Offshore Staff Augmentation: The Ultimate Guide for Startup and SMB

OFFSHORE STAFF AUGMENTATION

Are you looking for an efficient way to source top development talent without having to jump through all the traditional (and tedious!) hiring hoops? Are you seeking a cost-effective and flexible way to increase your software development capabilities? If the answer is yes to either – or both! – of these questions, then staff augmentation is your definitive solution.

Through offshore staff augmentation, tech companies gain access to a vast pool of highly skilled software engineers, boosting their productivity and ensuring top-notch quality control.

Offshore team augmentation gives startups and tech companies access to a much larger pool of skilled software engineers that can help increase productivity and enhance quality control. Plus, the increased flexibility of this model makes it easy for companies to scale their development teams quickly with zero hassle – what more could you ask for?

Not surprisingly, the staff augmentation market is estimated to be almost $82 billion by 2025, according to research by SpendEdge. And, according to BusinessWire, by the end of 2023, tech offshoring costs are expected to be more than $1.3 trillion.Clearly lots of companies are seeing the value!

With offshore staff, you can hire developers that are as equally productive as developers in the United States or Western Europe but at significantly less cost. But make sure the offshore partner you choose to help you recruit and retain these offshore developers (like TurnKey!) has a sterling reputation. Who you work with matters as much as who you hire.

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Let me take you on a journey through the tech world, where I discovered the incredible benefits it brings to startups and tech companies.

What is Offshore Staff Augmentation?

Staff augmentation is a process commonly used in the software development industry to increase capabilities and expertise. It involves hiring third-party, offshore programmers who work alongside an organization’s existing personnel with the goal of helping create or manage company software. By leveraging these additional resources, teams can handle more initiatives while also gaining access to better skillsets if needed.

With software development staff augmentation, you don’t need to painstakingly craft every system component on your own. Think of it as the modern-day equivalent of “just add water” for instant software development success.

Staff augmentation teams are easily integrated into a startup or tech company’s existing development organization and come in varying sizes depending on the software development needs. It’s popular because it delivers maximum value through increased efficiency and productivity at a lower cost.

The Major Benefits of Offshore Staff Augmentation

Development teams don’t need to settle for conventional hiring methods; staff augmentation offers several superior alternatives. Here’s why: it can streamline the recruitment process, give access to a wide range of skills and expertise, and provide flexibility that traditional hires may not offer – all at an affordable cost!

Offshoring has gained popularity for its major advantages over hiring an in-house team. It is significantly less expensive to hire talented software developers from abroad than hiring in-house, as the talent pool is smaller locally and hourly rates tend to be much higher (especially in the U.S. and Western Europe).

Using offshore staff augmentation also means a much faster recruitment process, enabling startups and tech companies to accelerate their speed to market.

Moreover, offshoring is highly flexible, making it easier to change your mind on a project or cut the workforce used since there is no need to fire employees who were hired internally. 

“...Where the work can be done outside better than it can be done inside, we should do it.”
Alphonso Jackson Former United States Secretary of Housing and Urban Development

Pros and Cons of Offshoring Staff Augmentation

Staff augmentation for your software development must be considered thoughtfully.  As startups grapple with the pros and cons of cross-border collaborations, offshoring offers both advantages and challenges. It’s important to understand the implications of offshoring on items such as timelines, cost optimization, and team dynamics so that you can decide if offshoring is a good option for your software development goals.

In this section, we’ll examine the benefits and drawbacks of offshoring staff augmentation in order to help you make an informed decision about how best to use it for software development.

Advantages of Offshore Staff Augmentation

Benefits of Staff Augmentation | TurnKey

The remarkable advantages of offshore staff augmentation is like having an ace up you sleeve that can supercharge your team and take your business to new heights. Think of it like a Super Mario power-up mushroom for your company, boosting your capabilities and expanding your resources without draining your budget. 

With offshore staff augmentation, you can tap into a global pool of top-tier talent. So, give me a moment to put on my cape, because I’m about to unveil the incredible benefits that await those who embrace this game-changing strategy. 

