How To Hire and Manage an Outsourced Development Team: A Comprehensive Guide

Outsourcing is a cost-effective solution to bring software development projects to life with skilled, dedicated talent located outside of your local market.

With the right outsourced team, you gain skilled collaborators who are invested in the success of your software projects and the long-term growth of your company.

However, choosing the wrong outsourced development team can lead to misaligned priorities, delayed timelines, and higher costs—risking the quality of your final software product. 

Even once you’ve hired an external team, it’s critical to understand how to manage it properly to ensure its continued success in the long run.

In this guide, we’ll cover how to hire and manage an outsourced development team effectively. By the end of this article, you’ll have learned the benefits of outsourcing, how to unlock its full potential, and how partnering with a hiring company can simplify the process.

Advantages of Building an Outsourced Development Team

Given that 60% of developers are already working fully remote, it’s natural to consider outsourcing your entire development team. Whether you’re a startup aiming for rapid growth or an established business looking to streamline costs, outsourcing offers unique benefits to help meet your business objectives. 

Here are the advantages of building an outsourced development team:

• Reduced costs and operating expenses: Compared with hiring in-house developers, outsourcing to external development teams can significantly reduce overhead costs, including salaries, office space, and equipment expenses.
• Flexibility: Outsourced teams can easily scale resources up or down based on your software development project’s needs without the traditional long-term commitments (or lengthy delays) of local hiring.
• Deep talent and expertise: Software development outsourcing provides access to vast pools of talent with specialized skills and industry expertise. This means you can immediately benefit from the experience of skilled professionals without the need to invest in extensive training for in-house software developers.
• Focus more on core business activities: By delegating development tasks, your in-house team can concentrate on key business areas, enhancing their productivity and strategic focus.
• Access to cutting-edge technologies: Outsourcing providers often already use the latest tools and technologies, giving you access to advanced tech stacks without additional costs or training.

With an outsourced team, you get to focus on strategy and innovation, leaving the technical aspects to a capable partner that drives your project’s success.

Steps To Hire an Outsourced Team of Developers

To hire remote developers for your outsourced team, you’ll need to take a thoughtful approach to ensure a successful partnership, especially since a lack of coordination is the biggest hurdle for transforming tech functions.

Following these key steps can help you find the ideal outsourcing partners and lay the groundwork for smooth collaboration:

1. Define project requirements

Define the scope, objectives, and technologies required, as well as the expected project timeline. Clearly defined requirements provide a solid foundation, helping potential outsourced teams understand your vision from the start.

2. Determine your budget

Set a realistic budget that reflects the project’s scope, desired quality, and timeline. Many outsourced teams are flexible when it comes to pricing models, offering hourly, fixed-price, or retainer-based arrangements, so narrow down the most viable options for your needs to prevent misunderstandings about costs later.

3. Start your search

To find a well-suited remote team, look through various channels:

• Online directories: Platforms like Clutch and Upwork feature freelancers with a wide range of experience and skills, complete with reviews from previous clients.
• Personal referrals: Asking colleagues for referrals often leads to trusted, reliable candidates.
• Google search: Search for keywords that will help you find professionals who specialize in your required technology, programming language, or industry.
• Recruitment agencies: A software developer recruitment agency can help you find developers who have niche skills and are pre-vetted for technical proficiency.

4. Evaluate skills and compatibility

Set up a structured evaluation process to measure potential providers’ technical capabilities.

Beyond technical qualifications, assess communication, problem-solving, and cultural fit. Regardless of company size or core business functions, most employers specifically look for soft skills like communication when hiring software professionals. 

This is a good practice, as these skills are necessary for collaborating with your in-house team and other stakeholders.

5. Arrange a trial period

A trial period of a few weeks lets you observe the team’s performance, responsiveness, and alignment with your workflow. It helps ensure compatibility without fully committing.

6. Protect your intellectual property

Create non-disclosure agreements (NDAs) and define data handling practices to make sure your sensitive information is secure, especially when dealing with proprietary software or technologies.

By following these steps, you can set the stage for a successful, strategic partnership with an outsourced development team that aligns with your vision, protects your intellectual property, and delivers strong results.

How To Manage Outsourced Development Teams

Managing an outsourced development team requires careful planning and consistent communication. Here are key strategies to help you manage outsourced teams efficiently: 

Establish clear communication channels

Be sure that you’ve properly set up direct lines of communication. Use platforms like Slack or Microsoft Teams to create a virtual space for discussions.

