Remote versus offshoring in software development

Human Resources, Working remote

Remote versus offshoring in software development

Andreas Creten

Andreas Creten

As you may have noticed, we are huge fans of remote working and we never pass on an opportunity to explain the concept to our customers, partners and practically anyone else who is interested. Some would call it preaching, we call it enthusiasm.

One of the questions that always pops up in these conversations, is: “What’s the difference between remote working, offshoring or nearshoring?” So we thought it would not be a bad idea to devote a separate blog post on this issue.

Offshoring = two teams

The thing with offshoring is that you are basically setting up a second office in another country, usually because it has a lower cost of labour. But a second office means that you basically end up with two separate teams, each with its own culture and habits, making team collaboration harder.

Overall, we see an ongoing decline in the popularity of offshoring. In my opinion, it only makes sense if the offshore team can work on an isolated task, for which they do not need to communicate with other team members all the time. This is especially true when the teams would not be sufficiently fluent in English or any other common language everyone could use.

No real cost advantage

Moreover, hiring people remotely for a cost efficiency advantage only is not as sensible as one may think. At the end, the cost per employee will be more or less the same. For example, you need to invest in flying those people in at least once a year, which is expensive. Trust me: we know. Moreover, it’s not really about labour cost, it’s about skills and productivity, and productive people tend to cost more or less the same all over the world.

In our case, we work with a number of people in foreign countries because of their specific skills, because they actually contribute something to the team that we could not find here. In case you were wondering: we have got three colleagues in Brazil, one in Canada, one Portugal and one in France.

Out with the water cooler

When you work as a remote team, your employees will most likely sit at home or in a coworking space near where they live. Of the fifteen or so madewithlove employees who live in Belgium, only five or six frequently can be found in our offices. Our company culture is created online, through our communication channels instead of the water cooler (certainly not the fax machine, indeed). The result is a company-wide culture, across continents and languages.

It also increases the productivity of your employees. As Jason Zimdars, who is a UI designer at Basecamp, puts it: “The next time you have a question for a coworker, try writing it out as if they were 1,000 miles and three time zones away – even if they’re sitting right next to you. You might surprise yourself with the answer.” Funny side-effect: some team members that speak the same language still communicate in English because they are so much used to doing it.

Everybody is equal

A very important aspect of remote working – and one that often leads to failure if you neglect it – is making sure that everyone is treated in the same way. You cannot create a ‘headquarters’ or ‘home country’ team and treat all the others as part of a remote team. All of your employees should be in the remote team, even if they prefer to work every day in the main office.

I recently had a job candidate who was working remotely for another company. He used to go to the office once a week – a six hour commute from where he lived. When he was in the office, he felt very much included in the team, but as soon as he returned home, that feeling was immediately gone. He noticed that a lot of decisions were taken by people who were in the office more often, where they discussed matters face to face instead of using remote communication channels. After four months, he quit, realizing that this is not how remote should be done.

For us, remote working is not a gimmick, or something that has come about by chance. We are a remote company because we want to hire the best people. By going fully remote, we make the world our talent pool. Treating people in Belgium in the same way as the ones overseas makes growing our team very easy. We have a very detailed on-boarding process with a buddy system to make sure new hires are productive from day one (it’s day two, actually). Again, if you really want to know how it is done, drop me and note and I’ll be happy to tell you.

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Andreas Creten

Andreas Creten

Co-founder and honorary member of the positive ADHD movement. Andreas codes, takes decisions, arranges deals and processes his emails faster than a lightning bolt. He seems to have been granted more than 24 hours in one day, but nobody knows just who he bribed for that. If he keeps on doing all those nice things for madewithlove, nobody will be complaining.

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