting and selecting candidates
|Rely on staffing agency’s screening and selection process
|Time to Fill
|Direct involvement in the hiring process, potentially faster
|Agency streamlines hiring, reducing the time to fill positions
|Flexibility and Customization
|Greater flexibility to customize contracts and adapt to business needs
|Limited customization, as agencies often have standard contract terms
|Direct management responsibility; may require internal resources
|Agency handles management tasks, reducing the need for internal oversight
|Hidden Costs and Time Zone Challenges
|Potential timezone challenges and hidden costs if offshored
|Agency may provide candidates from diverse locations, potentially mitigating time zone challenges
|Cost Efficiency and Overhead
|Potential cost savings, but internal management overhead may increase
|Higher cost due to agency fees, but reduced internal management overhead
|Contract Flexibility and Termination Fees
|More flexibility in contract terms, potentially shorter notice periods
|Contracts may have longer terms and termination fees
In addition to the nuanced evaluation of pros and cons, another compelling advantage of engaging through a vendor is the enhanced risk mitigation it offers. Holding a company accountable for deliverables is often more straightforward than managing individual contractors, especially when working across borders.
These companies serve as a reliable buffer for co-employment risks, providing a structured framework that ensures compliance, security, and contractual obligations. This strategic layer further contributes to the overall risk management strategy, assuring CEOs, CTOs, and CPOs of a more robust and secure partnership in the realm of remote software engineering.
4 Key Questions You Should Ask
Four critical questions emerge to guide strategic decisions. Delve into the nuances of quality, time efficiency, flexibility, and contract terms. The answers to these ensure a favorable return on investment.
1. What Impacts ROI When It Comes to Outsourcing Software Engineering?
There are usually two ways to go. Software houses deliver projects, while staffing firms provide engineers.
- For the first, are deliverables up to your standards and deadlines? If you can’t deliver the desired product to your users, you lose competitiveness.
- In the second case, what’s the time to fill and the quality of candidates that you end up getting referred to you?
If you’re constantly having to lower the bar, you will strain your internal team. Either by an added effort towards ramping them up, or making up for bug fixes and so on, they won’t be able to perform properly. Making up for low code quality is a no-no.
Lastly, if your contractors aren’t flexible with what your business needs, you might find yourself bound to a strict contract. This means that even if you’re not satisfied, you will lose the budget with contract termination fees.
2. Is A Remote Software Engineering Contractor Worth the Investment?
Do you need middle management or mediators of any sort to meet satisfying service levels? If so, you are actually transferring the costs. You pay less for the provider, but your internal leader is left with two options:
(a) To put in more hours to manage your remote software engineering contractor; or
(b) Remove themselves from actually managing your team.
If you are having too many setbacks by having to work within specific conditions established by your contractor, they might not be the partner you actually need.
In the case of staffing firms, it is important they get your candidates submitted on time. Moreover, they are actually good fits that have been properly vetted. Otherwise, you end up wasting time with bad interviews.
3. Does Time Zone Matter?
Simply put: you have a solid overlap. This means you can probably skip the middle manager, promote interactions between teams, and react faster in case of downtime. If your remote software engineering contractor is located in Africa, Eastern Europe, or Southeast Asia, you might be dealing with hidden costs innate to offshoring:
- The increased need for alignment between teams;
- Overtime and meetings out of working hours;
- Longer downtime and time to recover;
- The strain on people and process management.
That is why many American companies have turned to Latin America as a source of stronger service providers. Nearshoring means service fees are still attractive, but there are no timezone-related annoyances to deal with. Product development culture and service quality levels are also closer to US standards.
4. When Should I Go Looking For a New Service Provider?
If you realize it makes sense not to be bound to a contractor by long contracts, look for companies that work with annual agreements and monthly fees, having the flexibility to cancel with short notice and no fees. You will probably find it is smarter to count on a remote software engineering contractor that has more of a tailored approach and service. Look for those that work with Master Service Agreements (MSA) and Statements of Work (SOW) that assure service standards, proprietary rights, security, confidentiality, and other relevant warranties.
Curious to know more? Let’s have a chat!
Where to Search for Potential Providers
Embarking on a quest for the ideal remote software engineering contractor demands a strategic search. Each avenue offers a unique lens to identify potential providers, providing a comprehensive view to make informed decisions.
- Referrals: Seek recommendations from industry peers, colleagues, or business associates who have successfully engaged with remote software engineering contractors.
- Online Platforms: Explore websites such Clutch and Upwork, where you can find reviews, ratings, and portfolios of remote software engineering contractors.
- Media and Industry Publications: Stay informed about industry trends and reputable service providers through media publications, industry reports, and relevant blogs.
- Networking Events: Attend virtual or in-person networking events, conferences, and meetups to connect with potential providers and learn more about their expertise.
- Professional Associations: Explore professional associations and communities related to software engineering and outsourcing, where you can gather insights and recommendations.
Criteria to Decide on a Vendor
The decision to choose a remote software engineering vendor is multifaceted, requiring a meticulous evaluation of various criteria. A comprehensive approach empowers decision-makers with the tools to select a vendor aligned with their goals and expectations. Look into:
- Experience and Expertise: Assess the vendor’s experience in software engineering, particularly in your industry or niche. Evaluate their expertise in relevant technologies and project requirements.
- References and Case Studies: Request references and case studies from previous clients to understand the vendor’s track record, successful projects, and client satisfaction.
- Flexibility and Customization: Evaluate the vendor’s flexibility to tailor contracts, adapt to your business needs, and provide customized solutions aligned with your goals.
- Communication and Collaboration: Emphasize effective communication and collaboration. Assess the vendor’s communication practices, availability, and collaboration tools to ensure smooth interactions.
- Talent Pool: Investigate the size and quality of the vendor’s talent pool. Consider if they offer talent-as-a-service, ensuring access to a diverse and skilled team without borders.
- Security and Compliance: Prioritize vendors with strong security measures, compliance with industry standards, and a commitment to protecting sensitive information.
- Service Level Agreements (SLA): Review Master Service Agreements (MSA) and Statements of Work (SOW) thoroughly. Ensure they include clear service standards, proprietary rights, security, confidentiality, and other relevant warranties.
When considering hiring software engineers in Latin America, Ubiminds stands out as a reliable partner specializing in nearshore software engineers. With a commitment to talent without borders, Ubiminds offers a unique approach to staffing augmentation in LatAm, ensuring quality, collaboration, and service excellence.
International Marketing Leader, specialized in tech. Proud to have built marketing and business generation structures for some of the fastest-growing SaaS companies on both sides of the Atlantic (UK, DACH, Iberia, LatAm, and NorthAm). Big fan of motherhood, world music, marketing, and backpacking. A little bit nerdy too!