Top 3 Signs Of A Great Offshoring Destination for Software Development

Offshoring software development to a different country is not a foreign concept in the tech industry. In fact, in recent years, this strategy has boomed in popularity among Singapore startups and growing businesses as the country faces its worst tech talent crunch. This has forced companies to rethink their recruitment approach and look beyond Singapore for new talents.

Even so, building a remote tech team is far from easy due to the higher up-front investment and time required. Firms are now faced with the dilemma of choosing the best offshore country amongst the plethora of available destinations that each comes with its own perks and shortcomings 

To help you narrow down the list quickly, here are our top 3 signs of a great country for building offshore tech teams.

Wide Tech Talent Pool 

An important factor to consider when assessing suitable destinations is their tech talent pool. Firms must judge the country’s workforce based on both their quantity and quality.

As the accessibility of tech talent is directly influenced by its pool size, firms would have a much easier time securing developers in countries with larger tech workforces. In addition, it is also worth considering the growth rate of the talent pool. This ensures that even as more companies turn to offshore at a particular destination, there would be no shortage of local tech talent. 

For instance, a good example of a healthy talent pool is Vietnam, as it boasts over 400,000 engineers with 50,000 IT graduates added to the workforce annually. As a result, the country has attracted great attention from Singapore businesses for its tech talent.

Nonetheless, having a sizable tech workforce means nothing if they lack skills and experience. So it should be obvious that an ideal country is also well-known for its high-calibre developers. As reported, Vietnam is ranked 2nd in technology capacity among Asia Pacific countries. 

That being said, Vietnamese developers certainly do not lose out when it comes to skillsets, serving a balance between quality and quantity.

Low Salary Expectation And Recruitment Cost

Besides the tech talent availability, cost advantage is another big reason why firms build their own remote tech team overseas. This is where South East Asian (SEA) countries take the spotlight as their developers are not only highly skilled but also much more affordable.

For example, Vietnamese developers are paid on average 40% lower than their Singapore peers. Putting this into perspective, Singapore firms can effectively double their new hires if they recruit developers in Vietnam instead. 

Moreover, cost savings don’t just end at developer salaries. From the recruitment process to office rental to health insurance, companies can save on expenses from all avenues when offshoring. Hence, offshoring to SEA countries is especially popular amongst companies with a tight budget.

Low Communication & Culture Barriers

Developing software is a complex process by itself, with many hurdles developers and product managers have to overcome before the final product is complete. Furthermore, with numerous loops of iteration that occur throughout the development process, execution must be swift and efficient. Because any communication challenges and work culture clashes between you and your remote team can severely hinder development progress. Therefore, it is essential to evaluate these aspects before choosing your offshore destination.

Firstly, it is vital to consider the language spoken by your remote tech team as it is the foundation of any communication. Hence, for a smooth exchange of information, speaking the same tongue would be greatly beneficial for both parties. Suppose that a firm is Singapore-based, then English would be the default language.

Thus, building a remote team proficient in English would be natural for them. In this case, these firms may turn to tools such as the English Proficient Index to gauge the language proficiency of the chosen destination. However, they may not always be accurate. Therefore, we suggest consulting with your network for their feedback.

Another point of consideration is the country’s culture. Sharing a similar work culture with your offshore destination would mean that you can work with them with greater ease. It also means that it would be easier to lead and manage your team as you would have a clearer understanding of what makes them tick. That being said, it is critical to look for teams that have a flexible and adaptive work culture to accommodate the complicated process of software development.

Moreover, we must look beyond the work culture and assess the country’s culture as a whole. This is because social values based on culture have a high chance of directly influencing the working culture. To illustrate, Singapore firms usually look at SEA countries for their offshore team, as these places have similar workplace power dynamics. Hence, making it easier for the remote team to assimilate with the local team. 

Conclusion – A Good Offshoring Destination Promises Sustainable Development

Choosing the ideal location to build a remote software development team is never an easy process. In fact, it requires careful research with in-depth market insights for one to assert the country’s feasibility for offshoring, including the cost advantage, tech talent pool size, and communication barriers. 

As we are located in Vietnam, our opinion obviously will steer heavily toward the country. However, it is for good reason as Vietnam is widely considered one of the best offshoring software development locations in Southeast Asia.

In case you are planning to tap into Vietnam’s tech talent pool, do not miss out on our Vietnamese Developer Salary Report that we recently released. This report will equip you with everything you need to know about Vietnam’s IT landscape and salary rates in 2023 with the latest insights and data.

If your company wishes to build a remote tech team in Vietnam but does not know how, do contact us for an in-depth consultancy or take a look back at our webinar recap, to learn exclusive insights about the country’s tech talent.