In 2021, Neil Bradley of the US Chamber of Commerce shared his outlook on small business growth trends. “It used to matter how big the market was in your hometown — how many people would pass by on Main Street. Today, the world is your Main Street.”
While business development managers look for ways to enter new markets, companies have geographically expanded their talent search. This article will explore how to grow a software development team quickly using remote talent and compare IT team expansion models with in-house hiring.
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How Globalization Makes the Hiring Process Faster
Today, remote work is creating a new wave of globalization, accelerated by the pandemic, allowing US companies to hire tech professionals from abroad in a matter of days. Hiring speed and wide geography are even more critical for startups that are growing fast to launch a product in a short time and close another investment round. Companies also look for talent globally to delegate smaller development projects and focus on larger ones or find talent available locally.
As a result of the shift to remote work, employees gain flexibility, which can prevent burnout. Also, some companies are questioning the importance of traditional office spaces and choose to invest their funds elsewhere.
Finally, as companies find ways to remain culturally relevant in different markets while maintaining global consistency, international technical talent embraces the values and business ethics of its foreign employers. In particular, remote software developers in Central and Eastern Europe or Latin America mostly adopt US corporate-culture trends.
Which Hiring Model Is the Fastest
Though many employers believe that hiring full-time staff members is crucial to employee morale and teamwork at the company, in-house hiring is the most time intensive. From seeking and evaluating candidates using internal resources, networking and referrals, or poaching them from competitors to growing your company’s awareness to attract professionals, it may take months to acquire a full-time in-house developer.
Hiring freelancers may be the fastest option, sometimes you can find a developer in one evening, but this option is unreliable, and freelance platforms rarely attract the best talent.
Companies are thinking about outsourcing or staff augmentation as outsourcing agencies are careful about selecting people, but finding and choosing an agency that has the required talent also takes time. Meanwhile, there is a model where tech talent from a selection of outsourcing agencies can be hired in a week — staff augmentation on demand.
This section discusses the hiring speed and specifics of the four team expansion models – freelance, outsourcing, staff augmentation, and hiring contractors via YouTeam. To complete the picture, we’ve also included the traditional way of hiring full-time talent. It may be the slowest way to acquire a developer, but it is crucial for some companies like Tesla, which need to control and administer a team in the same office.
Freelance is the fastest hiring option because you can register on a freelancing platform, post your project requirements, and find a match within a day. Hiring freelancers is suitable for short-time projects, small tasks, and companies with limited budgets.
Upwork’s 2021 Freelance Forward survey shows that 65% of all freelancers are temporary freelancers. They might have regular employment and moonlight occasionally, so the client should not expect the developer to be fully focused on the project. While full-time freelancers are often responsible for several jobs, so the quality of their output could be subpar to that of the client’s specifications.
Freelance platforms cannot give job security to their candidates because it is not compatible with their business model. Consequently, they have difficulty attracting the best people on the market because developers choose a permanent place of employment as a reliable alternative.
Finally, a freelance developer can quit a project at any time, he can only be warned by a negative client review. Freelancers just don’t have the same level of commitment as full-time employees or contractors from development agencies.
Among these options, in-house hiring is the longest journey by its nature. It can take months. There is no talent surplus in today’s job market, so simply posting a job opening may not attract the most desired professionals. Despite hiring freezes and layoffs, employer demand for workers in 2022 was too strong — there were roughly two job vacancies for every person seeking work.
Employers will have to use LinkedIn, job search platforms, or networking to find the right candidate. The HR specialist or recruiter should vet each candidate, hold interviews and tests, and verify the developer’s soft skills that fit the company culture.
Compared to hiring contractors and freelancers, in-house hiring depletes a limited talent pool. Developers with knowledge of both popular and niche technologies are in short supply, especially in small metropolitan areas.
However, tech companies use this option to build their core team and culture with full-time employees. The early employees go into the details of the product as they are more interested in stock options. They usually stay longer and are committed to developing the product and growing the company.
Local full-time employees can come into the office when needed, even if they work remotely. Colleagues working in one location find it easier to collaborate with team members and other departments. That makes in-house hiring the best solution at the core development stage, but do not expect it to be fast.
If the company chooses to hire via development services, it contacts an agency with the desired expertise and discusses the project requirements. The outsourcing model allows you to hire a dedicated development team that includes a project manager, programmers, QA engineers, and UI/UX designers.
However, this is not the most time-efficient model. The customer will spend time finding and vetting agencies and communicating with each one. When outsourcing companies agree to collaborate, they may not have all the available developers required for the project. Then they start sourcing and hiring additional engineers, which can take several weeks. Outsourcing companies can also request more detailed documentation to confirm software requirement specifications with their business analyst.
In fact, tech companies use this type of business practice to focus on the core aspects of the business, assigning entire projects to outsourced teams managed by the CTO or product owner of the internal team.
Outsourcing companies, like any employer, carry risks and are much more careful about selecting people, unlike freelance platforms. However, outsourcing limits communication between the company and external providers as you will not manage each member of the expanded team directly.
Staff augmentation uses full-time employed software engineers from outsourcing agencies to speed up the development process, reduce technical debt, and improve time-to-market. However, unlike assigning or handing over an entire project to an outsourcing company, employers manage programmers and communicate with them directly.
Hiring engineers from outsourcing agencies implies signing a contract for at least a year and paying a deposit. If the agency does not have the available specialist, it looks for a candidate on the labor market, which can take a couple of months.
Essentially, the software development company that offers staff augmentation services acts as an employer of record to simplify the legal aspects of local hiring and reduce taxes in the client’s country.
In addition, employers don’t need to bother with retirement contributions or pay for health insurance, bonuses, vacations, office rental, or workstations as they do for in-house employees. However, they will have to allocate time for onboarding and adapting a new employee to the team.
Hiring Contractors via YouTeam: Staff Augmentation On Demand
YouTeam uses full-time employed software engineers from hundreds of outsourcing agencies, and these engineers are ready to start working on the project within a week. It’s a staff augmentation model with an emphasis on hiring speed and larger talent selection.
The client doesn’t need to contact each agency in search of a professional with the required competencies. A larger selection of talent also means that the employer has a better chance of finding the perfect candidate.
In other respects, this model takes full advantage of staff augmentation — employers will manage programmers directly but will not bother with financial benefits such as health insurance, savings for retirement, and transportation costs for commuting.
“We had an urgent need for dev talent and were not able to hire quickly enough locally. When we decided to choose YouTeam, we were able to build a team of six devs within just a few weeks. They helped us get a quick overview of the quality and quantity of devs available for the profile we were looking for and finetuned the recruiting process.” — Soeren Munke, Head of Go-to-Market & Chief Of Staff at Matterway.
Hiring Models Comparison Chart: The Average Time to Hire
The best-suited hiring model for rapid expansion of the development team depends on the set of employer requirements and the scale of the project. Hiring freelancers is the obvious winner when a company has small tasks to complete, but risky for long-term cooperation and large-scale projects as freelancers have low engagement and can undermine an organization’s productivity.
Assigning an entire project to an outsourcing agency takes time and patience because the customer has to prepare specifications, then contact several vendors, discuss estimates, make sure they understand the scope of the project as clearly as the customer does, and negotiate a price. Nevertheless, project outsourcing allows the company to focus on the other aspects of the business and can be a cost-effective solution for non-technical companies.
Finally, if a company needs developers with certain skills and wants to manage them directly, just like in-house team members, the staff augmentation model will help find specialists who expect a long-term partnership. The fastest option here would be to hire a contractor through the platform, which works with a number of outsourcing companies and provides developers on demand.