Talento | Employers

Making the Right Call; Software Development Outsourcing vs. Talent Recruitment Outsourcing. What’s the Difference and Which Is Best for Your Company?

by Carlos A. Vázquez    |    November 29, 2019    |      10 min read


Software Development Outsourcing vs. Talent Recruitment Outsourcing. What's the Difference and Which Is Best for Your Company?

All great companies have a vision. They start as a simple idea or a dream and are built from those roots. Sometimes, they even flourish into a behemoth that becomes a household name, like Google, Facebook, Apple, or Microsoft; these companies all started with a vision and—typically— an unusually gifted creator. However, if you look closely at these tech companies’ creation stories, you’ll find that all of them—while usually credited to one sole creator, i.e. Page, Zuckerberg, Jobs, Gates, respectively—were actually born out of some collaboration, partnership, or team. Great ideas and projects are not created in a vacuum, and they are often a result of bouncing ideas and the fusion of different skill sets and talents. This same principle stays true as a company grows, manifesting itself across different areas and into specific teams. 

Tech companies have long understood this, and it’s why hiring their next software developer, programmer, or team member is a decision they cannot and do not take lightly. It may define the quality and rate of the work they produce for months and years to come. It may mean the difference between consistent growth and innovation or a staggering workforce that struggles to find its pace. 

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So, how do tech companies hire and build robust and productive teams?

They strategize, and they build productive teams. They follow proven business models and adjust to their company culture. One of those models or practices is focusing on your core business processes – your secret sauce –  and delegating the rest. 

So, what exactly is an effective strategy when it comes to company growth and innovation?

The short answer: outsourcing. 

The long answer: the right kind of outsourcing depending on your company’s needs and short term and long term objectives. If you’re looking to augment your talent and enhance the quality of your overall output, outsourcing talent recruitment or workforce augmentation is designed for companies that are in that crucial development stage, on their way up, or looking for the right mind and skill set to jumpstart and cultivate innovation.

Invest in a Team, not In a Task — Workforce Augmentation as an Expansion Strategy

Teams make companies. The right synthesis of talent, skill, and leadership is what propels them to the next level. Here at CodersLink, we have invested a lot of time and resources researching how companies achieve the most productivity and growth through different outsourcing models. 

Software development outsourcing is risky because the model does not guarantee any real control, quality, or long-term engagement. We wrote about this in a previous blog. In fact, outsourcing on a project-by-project basis can destabilize a company’s workflow because there is very often inconsistent quality, underqualified developers, elongated timelines due to communication issues, and hidden costs. 

Talent recruitment outsourcing, on the other hand, allows companies to focus on the most important tasks and only depend on a third party for sourcing the right candidate. This outsourcing model frees up resources, connects you to a trusted and vetted talent pool, gives you control of whom you hire, and aids in augmenting the overall quality of your product or service. 

Let’s take a closer look at how these models have adapted over time and why talent recruitment has become the top choice for companies looking to inject new lifeblood into their team. 

Three Common Outsourcing Models — From Project to Project to Workforce Augmentation

Thanks to technology, the nature of work has changed for professionals across a broad spectrum of industries. For startups and mid-sized tech companies, this opened up their possibilities for finding highly qualified talent that they couldn’t access before. This has resulted in amazing growth from more companies at this stage. 

Today, there are different models of outsourcing that produce different results and provide different degrees of flexibility and opportunity for growth. They are as follows:

Software Development Outsourcing/Project Outsourcing

This is the early approach, and perhaps the most often thought about when the term outsourcing comes up. With this model, you go through an outsourcing company and hire a developer for a single project or task. 

It might be a good option if the project is not tied to a core function of your company, and if the project is not likely to change or requires highly specialized talent. With most software development outsourcing, you are not working directly with the developer and have little control over the quality of the work in progress. What ends up happening then is if there is a required change or a need to solve a problem, it not only costs you more, but you can’t be sure of the ability of the developer to deal with unprecedented issues. Early on, companies discovered that this model doesn’t serve for a long term improvement of the workforce and is sometimes detrimental to the team and progress overall. 

Talent Recruitment Outsourcing/Workforce Augmentation

A business strategy designed to help businesses enhance skill deficiencies and find the right candidate to add to their team. Recruitment process outsourcing is a game-changer, as it removes the recruitment function from the hiring business and hands the responsibility to an outside source. 