Regular check-ins align everyone on goals and deadlines to ensure smooth project execution. This approach fosters transparency and trust, which are crucial for a productive working relationship.

Utilize collaborative tools

Adopting project management tools like Trello or Asana can streamline collaboration efforts. These platforms allow team members to track progress and assign tasks easily. With everything in one place, it’s simpler to stay organized and ensure everyone knows their responsibilities.

Foster inclusivity in decision-making

Inclusive teams are 87% more likely to make better decisions than those that aren’t. When everyone feels valued, it boosts morale and fosters ownership. This is especially true in outsourced teams, where diverse perspectives can lead to innovative solutions.

Implement a unified process

Standardizing processes can eliminate confusion and promote efficiency. Clearly define workflows and expectations for the external team to help everyone stay on the same page, regardless of where they are located.

Assign collaborative projects

Create opportunities for team members to work together. Collaborative projects can strengthen relationships and enhance problem-solving. By working side by side, even virtually, team members can establish a strong sense of camaraderie.

Monitor and provide feedback

Regularly evaluate the team’s progress and provide constructive feedback. This will allow you to identify areas for improvement and reinforce positive behaviors. An ongoing feedback loop ensures that everyone is aware of their performance and encourages continuous growth.

Cultivate a supportive culture

A supportive culture facilitates collaboration and makes it easier to identify and address issues. Encourage your outsourced team to ask questions and request resources or support as needed.

Invest in relationship building

Regular social interactions, even virtual ones, matter. Building strong relationships with your outsourced team creates trust in the workplace, so invest time in understanding your team members. A solid relationship can significantly improve productivity and satisfaction on both sides.

Outsourcing software development to nearshore locations like Latin America (LatAm) can make it easier to build productive and cooperative relationships. Professionals in these regions have similar work practices and norms to those in the US, leading to smoother interactions and, ultimately, more cohesive software.

3 Models of Outsourcing Software Development Teams

There are several different methods for outsourcing software development teams, each with unique dynamics and benefits. Understanding these different models will let you choose the best approach for your needs.

1. Staff augmentation

Staff augmentation involves adding external developers to your existing team through a third-party vendor. It’s beneficial when you need to scale quickly for specific projects.

By augmenting your staff, you gain immediate access to specialized skills without long-term commitments. This flexibility allows you to respond quickly to changing project demands while maintaining control over your team.

2. Dedicated teams

With the dedicated development teams model, an external agency provides you with a group of developers focused solely on your project at all stages. This means they have a similar level of engagement and understanding of your projects as an in-house team, even though you don’t hire them directly.

The dedicated software development team becomes deeply integrated into your company culture and business goals. This alignment can lead to higher-quality work and more innovative solutions tailored to your specific needs.

3. Outsourced development services

This model involves hiring a third-party service provider to handle your entire development project. It can be a good choice if you lack the internal resources or expertise to handle any aspect of software creation.

With outsourced software development services, you benefit from the provider’s experience and established processes. This can lead to cost savings and quicker project completion while freeing up your internal team to focus on core, non-software-related business functions.

Why Partner With a Hiring Company To Build Your Outsourced Development Team?

Here’s why partnering with a hiring company is often the best approach to outsourcing development:

• Faster access to talent: Hiring companies already have talent pools of qualified candidates, which can significantly reduce the time you spend searching for the right fit.
• Streamlined hiring process: From initial screening to onboarding, hiring companies handle the essential steps involved in recruitment, making it a seamless experience for you.
• Reduced risk: By handling vetting, background checks, and compliance for you, hiring companies lower your risk of misalignment or non-compliance.
• Expertise in matching talent: Hiring companies specialize in pairing teams with projects that fit their expertise, ensuring a higher return on investment (ROI).
• Cost benefits: Leveraging established hiring networks and resources can save costs associated with direct recruitment and onboarding.

Partnering with a hiring company can make building an outsourced development team faster, easier, and more cost effective than other outsourcing methods, like having to sort through and screen candidates on freelance platforms that can’t guarantee quality and expertise. 

Final Thoughts

Hiring and managing an outsourced development team can transform your business, especially when you do it strategically. Outsourcing offers unparalleled flexibility, bringing the best talent to your team while allowing you to remain agile.

At Near, we simplify the outsourcing process by helping you find, hire, and onboard pre-vetted Latin American developers who are fostered by a thriving industry. 

For a detailed look at how you can hire highly skilled, motivated professionals ready to support your business, download our free guide to hiring remotely from the LatAm region.