The outsourcing of tech development work overseas has become an integral strategy for businessesaiming to stay ahead. IT outsourcing spending is projected to reach $519 billion in 2023, a massive 22% increase over 2019’s numbers.
It’s clear the use of overseas developers and other IT talent will only increase. The benefits are too strong to ignore. With that growth, companies may need to work a bit harder to overcome these six most common challenges that employers face when working with developers overseas.
1. Communication Barriers: The Cost of Miscommunication
Effective communication is the linchpin of successful project management. The Economist Intelligence Unit found that 44% of executives believe miscommunication can lead to delays or failure in the completion of projects. The financial impact is also stark, with companies of 100 employees losing an average of $420,000 per year due to miscommunication.
Both distance and language barriers obviously contribute to miscommunication. It’s even more common with developers sourced from places halfway around the globe such as Asia where an employee could be sleeping while your company is operating under normal business hours, hampering the ability to collaborate effectively.
2. Time Zone Differences: Major Impact on Collaboration
Time zone differences can significantly disrupt collaboration. A recent survey revealed that 79% of remote teams include members from multiple time zones; 41% report that coordinating across these time zones is their biggest challenge.
Nearshoring offers a fairly simple solution to the time zone challenge, however. American and Canadian companies hiring remotely from countries in Latin America, for instance, experience only a one-to-two-hour time zone difference, and a far wider window of time for synchronous work, when compared to working with someone in an opposite time zones as seen in places like the Philippines
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3. Cultural Differences: The Subtleties of Cross-Cultural Collaboration
Cultural differences can be subtle yet profound. Recent studies have found that cultural conflicts can lead to inefficiencies and reduced cooperation among multinational teams. For example, one Harvard Business Review study looked at the collaboration and working interactions of 5,728 people across over 800 remote teams that were working for several months on consulting projects.
When evaluating “personal diversity” (i.e. diversity in observable personal traits such as age, language, skills and values), the study found that “personal diversity can negatively affect team climate. When team members come from different cultures, are of different ages, unequally fluent in the team’s working language, or differ otherwise at the personal level, they tend to find it less enjoyable to spend time together, trust each other less, make less favorable attributions about each other’s motives, and generally communicate less. As a result, they experience less cohesion and have more conflicts and misunderstandings.”
Nearshoring is one way to overcome these cultural differences. By hiring from a country like Mexico, you are hiring professionals who are often familiar and in tune with American culture, making it easier for them to be onboarded and integrated into a team in the United States, even when working remotely.
4. Quality Assurance: Upholding Standards Remotely
Quality Assurance (QA) in a remote setting is fraught with challenges. The QA process often requires close collaboration and quick access to information, which can be hampered by distance. According to the QA Financial Forum, 34% of QA executives cite remote working as a challenge for maintaining quality standards.
With remote work, the risk of data breaches and intellectual property theft escalates. A survey by BitSight found that 45% of companies had a remote desktop protocol (RDP) compromise after shifting to remote work.
5. Dedicated Employees: Maintaining Focus of Remote Developers
“Out of sight, out of mind.” The old maxim applies to many aspects of working with remote developers. How do you ensure your overseas IT professionals maintain their focus, deliver high-quality work and aren’t moonlighting without your knowledge?
Hiring the correct candidates is where it starts. Hiring part-time and often less dedicated developers can be counterproductive. Full-time employees are more dedicated to you and your company as they don’t have the time to fulfill other tasks and feel more fully integrated.
Establishing regular professional development programs for your overseas development team also helps ensure their ongoing commitment and aids retention. By offering ways for your overseas employee to grow as a professional, they will be more inclined to give you their sole focus and best work. If you work with the correct outsourcing partner, they will often already have a training and professional development program in place for your new hire, meaning you don’t have to dedicate resources to it and you still get to reap the benefits.
Having a proven hiring process is key. For instance, Zipdev has a detailed end-to-end process including a detailed intake with the hiring manager, personality assessments, and company culture/fit review, alongside the typical yet thorough skill and language assessments.
6. Legal Complexities
For American and Canadian companies looking to outsource talent globally, understanding and adhering to the intricate legal and compliance landscape is paramount. The stakes are high, with Deloitte’s insights revealing that 39% of businesses consider compliance risk a top concern when engaging in international outsourcing. The challenge lies in the vast differences in legal systems and employment laws across countries.
Failing to comply with international laws can result in severe penalties. For instance, the European Union’s GDPR regulations can result in fines that reach into the tens of millions of euros or a significant percentage of annual global turnover. In the U.S., the IRS enforces strict regulations on foreign contractors, with stringent penalties for companies that misstep.
How can you avoid these common outsourcing obstacles?
You could go ahead and face these issues and develop a fully outsourced development team on your own…
Or you could take the more convenient and seamless route, and work with a remote staffing partner like Zipdev, that sources top talent exclusively from Latin America. At Zipdev, we not only find you the right technical/development talent for as much as 60% less than in the U.S., but we also handle all hiring, onboarding and compliance that makes overseas hiring a hassle and potentially risky.
Choosing an outsourcing partner that handles the entire end-to-end hiring process for you alleviates the steps and issues you would face going it on your own, including:
Recruiting, screening, interviewing and extending offers
Payroll
Administration of benefits
Confidentiality agreements
Turnover and refilling vacant positions (if you aren’t happy with your developer, Zipdev will replace them at no charge)
Professional development
We are more than your typical nearshoring partner; we are your strategic ally in the world of remote development, de-risking the hiring process for you. Contact us and learn how you can replace the tech outsourcing hassles by working with Zipdev and hiring nearshore developers exclusively from Latin America.