To Outsource or Hire an Employee – What Should a Start-up Do?
Creating something from the very scratch is a grueling matter of blood, sweat, tears, and an amount of patience bordering on the infinite. You need an impressive idea to form in the depths of your brain, you need to sit down and flesh that idea out for weeks, possibly months, you need to play the devil’s advocate and poke holes to get rid of the impractical bits, you need to draw up entire financials before you can even dream of getting funding for your dream. Oh, you’ve been through that entire exhausting process already? Congratulations!
You now have the biggest quandary that has baffled app developers, much like yourself, ever since the app business cambering- To outsource or hire full-time, that is the question! The answer to this all-important question can only reveal itself once you start asking yourself a bunch of relevant questions ranging from what do you look for in a developer to how important are the aspects of feedback and collaboration to your success.
Ever since the global economy has opened in a big way, there has been a mad rush by developers to mine overseas resources that are as efficient as the ones back home, at a fraction of the cost. While some have had very pleasant, professional working experiences that have catapulted their companies to glory, others have completely sworn off hiring overseas consultants/developers given the horrible experiences they have undergone. So how does one decide whether they should hire a full-time developer or outsource their development work overseas? You weigh the pros and cons of it! It’s that simple, really! Here’s what you need to consider before you make your decision.
Business Strategy: Anything that isn’t of supreme strategic importance should be outsourced
If this is for your first start-up, this might be a little hard to digest. But it makes perfect business sense. Not all tasks that you need to be performed are strategically important. Consequently, not all tasks need the skills of a full-time developer. Micromanaging every little bit of content, graphic design, programming, customer service and other nonstrategic tasks, will eat into valuable time and resources that can instead be put to better use for your app’s business and vital operations.
This may, however, be also construed as avoiding outsourcing a job that requires core strategic development, which is not a bad idea to be honest. It is best to have full-time employees on payroll for core strategy development, as this would help in the alignment of thought for your core strategy. A full-time developer would also be more invested in the idea, than a temporary one, and would more likely prove to be loyal as well. However, for majority of your non-core operations, outsourcing overseas makes perfect business sense, on the dint of one massive advantage – the cost. Hiring a local developer can set you back by as much as $150 an hour. Outsourcing the same work will probably cost you a quarter of that price or less. Without, if it may be added, the additional hassles of the overhead costs that go with hiring full time employees.
Understand what your business goals are, and act accordingly
As of this moment, you might be a one-man army, believing in your strong DIY ethic, striving to succeed. Or you may be a band of few merry folk, on a voyage to disrupt the way business is conducted. In either case, it is imperative that you align your priorities in accordance to your business vision. If you’re just starting out, and have a lot of programming to squeeze in a moderate runaway fund, it is best to forego investments in brick and mortar and the like (read full time resources) and instead, outsource most of the programming work and get your money’s worth in terms of the final product. Post which, you can get all the funding you need to build a proper company HQ and employ the best suitable candidates you want to.
However, if you know your business needs fresh insights and developers who can commit to your idea in the long run, it would make better business sense to hire full time developers, completely vested in your idea and less likely to bail in the middle of the expansion or the consolidation process. A fully vested full-time developer is also much more likely to become a part of your core team and will his/her interest accordingly with the company’s vision. In either case, however, it is important to note that it makes sense to outsource the nonstrategic part of your business and development process to see better output in future.
Make optimum use of Business Functionality
You and your co-founders may be well versed in terms of building the core functions of your business, but it is highly unlikely that you have specialized skills for every business function you would need to incorporate into your application. Even in the rare cases of you having these skills, you may not have enough time or bandwidth to accommodate and work these skills into their required level of business functionality. Outsourcing these functions, in such cases, therefore, becomes the more sensible, business-viable option. These could be anything – from scalable coding to marketing campaigns to graphic design to content to relevant data collection for different markets outside your sphere of influence. It is important to understand that outsourcing work in such areas will enable you to achieve a degree of functional scalability that is important for your business to achieve. Once you have achieved a degree of functionality in these specialized tasks and it begins to make prudent fiscal sense to employ full time resources, you can always hire full time specialists in the future. Until then, however, it would be wise to follow the age-old adage which still holds true today – If it ain’t broke, why fix it!
Getting past the cons of outsourcing
If you have gotten this far, you would probably be aware of most of the pros outsourcing has to offer. But what about the cons, is a question that might plague you. You may have heard frenzied accounts of horrific botch up jobs done by freelance employees from your fellow entrepreneurs; accounts that may have made you discount outsourcing entirely, due to its supposed risky nature. So, how do you know that you would get your money’s worth when you are outsourcing a significant portion of your work? What are the problems you might face, and how do you circumvent them?
Quality: This is by far, the most important issue that a lot of businesses face – the work submitted is nowhere near the standard you expected. So how do you ensure you get the best quality out there? How do you even judge developers based on their portfolios? You can never be too sure of the quality of work you receive. The Solution: While you cannot completely mitigate this risk, you can certainly bring it down to a far more acceptable level by employing a few strategies, which have worked before. One, you can hire a local developer (as a consultant) to do some of the work and instruct the companies in running to work on a test project to have a first-hand experience of their quality of work. Two, you can have technical interviews with the developers themselves. A personalized test would ensure you end up with the right candidate, who would deliver the desired quality of work.
Collaboration: Another important issue that keeps cropping up, especially in the case of outsourcing overseas, is the issue of collaboration, which can be quite challenging. After all, major cultural anomalies have been known to crop up from time to time when it comes to the statement of work. How do you ensure, that a completely organically collaborative process like software development can be carried out in perfect tandem and you and your team overseas stay on the same page and work together in the same context? The Solution: For collaborative issues such as these, there is always Scrum. Scrum is defined as a framework for managing software development where developers break their work into specified work cycles (ranging from one to four weeks) and deliver workable software towards the end of each such cycle. Scrum will ensure that you never stay in dark about the methodology of work done by your overseas team and that you’re always in loop. It also makes it easier to detect when the team starts to stray from the designed path and makes it easier to salvage and correct situations that, if left untouched for long enough, would otherwise spiral out of control. In short, Scrum will make sure you always stay on top of what’s happening.
Logistical Difficulties: Outsourcing your work to a company in a different time zone might prove problematic, especially due to different time zones, especially when it comes to meetings and presentations of the work done. The Solution: A lot of good development companies have developers working on different shifts according to your needs. These developers make sure they bring their A-game when it comes to meetings and presentations, much like their work. Of all the issues you might face, this might be the easiest one to handle. Just choose an organization that has developers that can work and present according to your time and this issue will sort itself out on its own.
Conclusion
Is hiring only local, full-time developers a good idea? Possible but unlikely, given the fact that you might want to invest more of that money into core development instead of peripheral tasks. Is outsourcing all your work overseas a smart thing to do? Not unless you are extremely lucky, given the pitfalls you might face in terms of quality, collaboration and logistical issues. Is going the hybrid way (mixing full time developers and an outsourced team) the best way? This is most likely the best way you can adopt to ensure your business grows and blossoms. Just make sure that your core strategic business development is done locally. Post that, it would make prudent business sense to outsource the rest of your business overseas. After all, getting your money’s worth is important if you want your business to go places.
