For the Chief Technology Officer (CTO), selecting the optimal strategy for organising a software development team is a crucial task. This judgement call requires meticulous assessment, as the hazards inherent in software development must be factored in. While certain CTOs might choose to exclusively engage permanent engineers, others may outsource development in a bid to expedite the process and achieve ambitious project objectives. Ultimately, CTOs must weigh up the alternatives and determine which one will be the most advantageous for their team.
In my capacity as the Chief Technology Officer at Works, I have faced this specific challenge on several occasions. Upon careful deliberation, I have realised that to fulfil all of your development goals, it is crucial to possess an extensive knowledge of the distinctions between hiring and outsourcing, as well as a comprehensive understanding of how to unleash the full potential of both.
The Top Three Priorities to Keep in Mind When Hiring
As an engineering manager, it is crucial to quickly assemble a software development team that is composed of experts possessing the requisite skillset to deliver the desired outcomes, while also paying heed to the budgetary constraints. Therefore, when forming a software development team, the three primary goals are to enlist highly talented engineers swiftly, with a superior level of expertise, and at an affordable expense.
It can be immensely challenging to fulfil all three in-house engineering positions in one recruitment cycle. In order to maximise the odds of success, I have arrived at the realisation that utilising a blend of approaches is the only dependable way to occupy all three positions.
Before hiring new team members, it is imperative to determine your desired outcome. In the case of establishing a Scrum Team this year, my research indicated that hiring personnel within the United States would cost approximately $1 million more than hiring personnel from abroad. This makes in-house recruits the optimal choice for complex projects that are vital to your intellectual property but may potentially surpass your budget. Nevertheless, not all projects or teams are ideal for outsourcing. To determine which approach is most suitable for your specific circumstances, it is crucial to establish your initial requirements and expectations.
Further below, I will examine the advantages and disadvantages of each option:
Advantages and disadvantages of in-house employment
Pros: As an employer, it is crucial to demonstrate a strong commitment to your company’s success and instil similar passion among your workers. When you bring on new full-time team members, they are likely to be highly devoted to the success of the business and contribute fresh insights to the product development process. As their manager, it will be your primary responsibility to supervise their work and ensure that they are meeting the required performance benchmarks. However, it is vital to recognise and capitalise on the invaluable insights they can provide, as their extensive knowledge of the product can prove to be a significant asset in the long term.
Cons: Due to financial and human resource limitations, locating suitable candidates to occupy full-time positions can be a daunting task. Searching for the right person may be time-intensive, and compensating them appropriately can put a strain on the organisation’s budget, posing challenges in maintaining a healthy financial performance.
What are the advantages and disadvantages of outsourcing?
Although we have primarily resorted to outsourcing for certain projects or assignments in the past, there are, in fact, a plethora of outsourcing strategies available, encompassing short-term staffing solutions to the assimilation of permanent personnel into our team.
Pros: Compared to recruiting in San Jose, California, outsourcing internationally to Budapest, Hungary, is more financially advantageous. Outsourcing can present organisations with an economical recruitment solution, enabling them to save money while gaining access to the most proficient candidates.
For a period of three months, I collaborated with an outsourced specialist to facilitate the transition of a project from Angular to React. This specialist not only provided access to specific skills and knowledge but also acted as an instructor to my software development teams, teaching them the intricacies of the new framework. Ultimately, he provided much more than just deliverables; he empowered my teams to gain a comprehensive understanding of the React framework.
Hiring an external team of experts to concentrate exclusively on the requirements of a particular client can offer enormous benefits, as it can significantly decrease the workload of in-house staff. Furthermore, the significance of having a diverse team of professionals from varying cultural backgrounds should be acknowledged. This notion was exemplified in a recent project pertaining to the creation of euthanasia software, where engineers from different nations contributed invaluable perspectives and ideas.
Cons: Undoubtedly, there are challenges associated with outsourcing specific tasks. These may include a dearth of internal expertise and a lack of dependable oversight over the quality and efficiency of deliverables. To avoid the need for frequent code edits and revisions, it is vital to ensure that proper documentation is in place.
It is crucial that we deliberate over both short-term and long-term staffing alternatives for our organisation. In my view, a long-term embedded strategy is the most appropriate, as permanent contractors possess the added advantage of feeling a greater sense of responsibility towards their role.
This is the sort of work I usually delegate to external contractors, particularly in the initial phases when establishing credibility:
- Extensive Knowledge
- Collaboration and Integration Efforts (e.g. having external talent construct marketing integrations)
- Maintenance of the Code
- Partially-Started Development Tasks (e.g. Mobile)
For a prosperous outsourcing endeavor, it is crucial to establish sturdy safeguards. To guarantee a seamless onboarding process for all stakeholders, it is imperative to set attainable objectives and provide comprehensive instructions. This approach will streamline the process, ensuring that all parties align and comprehend the project’s scope.
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