You might think that it is a significant advantage to have in-house employees. You know them well and how they fit in your organizational culture. Another thing when having internal talent is keeping a candidate interested. This one is important. You need to identify what stage the candidates are in or if they are not actively looking to change a job. By now, you have probably learned the cons of having a talented employee and recognized the challenges of retaining top talent. You are probably even considering the best strategies to keep skilled professionals in-house, especially in such a competitive niche.
Yes, it is crucial for businesses to properly navigate software development and perhaps consider outsourcing some projects to a talent pool abroad. First off, we mean here focusing on outsourcing and offshore or nearshore software development Europe. Choosing the nearshore and offshore dev solutions could add great profit by reducing costs and providing access to a larger talent pool, according to N-iX.
Nearshore and Offshore Software Development: What Are They?
Nearshore development means you’re working with companies in neighboring or nearby countries. Imagine a Spanish business teaming up with a development crew in Poland. That geographical closeness often brings a few advantages. You’ve got fewer time zone issues, easier communication, and, of course, a certain level of cultural alignment that can make collaboration smoother.
You’ve probably heard about nearshore software development in Europe as well as offshore dev. This one refers to outsourcing to companies in distant countries, often across continents. An example would be a business in the USA working with a development team in South Africa. While this can lead to cost savings, companies may also face specific challenges like time zone differences.
Now, Choosing Between The Two?
Well, it’s not all about price tags. There’s a lot more to it, like productivity, quality, and what you’re really getting in the long run. So, when we speak about the European nearshore and offshore, we speak about further advantages for both sides:
- Rich Talent Pool: Central and Eastern Europe (CEE) boasts a tech talent pool of over 5 million professionals. Countries like Poland, Ukraine, the Czech Republic, and Romania are leading contributors.
- Cost-Effectiveness: offshore and nearshore software development in Europe offer competitive rates. This balance of affordability and quality makes them an attractive option.
- Language Benefit: working within similar time zones and cultural contexts reduces communication barriers; however, today many experts speak English and manage to work remotely, leading to more efficient collaboration.
Key Considerations
The main difference between offshoring and nearshoring is connected to the costs and rates. A lot of companies in their IT strategy are always talking about the rates connected to that matter. When they speak about their IT projects when it comes to offshoring and nearshoring, it is also about having a wider choice of talent sources. Speaking from the experience, you can apply a number of different approaches, including the onshoring (in-house) option.
If we speak about the basic or a simple level, you can start by comparing skill sets and rates in your city vs. abroad countries. You can compare the cost of hiring a developer and the wages that are paid, and make a decision based on that research. When deciding, consider the following points:
- Communication (language barriers) and collaboration
- Cultural similarities/challenges
- Working hours and coordination difficulties
- Control over projects vs. in-person meetings like direct control
- Project management challenges.
- Costs savings compared to onshore vs. offshoring
- Quality, tech ecosystem, and expertise per price
- Europe’s hubs, tech education, and expertise in tech
Top European Nearshore Destinations
What we would like to say is that European tech companies show top-level numbers in the niche. If you’re trying to decide between in-house and, let’s say, nearshore software development in Europe. First, you need to check the top IT cities to make the comparison.
Also, while checking the rates and quality of services, take into account all the taxes, pensions, and benefits that you may be paying for in-house experts. A fair comparison also means looking at the expenses that might be incurred by outsourcing to a nearshore partner. So here are some standout countries with lower rates compared to the USA, Canada, or Western Europe:
- Poland: it has over 500K IT professionals, and is a hub for software development, offering a blend of expertise and competitive rates.
- Ukraine: it remains a top country for hiring IT experts with around 300K tech specialists, having a strong reputation in software development and IT services.
- Romania: With around 200K IT experts, it is emerging as a key player in the European tech scene.
Finding the Right Partner and Talents
So, how do you make the right choice? Well, we suggest you start a pilot project before locking yourself into a long-term commitment. Honestly, this approach can help you, especially, if you are a startup. It makes a lot of sense, as it is one thing to compare rates, but another to see how a team actually performs. A pilot project lets you:
- Test productivity
- Assess quality
- Check code and expertise
- Measure collaboration and assess costs
Do these experts really fit into your workflow, or will you spend half your time fixing issues? You can apply the Total cost of ownership (TCO) method. It will help you evaluate the overall costs associated with a product/service over its entire lifecycle, as the salary alone won’t tell you the full story.
Final Thoughts
Summing up, when calculating, take into account the costs of traveling. Also, factors such as communication, onboarding, quality control, and potential delays should be considered. Sometimes, the cheaper option ends up being a lot more expensive. It is also essential to determine how much governance you need to apply into a relationship with the service company you are hiring. Both nearshore and offshore software development models offer unique advantages.
However, perhaps Europe’s nearshore options stand out today. It could be due to their rich talent pool, lower rates, and educational and tech initiatives from the government. By carefully assessing your project’s needs and positions involved in the project, including the cost of onboarding and passing on information, as well as looking at the differences between different working days, we believe you will choose the best option.