Direct Remote Hiring vs Nearshore model: the pros & cons

Posted March 21, 2022

Does your company need to grow its software development team? Discover which hiring model – direct remote hiring or nearshore – translates directly to productivity and effective results for your company.

After team setup, comes the creation of value

In the first part of this article, we listed several aspects to consider when deciding to recruit remote tech. talent. Those related to setting up a remote team, and showed how the nearshore model has several distinct advantages over direct hiring.

In this second part, we tackle the all-important day to day activities of engineering teams in the creation of value for your company. So, let’s dive in.

If you didn’t read part I yet, please take a look at it.

Team Dynamics & Collaboration

Here we consider all the aspects related to team dynamics, collaboration, mentoring, etc.

Key: 1 to 5 stars, 🌟 Worse; 🌟🌟🌟🌟🌟 Better

Topic	Direct remote hiring	Nearshore model	Notes
Team operational coordination	★★☆☆☆	★★★★☆	When you reach multiple members of a team or teams in a country, there are benefits in having them under some local management: to make more productive use of project downtimes or slack-time within the teams. Or even managing vacation periods within the deliveries for the least impact, or redirecting efforts from project A to project B. All this is much more agile with some local management than as individual scattered workers.
Face-to-face team-dynamics	★☆☆☆☆	★★★★★	There’s no contest here, nothing beats having your members working together around a table, having coffee breaks and going for lunch together, etc. A nearshore provider will foster these and other events regularly in their office or HQ even if people are now working remotely most of the time. This sense of belonging contributes to lower employee turnover thus higher efficiency and knowledge retention for longer.
Mentoring / Developer tech. support	★★☆☆☆	★★★★★	Yes, a group of direct hires will support and help each other over slack and/or video-call, that’s expected. But a nearshore team that periodically joins up to work together at the office has that collaboration and support on a whole different level. Plus, when a more junior member joins an existing nearshore team has close support from the team and their team leader, resulting in a much shorter ramp-up time. All of this is done at the lightning speed of the native tongue. In addition, a nearshore provider has several other very knowledgeable teams in a diverse set of technologies and business sectors so the pool of helpful resources is potentially much higher and more accessible.
Tech. Design & Architecture	★☆☆☆☆	★★★★★	Nothing beats the richness, speed and immediacy of discussing ideas and designs in-person over an actual physical whiteboard, no matter how much technology tools have evolved. That’s the difference between a distributed group of direct hires collaborating over zoom vs a nearshore team working in an HQ office with a proper meeting room.
Zoom fatigue	★★☆☆☆	★★★★☆	Need we say more? Ok, so that problem also exists in the hybrid working arrangement that nearshore has adopted. But it may happen to a lesser degree since these are people that have met and eaten together (not to mention company events and team building events), so they all know each other in a much more holistic manner so less need to maintain the professional mask on at all times, leading to less stress, less fatigue and more productive work.

Retention & Productivity

Last but definitely not least, we list the remaining aspects we considered when comparing both methods of building up your team.

Key: 1 to 5 stars, 🌟 Worse; 🌟🌟🌟🌟🌟 Better

Topic	Direct remote hiring	Nearshore model	Notes
Performance assessment	★★★☆☆	★★★☆☆	We perceived this to be equivalent between the two strategies. Either a) done by you directly or b) by the nearshore provider with your inputs. With option a) you have to act on the assessment with bonuses or promotions whereas for b) that is abstracted and handled by the provider absorbing most of the costs from you. Option a) may reduce churn at the cost of higher employee cost and option b) saves you costs & has more predictable costs YoY with little impact on churn.
Retention / Turnover	★★☆☆☆	★★★☆☆	When considering moving from a project or company, employees usually evaluate pros & cons. Regularly, employees also tend to put on the equation some less tangible aspects, such as leaving friends behind while working or leaving a certain work location.
Productivity	★☆☆☆☆	★★★★☆	It is quite obvious that the empathy levels between the team members that can potentially be reached with an onsite or even a hybrid model are far higher. Having a team that can easily be gathered physically for meetings, workshops, workforces and (team building) events, is much more likely to be a better team. And we all know that the more quality the team has (as a team, not as a set of individuals), exponentially the greater its productivity will be. In other words, this point is relevant not only for retention purposes, as described above, but also for productivity purposes.

Topic

Direct remote hiring

Nearshore model

Notes

Performance assessment

★★★☆☆

We perceived this to be equivalent between the two strategies. Either a) done by you directly or b) by the nearshore provider with your inputs. With option a) you have to act on the assessment with bonuses or promotions whereas for b) that is abstracted and handled by the provider absorbing most of the costs from you.

Option a) may reduce churn at the cost of higher employee cost and option b) saves you costs & has more predictable costs YoY with little impact on churn.

Retention / Turnover

★★☆☆☆

★★★☆☆

When considering moving from a project or company, employees usually evaluate pros & cons. Regularly, employees also tend to put on the equation some less tangible aspects, such as leaving friends behind while working or leaving a certain work location.

Productivity

★☆☆☆☆

★★★★☆

It is quite obvious that the empathy levels between the team members that can potentially be reached with an onsite or even a hybrid model are far higher.

Having a team that can easily be gathered physically for meetings, workshops, workforces and (team building) events, is much more likely to be a better team. And we all know that the more quality the team has (as a team, not as a set of individuals), exponentially the greater its productivity will be.

In other words, this point is relevant not only for retention purposes, as described above, but also for productivity purposes.

Conclusion

Despite the allure of direct hiring of remote employees overseas, when hiring more than a single person, there are really obvious advantages of the nearshore model that translates directly to better and more effective results for the company.

If we consider the nearshore model versus the current trend of direct hiring of sole individuals across a range of different countries, the benefits of nearshore ranging from cost reduction to improved returns in a whole host of different categories far outweigh the short-term benefit of cost-savings in a single category of direct hiring by a wide margin.

From the cost-savings on recruiting, hiring and managing payroll, then to higher returns in team coordination and their own sense of belonging, productivity and efficiency from ramping-up to solving complex and urgent issues in production to designing complex new features or systems, the nearshore team has the strongest potential to best serve your company.

And we have the business cases to show just what can be achieved with solid nearshore teams custom-built for your needs, you can read them here.

e.near’s friendly team, our culture of companionship and respect and the super convenient office location are some of the elements that none wants to lose and may most likely hold back some of our employees from leaving us.