#1. Highly Cost Effective

Offshoring staff augmentation can be a great way for startups and tech companies to increase their software development capabilities quickly, without needing to invest heavily into hiring and onboarding employees. The expenses associated with salaries, benefits, office space and equipment are greatly reduced.

Additionally, offshoring minimizes risks that come with expansion, since you’re able to decide how big or small your offshore team should be based on the current level of work. In essence offshoring offers to startups and tech companies an efficient and cost-effective way to build their software development team without sacrificing quality or speed of execution.

#2. More Flexibility

Startups and tech companies can leverage offshore software development to tap into larger development talent pools, expand their global footprints and gain a competitive edge; however, this all falters if teams are unable to move from one prototyping stage to another due to inflexible working strategies.

Working off of flexible strategies allow dev teams to adjust their approach in light of unexpected product feedback or corporate strategy changes, ultimately creating more agile and effective product cycles. In contrast, too much rigidity can lead to pipeline disruptions or runaway development costs that cripple your budget.

#3. Faster Speed to Market

Startups and tech companies need to be incredibly time-sensitive when it comes to development efforts since speed to market can often make or break an entire company. Offshoring staff augmentation for software development allows companies to delegate some of the tasks off their plate while remaining in control of software development, thus allowing the firm to get their product releases out more quickly.

#4. Greater Focus

Offshoring staff augmentation takes pressure off internal development teams since projects and initiatives can be offloaded to these added teams.  This then creates greater focus for your core tech leadership team on managing the overall development process rather than being stuck in the weeds for each individual product decision.

#5. Much Larger Pool of Developer Talent

With offshore staff augmentation, startups are more likely to find the right person with the unique combination of skills needed at each stage. Not only will this save time that would be wasted trying to fill roles locally, but it also opens up access to international talent and diverse perspectives that can profoundly improve the project’s performance and product quality overall.

#6. Quicker Adoption of New Technologies

For startups looking to use offshore staff augmentation for software development, having easy adaptation to new technologies is key. Adapting quickly not only helps startups and tech companies achieve the desired results in a short amount of time but also allows them to keep up with the ever changing needs of their customers in today’s fast-paced marketplace. Being able to quickly pivot and access offshoring talent can give a startup a real edge over its competition in efficiency and cost savings.

#7. Streamlined Development Process

Using offshore resources for staff augmentation also creates an opportunity to develop an accountability plan that helps paint a clear picture of employees’ roles and responsibilities.  

This plan should also include ways to identify breaches in operating procedures as well as which tools and technologies should be in place to facilitate error free execution of offshored task.

And most of all, this plan creates an effective communication channel between offshoring teams and their internal counterparts, ensuring the development process is as streamlined as possible.

#8. Greater Transparency

Introducing transparency throughout the entire offshoring workflow allows for clearer communication between all parties and lessens the risk of misunderstandings that may result in ineffective collaboration between the stakeholders involved.

Transparency also grants greater visibility into the offshoring operations which can give offshore staff a better understanding of their tasks.

[Speaking of transparency, we here at TurnKey are as see-through as glass.  When you partner with us, you always get a complete view into every developer’s salary, benefits and taxes. And all bonuses and equity options go 100% to the developer since they are the ones that deserve the reward.  Now that’s what we call transparency!]

#9. Less Training Required

Through offshore or nearshore staff augmentation, startups get access to dedicated software developers who have expertise in the technologies their company needs most. Not only does staff augmentation speed up time to market for the product but companies don’t have to make long-term investments in costly training programs or retainers.

#10. Easier to Scale

For startups or tech companies looking to quickly scale up without the time and energy of interviewing, recruiting and onboarding new developers, staff augmentation can provide a fast and cost-efficient alternative. Cutting out the need to search and interview candidates opens up more time for focusing on critical business growth strategies while also ensuring they benefit from highly qualified offshore or nearshore software developers with minimal ramp-up time.

