Before we proceed, let’s decode the difference between offshore vs. onshore teams. Both onshore and offshore companies are very much capable of doing the same task. But the primary difference is what the dedicated time taken is? What is the quality of work and cost associated?
This blog will help differentiate between onshore and offshore companies, including the pros and cons.
Outsourcing projects has become the new norm when it comes to mobile & web development.
This trend is quite prevalent today as companies wanted to focus on their core business necessities. One of the reasons why offshore vs onshore outsourcing has become the way to go to execute more significant projects.
What Is An Offshore Company?
An offshore company refers to an entity/firm that takes part in offshoring activities. Many businesses in the United States looked into the difference between offshore and onshore companies and started outsourcing their services to offshore companies, considering the low wages.
For companies abroad, it is quite difficult for them to sublet work to domestic professionals. Hence, it is always a prudent idea, a sense of comfort, and outsourcing services to an offshore company.
This way, you can find knowledgeable, skilled, and English-speaking workers worldwide in countries like India, the Philippines, Eastern European countries, or even Mexico to outsource projects to leading software developers in India for maximum output.
Low labor cost: The most significant advantage of outsourcing an offshore company is comparatively the lower cost than hiring domestic workers.
Quality: Offshore companies are skilled workers rendering quality services meeting all specific requirements.
Communication: Offshore companies always remain in touch via a virtual medium i.e. phone or email, common in pandemic times.
Different time zones: Working with an offshore company often means dealing with different time zones. As a result, you may experience delays in communication.
Cultural differences: You may experience cultural differences while dealing with an offshore company. The language barrier is not uncommon, either. Even if they speak English, they may not be their native or first language. Therefore, be careful while passing out instructions to avoid coming out as offensive.
Resolution issues: It is always easy to resolve a domestic company problem. Dealing with a foreign court can have some issues; however, this can be quite expensive and tedious.
While it may be easy to solve a domestic company’s issue, offshore companies cannot say the same. You will have to deal with a foreign court if you have an issue with a foreign worker, which can be an expensive and tedious process.
Related Blog: WHY OUTSOURCING IS IMPORTANT FOR STARTUP PRODUCT DEVELOPMENT?
What Is An Onshore Company?
An onshore company is an entity incorporated in a home country with the sole purpose of doing business within that specific jurisdiction. In case, offshoring is not an option or appears feasible. You can choose to outsource your services to companies located in your local country. You may have to spend more money in terms of labor costs, but the benefit of this is that you are working with local workers. That means there is no such language barrier or cultural differences to deal with.
Proximity: The first advantage of hiring an onshore company is that they are close to your business. That means it can be easier for you to monitor the projects you have outsourced to them.
Communication is easy: The best thing about working with an onshore company is that you have the leverage to communicate in the same language. Therefore, you can understand each other very well, with no zone complications.
Regulations: Dealing with an onshore company means that you are both governed by the same rules. Therefore, it is easy to tell if the onshore company does not comply with your country’s law and regulations, raise the alarm.
High labor cost: Domestic workers usually command a high rate for offshore companies’ same services. That means you have to spend more money while working with an onshore company.
Limited labor market: When hiring domestically, you limit yourself to just one geographic region when searching for talent. Using an offshore company, you are pulling from multiple geographic areas and ensuring that you are getting the best talent available.
Hiring an experienced developer in the US/UK/Europe costs upwards of $100,000/annul, including salary and other benefits. A similar resource from India would cost around $20,000. This is the one-fifth cost of hiring in-house teams, making more business sense to hire a team of developers working offshore at the expense of a single developer who works in-house.
Not all offshoring saves on the following additional costs:
- Employment benefits
- Space and infrastructure
- Costs of hiring and retention
According to Indeed, the average software developer in the US is $95k.
Average Salary of A Software Developer in The US
Also Read: Why should you hire developers from ValueCoders?
Disadvantages of hiring in-house teams include:
One has to comply with employment regulations. Employee compensation and benefits have to be paid to in-house teams. The infrastructure and space costs of hiring in-house resources are much higher in the case of on-shore groups.
Advantages of hiring offshore teams:
Offshore teams work with best-in-class infrastructure and technology. The latest cloud tools are proving to be simplified management—online tests in hiring quality resources.
The offshore outsourcing companies offer a dedicated project manager to ensure the timely delivery of projects. Most IT organizations that outsource their services to offshore companies say that their cost has been lower than hiring in-house resources. Outsourcing Cost Success Rate_1Businesses looking to hire expert offshore teams must choose a professional agency like ValueCoders for:
- Hassle-free and quick hiring
- Non-disclosure agreement
- Timely project delivery
Offshore and Onshore work are the two aspects of executing business. Both have their own gray and dark spots. Does it depend on your project requirement on how it works? When globalization is squeezing the business channel, both modalities are complementing each other. This is why offshore development projects in India are peaking new when tackling years, perhaps the most challenging time. So don’t leave your guard to seek services from firms like ValueCoders.