Digitalisation has become essential for businesses, shifting from a trend to a must-have. Today, theres a growing need for IT services, and some companies find it challenging to hire suitable local providers for software development.

Many business leaders are hopping on the offshore software development bandwagon to tackle the gap between the increasing demand and limited local supply. This method brings various advantages, especially in terms of saving time, costs, and effort. Offshoring is beneficial for startups and small businesses, but also appealing to larger enterprises that prefer hiring a dedicated software development team from a distant country instead of managing a whole in-house department.

So, what are the best practices for hiring an offshore software development team? Lets find out!

What is Offshore Software Development?

Before we dive in, lets briefly discuss offshore software development. There are three most common ways to hire a software development team: onshore, nearshore, and offshore. Onshore means hiring within your country, nearshore involves a neighbouring country, and offshore pertains to a country far away.

Offshore hiring brings various advantages, including cost reduction, access to a global talent pool, and scalability. According to Forbes, most popular offshoring destinations like Eastern Europe, South America, and Asia are known for their blend of technical skills, cultural compatibility, and reasonable development costs. That's why many businesses in the USA choose the relatively riskier but ultimately more beneficial long-term employment model of offshore hiring.

If your business is considering opting for offshore software development services, here are five key steps for a smooth hiring process.

5 Steps to Hire an Offshore Software Development Team

1. Specify Your Project Needs

Before you start looking for a partner, create a comprehensive description of the fundamental reasons and goals behind your project. Define objectives that outline the project timeline, the issue it addresses, and the necessary steps to achieve your goals.

After that analyse such factors as the project type, technology stack needed, and collaboration model. For instance, if youre developing the backend, youll need a developer skilled in programming languages, but for a cloud solution, a team of experts with diverse expertise.

Next, decide whether you want to work with European developers, who have a similar culture to Western countries, or explore collaboration with Latin American or Asian offshore companies.

Going deep into the details of your project will prevent misunderstandings and ensure the achievement of desired outcomes.

2. Create a List of Offshore Development Teams

Once youve determined your needs and requirements, invest time in finding companies specializing in those specific aspects. To do that, use different resources, such as social media, freelance platforms, Clutch and GoodFirms portals, QA forums, such as Quora and Reddit, and, of course, your social network to find the best candidates.

While investigating, consider candidates location, hourly rates, team skills, and company track record. Examine your potential partners portfolios for similar projects and review feedback from previous clients. Also, take note of the company's values and business culture, crucial for effective communication and processes.

3. Assess the Chosen Candidates

After you examined the companies reliability, its time to proceed with the other aspects, such as the level of proficiency and cultural compatibility. Consider these crucial factors:

1. Technological Proficiency

Assess their technical skills and ability to incorporate the latest technologies. Review their websites, case studies, and B2B portals for insights into their expertise. For, example, if youre looking for web development services, choose companies whose key areas of expertise include this topic.

2. Time Zone Alignment

Consider time zone compatibility for effective collaboration. Find a partner with similar working hours or a willingness to compromise, ensuring clear communication.

3. Language Compatibility

Having a team that shares your language is a great bonus, reducing misunderstandings. However, if the team is situated far from your region, ensure they are proficient in English or another language you feel comfortable with.

4. Expenses

Request project estimates and test tasks from potential companies to determine the best price-to-quality ratio. Even though cost is important, dont compromise quality over quantity to ensure a successful partnership and great outcomes.

5. Project Management Methodologies

Understand their approach to project management. Ensure alignment with your preferred methodologies, such as Agile or Scrum, for efficient collaboration and goal achievement.

6. Security Measures

Discuss the security measures implemented by potential partners. Make sure they adhere to the industry standards of your country or region, protecting your sensitive data from potential threats.

4. Conduct Interviews

First, conduct a technical interview to deeper assess skills and identify top candidates. If youre not very confident in your technical knowledge, find an expert to help you at this stage.

Second, assess non-technical aspects, including soft skills, decision-making, and communication. Non-technical interviews provide insights into the teams work style and compatibility with your project. Ask managers and developers to simplify technical concepts, testing their ability to explain their work. Evaluate their responsiveness and how well they understand your needs and concerns.

5. Finalize a Contract

When youve chosen the right company and are ready to sign the contract, make sure to create a robust multi-layered agreement. Ensure that it precisely delineates such elements as rates and timeframes, ownership rights, warranties, and legal compliance.

When involving an offshore team, you provide them access to confidential business information. Therefore, signing a Non-disclosure Agreement is also vital to prevent unauthorized data disclosure. After these formalities are complete, your remote development team is prepared to initiate the project.