At TurnKey, we developed a winning formula to find the top 3% of tech talents for our clients, including long-standing client Salad, a rapidly growing startup that recently raised a large Series A financing round. They needed to scale their software development team fast but in a cost-effective way. For their software development team, offshore staff augmentation has proven to be a valuable asset.

The individuals we’ve brought on board have consistently demonstrated performance on par with their onshore counterparts, showcasing their proficiency and expertise in various technical skills. 

Despite this exceptional performance, it seems that there is still a lingering desire for additional team members. This desire stems from Salad’s belief that a larger team could bring even more ideas and perspectives to the table, so stay tuned for future stories. 

Case studies: R1, iScribe, Salad | TurnKey Labs

#11. Much Less Legal and Administrative Hassle

Startups and tech companies can sometimes feel like they are navigating a minefield of legal and management issues when going offshore. But staff augmentation offers a way to alleviate some of these worries and take the pain out of managing offshore software development teams.

Having someone else deal with the legal and administrative headaches – combined with the communication and logistics infrastructure already in place within these countries – means offshore or nearshore staff augmentation can help startups and tech companies make their software development journey smoother and more efficient from day one.

But when offshoring staff augmentation for software development, startups and tech companies need to make sure they can trust their offshoring partner. By implementing a thorough vetting process, startups can be sure that the offshoring partner is delivering against their promises.  [Pro tip: TurnKey always delivers what we promise.]

TurnKey Provides Detailed Breakdowns of All Salaries, Fees and Expenses so You Can Rest Easy Knowing What You Are Spending on Development.

Disadvantages of Offshore Staff Augmentation

Navigating the challenges of offshore staff augmentation can be like sailing through uncharted waters at night.  While this model offers undeniable advantages, it’s important to be aware of the potential drawbacks that may lurk beneath the surface. 

Brace yourself for a revealing dive into the darker side of offshore staff augmentation and the biggest two disadvantages of offshore staff augmentaion I managed to extract from our co-founders brains:

#1. Not optimized for project-based work

Offshore staff augmentation is a boon to startups and tech companies because it allows them to quickly and cost-effectively hire talented developers who can help scale up the team. 

However, if you need developers for just a short period of time, like building an MVP for a product or hitting a certain milestone, then offshore staff augmentation may not be ideal since staff augmentation is designed as a long term development solution (at least if you are doing it right!). Thus, expectations and output may be misaligned.

#2. Additional costs might occur

When considering the benefits of offshore staff augmentation such as increased productivity and improved quality, one should also be aware of the fact that it may bring additional costs. 

That is because staff augmentation is usually priced on a time-and-materials model (read more about offshoring models here), meaning you are paying for the number of hours worked, materials used and other add-on services. But it doesn’t have to be that way: when partnering with TurnKey for your offshore staff augmentation needs, these costs are contained as TurnKey operates on a monthly invoicing basis, not on an hourly one.

Ready to Supercharge Your Offshore Staff Augmentation Efforts?

Offshore Staff Augmentation: Working Models

As I see it, there is no one size fits all solution for staff augmentation.  This is likely a great sign as each team needs a custom solution. However, there are two common foundation models used to structure offshore staff augmentation:

Extended team model.

Need to turbocharge your short-term software project? An extended team model can provide you with an experienced, talented development crew and superior scalability that’ll get the job done right. This model works best when you are building for long term and provides you with better scalability and flexibility.

Managed team model.

When looking for a short-term solution, the managed team model is perfect to get your project rolling.  This utilizes an offshore team of developers that manages tasks autonomously – it’s an easy way to delegate work and expand with ease and is mostly used for quick projects.

Disadvantages of Offshore Staff Augmentation | TurnKey

How to Select a Reliable Offshore Staff Augmentation Partner?

