Nowadays, every business model requires IT development. This helps to significantly expand the market for the sale of products or services. A huge number of start-ups are exactly digital start-ups, as this is one of the easiest ways to earn money on the condition of a correctly implemented idea and a properly selected development team. Earlier, companies specializing in IT development hired a whole office of developers and it looked like the standard office conditions. However, now almost all startup projects are trying to build dedicated development team, often work with freelancers, and the outsourcing developers.
Working with any of these teams of developers, in any case, saves money, in contrast to the in-house management model. Hiring tech talent using these ways has its own pros and cons, therefore choose wisely.
The Exponential Growth of Demand and Supply for Developers
Let’s just stop and pay attention to how quickly and completely IT technologies came into our lives. Almost every activity of human daily life is accompanied by various applications and softwares. Many companies provide us with daily services from such areas as business, different payment processes, media software, device development, etc. From this list of IT services, you can probably remember a couple of best companies to work for. It is quite feasible. It is expected that by 2024 the number of tech jobs will increase by 17% compared to 2014. Such a large number of technologies means the presence of many development companies and startups. In this regard, there is a certain tech talent shortage. Employers are actively searching for personnel, but there are very few qualified specialists in the labor market, especially if one searches within the same country. Therefore, many startup projects are turning to IT recruitment agencies that help to find an appropriate dedicated development team, qualified freelancers, and outsourcing developers. Often it is necessary to cooperate with companies from other countries.
Three Modern Ways to Recruit Tech Talent for Your Startups
As you may have guessed, it’s about three ways to find software developers: to hire a outsource team of developers, cooperate with freelancers, and outstaffing team. It is necessary to understand what method is the best for your project, as each of them has pros and cons.
Outsourcing
The term by itself means attraction of external resources. In practice, this means a cooperation with sources besides your company for a long-term period. There must be a search for suitable technical skills among outsourcing companies to transfer the task to them for implementation without constant monitoring. You give the task, and in the end, you get the result.
Pros
- Reduces financial costs a lot and optimizes resource utilization, if necessary.
- If you have a new idea and a startup, you may run into the tech talent gap. The search for suitable developers can take a lot of time and effort. Outsourcing teams project management allows you to start cooperation with an already formed offshore team. You will not waste time looking for suitable personnel.
- It is possible to monitor the progress of work.
Cons
- Controlling the development process requires some effort, and sometimes you will have to try hard to get into other outsourcing team development processes.
- There may be problems with the intellectual property. For example, if the outsourcing team is located in another country, you may suffer from differences in IP regulations.
- Hiring an outsourcing team for a startup is relatively a rather big cost compared to other models. However, it’s still cheaper than in-house staff. However, because of the high cost and high promises, the customer can be disappointed due to high expectations.
Freelance
Freelance exists in many areas but is best known from the IT sphere. A freelancer works, as a rule, remotely and without a specific working schedule. Basically, in startups, tech pro research is conducted among freelancers when it is necessary to perform one-time work without the need for further support. Often freelancers are writers, SEO-copywriters, etc. However, among them there are serious, professional IT developers also. Since many talented developers in the IT industry are not tech graduates, they begin their professional activities with freelance, gain experience, and then participate in serious projects.
Pros
- Low labor cost due to the lack of costs for usual working benefits and in-house employment.
- Gives more time to management, allows the customer to focus on the main tasks and problems of the company and does not worry about routine duties.
- There is an opportunity to choose the right candidate among many developers.
Cons
- There is no possibility directly and in a living time to monitor the duty performance of a freelancer.
- The freelancer has the opportunity to choose whom to work with. Therefore, if at some point a freelance developer will understand that is tired of performing your task, then there is a risk that he will give up this job.
- It may take a lot of time to coordinate the work. A freelancer can live in another country, and due to big time zone differences, it may take a lot of time to coordinate actions.
Outstaffing/dedicated model
Outstaffing or dedicated development means deducing staff from the in-house personnel. Using this model, a staff conclude an agreement not with the firm, or with someone who is the direct customer of the project or startup, but with the intermediary organization. First of all, it helps in saving money. For example, many European startup projects cooperate with outstaff companies in Eastern Europe due to lower labor and staff costs. This allows you to reduce the cost of office expenses and make up for the shortage of skilled human resources at an affordable price.
Pros
- Unlike outsourcing, IT outstaffing model allows to control the development and almost instantly make calls and conferences if necessary to coordinate the work.
- Low price in comparison with an in-house model. Cooperating with outstaffing or dedicated development team, you instantly get rid of the costs that are spent on providing the workplace and the environment of each employee. You do not need to spend any more technical recruiter salary, vacation money, dealing with maternity/paternity, etc. Of course, the outstaff company itself allocates funds for these, however, you eliminate yourself from staff issues, and usually, the outstaff personnel costs are cheaper since they are usually located in another country with cheaper developer salaries.
- Also, there is an opportunity to participate directly in interviews and hire dedicated developers.
Сons
- It is necessary to ensure high-quality communication between the customer and outstaffing company. If there is a need for daily calls or conferences, then one day of malfunctioning communication channels can lead to large financial losses. Also, since often the outstaff company may be situated in another country there is a risk of permanent misunderstanding due to the language barrier.
- Again, If outstaffing company is situated in another country there may be difficulties with the time zone.
- Motivation. If you give the development, or part of the development to the hands of a dedicated development team from another country, they may not be so interested in your project if it is aimed only at the consumer of your country. It may be difficult to provide the necessary motivation.
The Biggest Concentration of Tech Talent
It should be mentioned that the greatest concentration of IT tech talents is in the USA. Many worldwide top projects appeared in the United States. There is a well-developed culture of programming and software development. However, other countries are popular with their IT developments also. There is high demand for developers in the UK, Germany, Switzerland, etc. Also, the use of IT outstaffing PM model is popular. For example, in Europe, such popularity is enjoyed by Ukraine. Many articles state that Ukraine is the second Silicon Valley. Such popularity was gained by cheap and high-quality developers.
The Trend for Outsourcing, Freelance, and Outstaffing
Due to the growth in demand for IT developers, there has been a tendency to use such project management models as outsourcing, freelance, and outstaffing. A large number of startups has generated a demand for the use of each of these models. The most important advantage of these is the lower cost of the task in comparison with in-house management model. The choice of the way depends on your needs and requirements for a project because each of the models has its pros and cons. The final choice is for the customer. So, what will you choose?