6 Important Steps When Building a Software Development Team Abroad

Svitlana Rumyantseva
Project Manager
Setting up your development team offshore is distinct from in-house team creation. Learn all ins and outs of the successful process in our article. Bonus tips about books your should read included.

Software development is a pressing need for modern businesses from all niches and industry sectors as the entire world is moving online at lightning speed. A popular solution has become to look for offshore hiring solutions. Many countries have responded to the demand by developing entire vibrant labor markets able to satisfy all kinds of development needs

; e.g., the Asian and Eastern Europe outsourcing markets enjoy high popularity among businesses worldwide offering large talent pools and experts of varying expertise.

Companies may opt to hire developers abroad in many situations, be it a challenge of finding the appropriate specialist locally or a market expansion effort with setting up an R&D center with a development team offshore. But is it as easy to set up a coherent, capable team abroad as it may be inside the company? Even in-house teambuilding is connected with numerous bottlenecks, personal frictions, and difficult stages that need to be passed before the team glues altogether. With teams set abroad, the process gets even more complicated without personal engagement and face-to-face interactions coupled with cultural and time zone differences.
So, is the team-building complexity a reason to refuse from the outsourcing plans? In no case! Here is our comprehensive guide on how to build software development teams abroad effectively and which underwater stones to keep in mind when conducting team building and team management.

#1 Conduct Local Market Research

Hiring a freelancer offshore is quite simple, requiring minimum documentation and time. But when it comes to setting your offshore development center (ODC) or establishing an officially operating software development team, the task is not that easy. First, you need to come to grips with the requirements of the local market in which you’re planning to conduct abroad software development activities, that is, study the local laws and taxation. It’s also recommended to hire a local legal consultant who will explain all ins and outs of working in the destination country and will help handle all the administrative hassle.

Next, you need to take care of the legal issues related to your operation, such as registering your offshore software company as a legal entity. Most often, companies prefer to set up foreign subsidiaries instead of entering the overseas market directly, as the latter variant is much costlier and much more complex in legal terms.

Check salaries of developers on the local market, we have prepared reports with developers salaries researched in popular Asia and Eastern Europe destinations and report with developer’s salaries in Central and Eastern Europe countries.

After the legalities are over, it’s time to find the proper space for your new team. Rent an office for it, purchase all the required equipment, conclude contracts with utility providers, etc. This stage also includes hiring all the relevant administrative and supportive staff, such as office managers, assistants, system administrators, just to name a few. Here you go with the ready ODC!

Let’s sum up in a step-by step basic list how you can research local market:

  1. Check local laws
  2. Check tax system
  3. Check salaries and office rent cost
  4. Check bureaucracy level and possible underwater rocks
  5. Consult with local lawyers/accountants
  6. Registering local company
  7. Rent office
  8. Hire staff

For those of you who consider all these steps too much trouble, the best option is to set up an ODC with the help of a staffing vendor (usually it’s outsourcing or outstaffing model). This alternative is especially valuable for companies with limited knowledge of the local market, lack of time for setting everything up on their own and spending time on the administrative tasks. A vendor is likely to manage the entire ODC creation process from start to finish, including the administrative workload, the hiring process, and the legal issues – all done for a certain fee.

The basic list to check when hiring through vendor

  1. Check site
  2. Ask for reviews
  3. Visit office
  4. Discuss process and management details

#2 Consider Culture Differences

As soon as you decide to set up a software development team in another part of the world, you have to take it for granted that cultural differences and challenges will come in the way. To avoid their debilitating impact and conflict arising from a clash of cultures, you as an employer should take proper care of cultural awareness training and preparation among the in-house and offshore team members. It’s always useful to get a different cultural perspective during some formal or informal cultural training and team building sessions as well as keep the quality of communication and relationships under control to intervene early.

#3 Set Clear Goals for the Team

Role ambiguity and unclarity of goals are the worst friends of team effectiveness, even in-house, where the team members have direct access to supervisors and can enjoy the benefit of face-to-face communication. When it comes to outsourced work, the absence of clearly set milestones and goals may undermine the team’s effectiveness and ruin your relationship, thus putting the project completion under risk.

Keeping these issues in mind, you should always set milestone and achievable goals clearly documented and understood by all team members. It’s critical that the offshore team knows and shares your company’s vision and mission, guaranteeing that the entire business is moving in a single correct direction. A valuable tool for efficient long-term planning is SMART – it helps set Specific, Measurable, Attainable, Realistic/Relevant, and Time-bound goals.

