Outsourcing overseas has been a growing trend for the fast-paced, emerging tech industry. Companies should consider overseas development teams to scale operations and reinforce product development, execution, and expansion. Hiring outside of the states can be beneficial in many ways, but there are several things to consider when setting up shop.
Keep in mind that the structure of an overseas operation should be supplemental to a company's headquarters office. That being said, the overseas division should be managed by a company executive (primarily someone assigned to a relocation) and a number of independent contractors and third-party firms. This will save you extra leg work when it comes to the legality of the business - which raises another point: cover all legal processes ahead of time and follow all government regulations. Legal conflict is nothing you want to get involved with. You could also set up a satellite office in the country you're looking to build a development team in. To keep your overseas dev team operating smoothly, communication is paramount! Commision a lead at the local office to communicate with the overseas executive on a consistent and clear basis.
Understand that your overseas office will be very different than the one in the states with differing cultures, language, living situations, transportation, economies, and law systems. When scouting talent or location for office space, do your research. From my experience, Eastern Europe's (Ukraine, Belarus) development talent is strong. India’s junior developers show more potential 4-5 years after college or with equivalent training. Southeast Asia can be a hit or miss with finding hires who fully grasp what you’re looking for since the culture and communication is very different. Vietnam or Phillippines talent comes more highly recommended. Although Vietnam’s talent is more impressive, the language barrier can be greater. South America’s (Argentina, Brazil) talent is more comparable to the states with the limited culture differences and language barrier.
Understanding how to carry the message you want, without it getting lost in translation is important. It can already be challenging for teams to communicate in the same room, even more across the world. We have found that having team huddles several times a week, either over Hangouts or Skype chat, works well.
Having a key person with a vested interest or relationship with the country and traveling there frequently (at least every 8 weeks) will ultimately minimize cultural unfamiliarity, and maintain energy and performance. The changing time zones can be difficult to overcome, but South America and Eastern Europe are slightly easier if communicating from the States.
Cost is clearly an advantage for overhead expense since contractors can be less expensive out of the country. Keep in mind, quality prevails all. Good talent is more expensive and I’ve seen it time and again, companies try to cheapen projects but the result becomes a larger expense correcting things later on. Here are a few ballpark salaries by location:
In Ukraine a VP of Engineering type can make $5k/month, whereas a Junior Developer can make $1k. Other areas range, such as India, where it’s about half the price of Ukraine. Southeast Asia is about 20-30% more expensive compared to India. A VP of Engineering in Argentina can make anywhere from $5-10k/month depending on level of difficulty. The best talent will obviously be more pricey, similar to the states.
Generally, building an overseas development team takes well thought out planning and some time in order to successfully sync operations with the home base. A good functional code to stick with is outsource non-complex and redundant work to support the big picture and keep strongly quality controlled entities of the production local. Sourcing good talent will be a process too. Don't rush things, better slow and right than fast and wrong. The overall end result will definitely add some appeasement to the work force and expansion rate of the company.