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Why offshoring is the perfect way to scale tech teams during a crisis

Software developers offshoring team
Image credit: The Scalers

A global pandemic, war in Europe, the energy and cost of living crisis, the lingering effects of Brexit, and the largest bank failure since 2008 — the last few years have been times of previously unimaginable disruption. Yet despite these challenges, the UK tech scene became only the third country to cross the $1tn value milestone in 2022.

This year isn’t free of challenges, but it also presents opportunities for the companies that can seize them. Building a resilient tech team during these times is crucial to weathering the storm and seizing available opportunities.

Sustainable scaling

The Covid-19 lockdowns showed the importance of sustainable scaling.

After the initial shocks and layoffs, the tech sector saw astronomical growth from companies that provided solutions to the pressing challenges brought on by Covid-19 and lockdowns. Chaotic mass hirings followed as tech companies around the globe struggled to keep up with skyrocketing demand and rapid digitalisation.

These overzealous hirings resulted in overstaffing based on unrealistic expectations of demand as well as hiring candidates without the right skills. The majority of the recent big tech layoffs were primarily to correct these hiring mistakes.

The lesson for UK tech companies today is to ensure that whether we are currently or soon to experience a surge in demand, we need to build teams with top talent, cultural alignment, and a system that can scale without limits.

And while quality is more important for long-term success, it doesn’t hurt to save on overheads at least in the short term.

Beating ongoing local talent shortages

Despite large layoffs by tech giants, finding individuals with the right technical skills remains an issue for tech teams in the UK. Even in January this year, the Office of National Statistics reported 53,000 vacancies in the IT industry, higher than before the first lockdowns.

The limited talent pool means that skilled engineers can still demand pricy salaries, which makes scaling difficult and slow. In the past, the need for staff who work in the same office as well as ensuring a compatible culture meant that most businesses adopted a slow and steady approach with the expectation that it would lead to high quality. That has completely changed now.

Thanks to the boom in remote and hybrid work brought on by the pandemic, companies are either immediately ready to start a remote collaboration or can have the infrastructure in place in no time. Plus ever accelerating digital transformation means that being slow is no longer an option. Tech teams need to find ways to deliver value faster while maintaining quality and security. Oh, and they might have to overhaul their roadmap next week based on the next crisis.

It’s no wonder outsourcing and going offshore are increasingly becoming essential tools for tech teams looking to scale.

The two ways to beat local talent shortages

There are two main approaches to beating local talent shortages: outsourcing and offshoring. These terms are often confused as they both involve working with a team in a different location, but they have fundamentally different approaches, advantages and disadvantages.

So what is offshoring, and what is outsourcing?

  • Outsourcing is where a company hires a third party to provide a service or product that the company traditionally made.
  • Offshoring is where a company moves or builds a part of its operations in another country.

Outsourcing is often conducted offshore, but offshoring is different from outsourcing as the company retains full control over the team.

Outsourcing is more common for short-term, project-based work, and is typically a cost-saving measure. By accessing an established team who is ready to go and has worked on similar projects before, you can leverage the outsourcing company’s operation. At the same time, outsourcing is often lower-quality, with more cookie-cutter solutions and little communication between partners.

Offshoring offers more strategic benefits and is more common for long-term product approaches. By accessing the talent pool of other countries, you can build a dedicated team of experts matching your exact needs. As they work exclusively for you, you are completely aligned and never have to worry about your one senior developer being seconded on another project.

Outsourcing vs offshoring. The Scalers

So, while outsourcing is a great option for a short-term project like updating a website, offshoring is the better, long-term investment for building an app or projects with ongoing maintenance and enhancements like project development. And that’s why it’s the better choice for scaling during a crisis.

The benefits of offshoring to scale tech teams

Although outsourcing is a common tactic to cover short-term development needs during a crisis due to its usual cost savings, it can provide a door for competitors to seize and it doesn’t provide a stable development environment. If you choose a short-term solution, you can find yourself loaded with technical debt causing a slower rollout as you plan for more scalable growth. Plus, you’ll often find your work neglected when more and bigger projects come into the outsourcing company.

In contrast, now is the perfect time to kick off an offshore team.

  • You can get a dedicated team of world-class engineering talent completely aligned with your business so you can focus on strategy, not mistakes.
  • You can reduce your operational costs and risks by leaving the office space, equipment and support to a partner.
  • By starting now, you’ll have everything in place to seize the uptick after the market recovers.

Together, these factors make offshoring a key strategic tool for UK tech teams who want to emerge from crises stronger than when they entered with a scalable foundation for the future (and impress their superiors by reducing overheads at the same time).

This is all dependent on finding the right offshoring partner to build or extend your tech team.

The key ingredients of a good offshoring partner

A good offshoring partner is essential to the success of a company’s decision to go offshore. Their experience and operations are vital to helping you build, manage and scale a team. Picking the wrong partner can result in catastrophes in each area which is why some companies have been put off offshoring altogether, usually as a result of a bad outsourcing experience that’s tarnished the whole field in their minds.

A good offshoring partner:

  • Works as a partnership of equals, with effective two-way communication
  • Listens to and advises for your specific needs
  • Has experience in scaling teams which they can show with case studies and testimonials
  • Operates in a large talent pool so they can hire the right people
  • Has a thorough recruitment process to vet the hard and soft skills of candidates
  • Will get your offshore team on the same systems and workflows as your existing one
  • Focuses on quality and cost-optimization, not cost-cutting
  • Knows how to navigate local legal requirements
  • Will run all aspects of operations from HR, office space, and equipment to engagement
  • Will ensure integration of your offshore team within your business

In essence, a good partner will build a team that works with you in the same way as your local team while taking care of all the housekeeping.

“In times of recession, there are massive opportunities and fortunes to be made.” – Richard Branson

The smarter way to go offshore

The Scalers have honed a unique approach to offshoring over the last nine years.

We have built teams for over 30 partners in the world’s fastest-growing tech hub, Bangalore, India. With more than two million employees in the IT sector and over 400 R&D centres, it’s a melting pot of innovation. Because of the abundance of talent, they can set up new teams of experts in just a couple of months and scale at will.

To make sure you get the employees you need, The Scalers put every candidate through a rigorous seven-step recruitment process to weed out engineers who don’t have the right hard and soft skills. So you only need a final interview with the top 1% of tech talent.

Every team gets its own chief happiness officer (CHO) and access to The Scalers’ people and culture team, who’ve been certified as creating a Great Place To Work. Together, they handle HR, payroll, office space, equipment, training and engagement.

All that frees you to focus on your product.

Download The Scalers free guide for IT leaders in the UK and Ireland

The Scalers have prepared a detailed guide covering the state of the UK and Irish markets, comparing outsourcing and offshoring in greater depth and explaining their unique approach further.

Download it for free so you can plan a scalable foundation for your development. If you’d like to learn more about their unique model then register to get a free consultation with one of their experts.

In paid partnership with The Scalers.