#4 Focus on the Team Roles

Only an outstanding software development team in which every person is on his/her right place can spearhead your projects to success, so it’s critical to invest the proper amount of time and effort into the recruitment and hiring process. To achieve that, you need to develop a plan first to understand what team you need exactly, who will perform which functions in it, which roles each team member will fulfill, and what structure the team will possess. After those fundamentals are clear, it’s time to start the recruitment.

Since these procedures are done in the distant, alien labor market, some preliminary research (at, for instance, Upwork or local recruiting websites) is needed to identify the right talent. We recommend assigning a qualified person to that task or hiring a staffing vendor to conduct the talent search for you as it’s the only sure way to engage the right people with reasonable salary expectations.

#5 Invest in Proper Communication

Communication is key to the successful collaboration of the in-house and offshore teams, so it’s strategically important to set a comprehensive communication policy early to prevent any bottlenecks or barriers in the process of work. To achieve effective communication, we recommend taking the following steps:

  • Make precise leadership arrangements without role conflict or ambiguities;
  • Set clear tasks and responsibilities for in-house and outsourced employees;
  • Design a single set of communication rules and protocols for all staff;
  • Set up a schedule of meetings and teambuilding activities for both teams;
  • Organize communication efficiently to address the time zone differences;
  • Focus on proper, efficient communication as an integral component of organizational culture.

#6 Plan the Face-to-face Onboarding

Even though the essence of an ODC is remote, outsourced work, employees in the ODC are likely to work better if they feel that they are valued equally with in-house employees. Thus, as soon as your new team starts working or welcomes critical specialists, it’s recommended to pay a personal visit to the ODC for an acquaintance and onboarding. The in-person meeting with strategically significant staff, such as Project Managers, is vital because these are the people with whom your in-house team will work directly, so it’s always better to know each other in person to start the collaboration fruitfully.

Bonus Tip: Top 5 Books to Read about Team Management

Practice makes you stronger, but there should always be some time and space for theory and education. Reading more on team management will help you hone the skills and team-building talents to create perfect teams. Here are our top 5 recommended sources for team managers in 2019:

Five Dysfunctions of a Team and Crucial Conversations: Tools for Talking when the Stakes are High (Patterson, Grenny, McMillan, Switzler, & Covey). The book is an invaluable tool for managers helping them to talk out team problems and manage the team’s dynamics properly.

Five Dysfunctions of a Team and Crucial Conversations: Tools for Talking when the Stakes are High (Patterson, Grenny, McMillan, Switzler, & Covey)You Can’t Send a Duck to Eagle School: And Other Simple Truths of Leadership (Anderson). This work inspires leaders to hire excellent employees and manage teams brilliantly instead of trying to nurture the talent that the staff doesn’t have. It offers insights into the limits of team leadership and teaches to navigate within them to achieve the team’s maximum potential.

You Can’t Send a Duck to Eagle School: And Other Simple Truths of Leadership (Anderson)The 100/0 Principle: The Secret of Great Relationships (Ritter). In this book, Al Ritter shows how healthy relationships function as a clue to work-life balance, resourcefulness, and outstanding performance. Use this exceptional guide as a path to stellar workplace relationship building.

The 100/0 Principle: The Secret of Great Relationships (Ritter)The 17 Indisputable Laws of Teamwork: Embrace Them and Empower Your Team (Maxwell). John C. Maxwell is a guru of business leadership who shares decades of his experience to help team managers excel in their daily work challenges. Some of the tips he gives are to focus on the goals more than on the roles, to consider the weakest link in the team, and to prioritize the team’s vision for boosting their confidence.

The 17 Indisputable Laws of Teamwork: Embrace Them and Empower Your Team (Maxwell)The Team Building Activity Handbook (Venture Team Building). The practice is much better than theory, especially when business success is at stake. Use this deeply practical guide from Venture Teach Building experts to help your team grow with fun, useful activities.

The Team Building Activity Handbook (Venture Team Building)If you want to build a software development team abroad follow these easy steps:

  1. Conduct Local Market Research
  2. Consider Culture Differences
  3. Set Clear Goals for the Team
  4. Focus on the Team Roles
  5. Invest in Proper Communication
  6. Plan the Face-to-face Onboarding

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Svitlana Rumyantseva
Project Manager
Svitlana is a ex Project Manager at Qubit Labs with legal education and PhD degree in political science. She has experience in managing in-house and offshore/nearshore software development teams including freelancers. She is sure that smooth communication and motivation is the basis of efficient teamwork and successful projects. Svitlana is passionate about networking, achieving great results and acquiring new knowledge.