In most cases, a hiring partner like CodersLink, who specializes in recruiting talent in that particular field, will vet them, fill out paperwork, and perform preliminary recruitment requirements. After that, the tech company takes over and goes through its own hiring process with already qualified candidates. The model is effective in lifting the recruiting responsibilities that take time, effort, and resources from the hiring company and placing that task in the hands of an experienced hiring partner that works with you to get the results you need and takes care of the paperwork. Companies that use this model report better and more effective results. 

Dedicated Development Center or DDC

Perhaps the least talked about of the three, but very much an option for many companies that are ready to make the leap and dedicate resources entirely to building their team. With this model, a company will look to access different talent pools and benefit from lower labor costs and or taxes. With this approach, the company still maintains full control over the work process and who jumps onboard their team. There is one of two ways to engage with a dedicated development center approach: 1) Partnering up with a company that provides recruitment services (hiring partner) that is established and familiar with the locale and finds/hires/assembles the team. CodersLink, for example, works in Mexico, recruiting and finding talented developers with varying specialties and work experience and establishing a connection with the talent pool of the region. 2) When a company opens up its own dedicated development center. If you’re looking to hire 40 or more employees from that locale, this might be an option. 

Re-Thinking the Function of Outsourcing — Choosing the Right Option for Your Company

While outsourcing still carries negative connotations for some, as we wrote previously, the term is actually quite elastic and today is applied in a variety of contexts. The demand for developers in the U.S is big and not always met by the numbers, so the right type of outsourcing provides the opportunity for rising companies to meet their tech needs and save money on overhead costs.  

Some companies continue to see software development outsourcing as the go-to choice, but they fail to see the many disadvantages and unknowns that emerge when working with this model. Finding the right outsourcing model is all about establishing partnerships with your workers. 

So, how do you choose the best option for your company? 

It depends on a variety of factors. Here are some scenarios that might give you an idea:

Scenario 1: 

You have a growing company and find yourself in need of talented software developers and coders. 

  • With software development or project outsourcing, you may find someone that gets the project done but there will be little progress in terms of building relationships or expanding your team. You’ll have to start all over on the next one. 
  • With staff augmentation or DDC, a new project will be a learning experience for you and your team and provide an opportunity for engagement and collaboration. This will build the foundation for a productive creative team that works together towards company goals.

Scenario 2: 

You have a long-term project or a very specific short term project that requires a highly skilled developer that can react and adapt to changing requirements.  

  • With software development or project outsourcing, you don’t know the level of skill of the developer working your project. You have not established a relationship with them, nor do you know how well they work under changing circumstances or how they adapt to new demands.
  • With workforce augmentation or DDC, a developer will be immersed in your team and company culture, will understand your mission, objectives, and is, therefore, more likely to do work that matches those ideas.

Scenario 3: 

You have a project that is complicated and likely to change during the development process. 

  • With software development or project outsourcing, it may be challenging to communicate the changes to the development company. Due to the disconnect between you and the working developer, these communications may get lost, stall progress, and affect the quality and turn around time. Different time zones will make it even more challenging to get the message on time. 
  • With workforce augmentation or DDC, you have a highly skilled and vetted developer whose skills you are familiar with and with whom you have established a working relationship. This facilitates any adaptation or last-minute changes.

Scenario 4: 

Your tech company needs to hire a developer with a specific set of skill sets. Perhaps you need an expert in a particular programming language. 

  • With software development or project outsourcing, you are guessing, at best. You don’t really get a whole lot of control as to what skill set and what degree of knowledge your developer has.
  • With workforce augmentation or DDC, you are able to communicate these needs to your hiring partner or talent recruiter and wait for the right candidate. You will have ultimate control of whom you hire, and you will know their expertise, their education, where they come from, and the work they have done in the past. You will also have total control of the hiring and onboarding process.

Inject Your Company With Talent— Use Workforce Augmentation as Intelligent Strategy

For giants like Google, Microsoft, and Amazon, bringing on a new employee is a hunt for someone that is technically apt, creative, and adaptable. Check out their interview process. They’re looking for someone with a vision that wants to join the team and contribute. These companies know the value of cohesive teams. Working towards workforce augmentation and the building of a creative and resourceful team will be more fruitful for a company in the short and long term. Whether your team is comprised of two or ten people, having effective communication, qualified developers, and real collaboration will enhance your output quality. Through this model of outsourcing, you not only have more control over who is working your projects, but you have the ability to slowly assimilate them into your company culture and bring them on board your company’s vision. When software developers feel part of a team, they are engaged and more productive

Check out how CodersLink can help you build your team. And tell us, what are you looking for in a tech team? What qualities are the most important to your company?

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