Choosing a reliable offshore staff augmentation partner can be a complex process, but preparing and researching carefully beforehand will pay off tremendously. Here’s a checklist I compiled to lead you through the process:

  • For starters, take a look at their previous cases and reputation, paying attention to the reviews they’ve received from customers.
  • If geography is a factor, you’ll want to find a firm that operates within your desired area.
  • Identifying the applicable delivery models becomes essential as it helps narrow down potential candidates even more.
  • Relevance and niche expertise should also top your list of criterions – there’s nothing better than genuine know-how for success.
  • Gauge how quickly and efficiently the company responds to inquiries and requests for assistance.
  • Understand the company’s rates and fees for their staff augmentation services so that you can make an informed decision and get the most bang for your buck.
  • Determine if they have the relevant expertise in scaling startups and tech companies (like TurnKey’s personnel have!) and book a 1-1 consultation to make a final decision.

Why is Offshore Staff Augmentation a Great Choice for Startups?

Scaling your software engineering organization can be challenging, especially when deciding if and when to build offshore dev teams. Making the right choice is critical.

In this video, we dive into the question of when offshoring is great and when it’s a dog. Our CEO Sterling Lanier (and his furry best friend Tucker!) are here to provide you with all the information you need to choose the right time to make offshore dev teams a key part of your growth strategy:

Having been writing about the software startup industry for several years, I can personally attest to the immense value of the offshore staff augmentation model. When it comes to keeping up with the ever-evolving technology landscape, managing sudden spikes in business demands, and ensuring rapid scalability of software development teams, it has proven to be a game-changer. 

The ability to tap into a global talent pool of highly skilled specialists is nothing short of remarkable. With offshore staff augmentation, you are able to seamlessly expand your team whenever needed, streamline your development process, and maintain a level of control and flexibility that is unmatched. It is undoubtedly one of the smartest decisions any software startup or tech company can make to stay ahead of the curve.

Why is TurnKey the Best Partner for Offshore Staff Augmentation?

Our mission at TurnKey is to alleviate the stress and hassle that comes with offshore software development staff augmentation–and all while delivering the top 3% of developers in the world.

Not only do we leverage our learnings from past experiences, but our process is built entirely around the needs of the customer. That’s why we call our model ‘Yourshoring’ – because we build staff augmentation teams that are built around YOUR culture, YOUR rules, and YOUR product objectives.

Main benefits of working with TurnKey:

  • Churn reduction. Our kickass retention program cuts churn by more than 50%.
  • One-stop- awesome-shop for full stack teams. We custom recruit the Top 3% of talent across all the key positions you may need as you scale.
  • Zero risk. We take the complexity and risk out of building high powered remote teams.

Let TurnKey Become Your One-Stop-Awesome-Shop for Reliable Offshore Staff Augmentation.

FAQ

How can I benefit from the offshore staff augmentation model?

Offshore staff augmentation is a unique and effective solution for software development teams. With it, you can gain access to hard-to-find developers and save time in the recruitment process.  It also speeds up development times, thus accelerating your overall speed to market.

What is the difference between offshore staff augmentation and outsourcing?

Staff augmentation allows companies to add additional resources within their existing team, while outsourcing entails hiring an outside contractor or firm to manage a defined set of activities. With staff augmentation, the control remains with the company as they get access to top talent with specific skills. Conversely, outsourcing involves moving complete responsibility of certain roles and processes to external vendors which can provide more cost-effectiveness in some cases.

What is the difference between offshore and onsite?

Offshore refers to a situation where a company from one country works with partners from another. By contrast, onsite means that both parties are located in the same area, which can make communication simpler and allows easier supervision over development.

How do I find an offshore staff augmentation partner for a startup?

Start by outlining your goals, objectives and expectations for an offshore staff augmentation provider. Then research different companies, and look at their previous work and reviews from other customers to ensure they are credible providers of offshore staff augmentation for startups and tech companies. Word-of-mouth recommendations are also useful to get a better idea of what to expect when working with certain companies. Finally, once you've found a few possible options that match all your criteria; check on factors such as their pricing plans to find the best fit for you.

January 7, 2024

TurnKey Staffing provides information for general guidance only and does not offer legal, tax, or accounting advice. We encourage you to consult with professional advisors before making any decision or taking any action that may affect your business or legal rights.

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