There are several reasons why businesses tend to scale-up their development team with software outsourcing – as opposed to hiring and maintaining an in-house team. The first thing that comes into one’s mind is that outsourcing can save a considerable amount of effort and resources.
Scale-up development team with software outsourcing prioritizes the core competencies of your business. You would have to spend less on recruiting, hiring, and training. Additionally, you won’t end up exhausting your resources on comparatively less important tasks.
1. Cost optimization
According to research from Joseph G. Hadzima ( senior MIT lecturer )” the precise cost of in-housing software developers could be roughly 2.7 times greater than the base cost”. This is owing to all the employment taxes, rent, employee benefits, office equipment. And all the non-billable hours that add up to the total cost.
Research shows that the average base cost for an internal employee of $50 per hour. Double to $100 per hour, adding up all the costs. Temporary teams can be quickly set up with software outsourcing, which might translate into faster development as well.
2. Reduce the risk of hiring the wrong people
Every step of the recruiting process needs to be done thoroughly and even then, you can end up hiring the wrong person.
It has been said that even if you get the hiring right about 50% of the time, then you can safely consider that you have a talent for recruitment services.
As a leader of a company, you will spend a significant amount of time in the interviewing process. Then you will have to pay someone to choose the right candidate. Besides, they will handle the on-boarding, do the paperwork, configure a new computer, etc.
On the report of DevKillers, it takes roughly 43 days to find a new developer which can wind up costing you between $22k and $32k.
3. Increasing and scaling team skills
Software outsourcing can be perceived as an on-demand service where you are clearly aware of your costs per hour for every outsourced developer.
In this era of development, you can add or switch developers on a project. Moreover, if you need more front-end, back-end, or UI skills, then you can do so easily with an outsourced software development partner.
4. Following the global trend of remote working
GitLab is a very good example of a fully-remote company where roughly 160 employees are working collaboratively. This is a platform for developers with none of them being in the same office.
The location of your company’s software development team is starting to prove more and more irrelevant to your business. If these massive companies can smoothly run their businesses without needing an in-house team. Then who’s to say you can’t?
5. Prioritizing your company’s core competencies
Software outsourcing is significant for the overall stability of a company. This redirects business focus on the core competencies. That enable it to have competitive advantages. You should focus on your strengths and outsource all the other things. It is undeniable that software outsourcing is a good choice for many businesses.
Strong statistics imply the demand for software outsourcing will continue to rise. Besides, business organizations are now on the quest to digitize and optimize their business processes, forming the basis of their organization’s digital transformation.
These are the vast amount of reasons that software outsourcing is considered to be a viable alternative. To hiring (more) in-house software developers, you will find a new way to expand software development teams successfully using the tips listed above.
At Manifera, it is our mission to guide you on scaling your software development team successfully and which fits your current business needs perfectly.