Direct hiring of remote tech talent is a surging trend, but does it really stand out versus nearshore? Find the answer here!
Every business solution has its pros and cons. But are you fully aware of them? If you’re not sure whether your company needs a nearshore software development solution or just more in-house employees, after reading this piece you can finally make an informed choice.
Especially after the pandemic, for knowledge-based professionals such as software developers, remote work became an accepted routine. Even with the covid-19 restrictions being lifted, businesses are keeping their remote or hybrid work models. But will this trend stick into the future? We believe so – smart companies will take as much advantage of it as they can.
This means that companies are, for many reasons, opting to hire remotely, whether within or outside their country. Does it mean that the whole nearshore concept will fall out of favour given direct hiring is growing? Given how easy it seems to be to hire remote nowadays you might be wondering “Why not just cut the middleman from this relationship, and reap the benefits?”.
The truth is, despite the fact that the pandemic completely changed the work organisation, direct hiring will never be the same as having a partner nearshore company. In this article, we will show the pros & cons from the point of view of the company opting to direct hire or adopting the nearshore model. The considered factors are numerous so we clustered them in categories and they’re published in two parts. You’ll soon be able to read part 2 in our blog.
Hiring, Onboarding and Scaling
Here we consider all the aspects related to setting up your team.
Key: 1 to 5 stars, 🌟 Worse; 🌟🌟🌟🌟🌟 Better;
| Topic | Direct remote hiring | Nearshore model | Notes |
|---|---|---|---|
| Recruiting effort | ★★☆☆☆ | ★★★★★ | Recruiting requires big effort, and a nearshore provider will take up most of this effort so that only high-quality matches are presented for your final vetting.
A lot of work goes into defining with you the exact profile requirements, making the openings known and visible in the social networks, actively screening and approaching suitable profiles all the way to their own internal vetting before sending the candidate your way. |
| Legal contract overhead | ★☆☆☆☆ | ★★★★★ | When the time comes to actually hire the candidate, is your company ready to deal with all the local labour, financial and tax laws and regulations? A nearshore provider will abstract all that complexity from you so that you can immediately focus on integrating the person into your teams and organization.
Also in case you need to release a worker for some reason, it’s much more straightforward with a nearshore provider than directly with the worker. |
| Payroll effort | ★★☆☆☆ | ★★★★★ | Similarly, the effort of managing payroll in different countries with all the different local labour laws and regulations is something a nearshore provider will free you from. |
|
Team scaling flexibility |
★★☆☆☆ | ★★★★☆ | With your nearshore partner, you get more elastic talent capacity, you can ramp capacity up as well as down, all of course under an agreed scheme and protocol. This translates into much higher flexibility and agility for the business. After the initial members, ramping up capacity also is more efficient as the onboarding and initial training & mentoring is done by the local team which is more efficient than each individual hire doing it directly and remotely with you. |
| IP Protection | ★★☆☆☆ | ★★★★★ | We consider it invaluable in having a nearshore partner to enforce your IP protection not only via their working arrangements but also via legal contracts between companies and in their local labour contract with the worker, besides several other insurances and with the ability to act/react with all legal instruments locally in a much more agile fashion then company vs the individual in distinct countries. |
| Onboarding Experience | ★★☆☆☆ | ★★★★☆ | Everyone will agree on the fact that getting onboarded and educated side-by-side is not only far more pleasant but also incomparably more effective. The nearshore teams will inherit the client’s procedures and adapt them for the nearshore team. This normalization in the onboarding experience is very convenient, not only for our clients but also for the employees |
Working Setup & Conditions
Here we consider all the aspects related to working conditions.
Key: 1 to 5 stars, 🌟 Worse; 🌟🌟🌟🌟🌟 Better;
| Topic | Direct remote hiring | Nearshore model | Notes |
|---|---|---|---|
| Compensation competitiveness | ★★★★☆ | ★★☆☆☆ | Here the advantage is currently with direct hiring obviously, since you’re removing one piece from the chain. However, this is a short term benefit.
Assuming you’re paying the same or slightly lower wage than in your own country, you will soon start experiencing churn to companies in yet higher-income countries paying higher wages thereby cancelling your perceived advantage. |
| Office Location | ★☆☆☆☆ | ★★★★★ | Having a shared office with the team in a prime location of the city well served by public transport helps to break the remote-working routine; bond with the team; have a better sense of belonging; collaborate in-person with you over several days; close reach to after-hours entertainment and cultural events ie. closeness to enjoy what the city has to offer. |
| Commute | ★★★★☆ | ★★★☆☆ | Remote working (typical direct hiring) saves a ton of time on commutes giving back time and options to the worker. But nearshore providers, despite having office HQ, have adapted for hybrid working arrangements, so they can offer you and your team the best of both worlds |
| Office & desk | ★★☆☆☆ | ★★★★★ | Not everyone has suitable working conditions at home for productive work vs having a fully equipped desk and workstation, A/C, good lighting, support services, data centre, etc from a proper office. For some companies, a test lab to house and connect large or expensive equipment (eg. gaming cabinets & cashier terminals) is absolutely required.
Or finally managing the cost of co-working space vs own HQ office space in a prime location with all the above conditions where you can have people from your own HQ to visit and collaborate with your team is a huge advantage. |
This is only the beginning
From this first part of the article, you can already appreciate how the advantages tilt heavily towards the nearshore model which has significant advantages in the process of setting up your team remotely.
But these don’t stop here, the best part is yet to come. In part II we examine issues related to team dynamics, collaboration and retention, a crucial aspect if you want to achieve great things with your teams. And we also list a whole host of aspects to consider before taking the plunge to direct hire remotely. Read it here.
Don’t agree or have something to counter?
If you don’t agree or have some other aspects to add to the table you feel we have missed, we’re all ears and would love to know your perspective. Feel free to get in touch and let us know your thoughts.
If however, you’re convinced nearshore is the way to go for your IT challenges, start by finding how it works and how we can help jumpstart your nearshore strategy.
Feel free to set up a quick zoom call with our Business Development Team at https://go.oncehub.com/BizdevEurope
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