The history of outsourcing dates back to the time of the Industrial Revolution, which took place in Europe between 1750 and 1900. Today, outsourcing is on the rise – the market size of outsourced services has comprised $ 85.6 billion in 2018 in comparison with $ 45.6 billion in 2000, as Statista reports.

In the 1990s, application service providers (ASPs) started allowing companies to rent software applications instead of building their own. This was close to modern software development outsourcing. According to the results of the Global outsourcing survey by Deloitte, IT still remains the most outsourced industry, as specified by 72% of survey respondents. Now outsourcing is associated mostly with remote IT jobs, so in this article, we are going to discuss the latest outsourcing trends related to the IT industry. Additionally, we will find out what tools to use when assessing the outsourced candidates before the interview and monitoring their performance after they are hired.

Outsourcing trends: #1 New Outsourcing Destinations

India and the Philippines still remain the top outsourcing destinations. However, Europe is now catching up with the Asian countries. As per the same Global outsourcing survey by Deloitte, 65% of companies who outsource do so in Europe. Eastern European countries such as Ukraine, Poland, Bulgaria, etc. offer favorable outsourcing conditions because of reasonable prices but highly skilled tech talent.

Here is some proof:

  • Poland is featured in the Top 5 of the Top Coder Statistics, next to China, Japan, the Russian Federation, and the United States.
  • In 2017, the Global Sourcing Association (GSA) named Ukraine the “Outsourcing Destination of the Year”.
  • Bulgaria is ranked at as the world’s 5th top outsourcing country.

Outsourcing trends: #2 Tech Talent Marketplaces

A tech talent marketplace is a platform that features the profiles of developers working at offshore software agencies. If the developers are currently free and waiting for a new project, an agency can share their profile to potential clients via a marketplace, thus acting as a vendor. The clients then look through the developers’ profiles at the platform, shortlist the ones that fit the project requirements, interview them, and form an offshore development team. Such marketplaces differ from freelance websites in a way that the developers are not self-employed – they work at local vendor agencies. The client can sign a contract with one or several vendors.

outsourcing trends: youteam marketplace

Outsourcing trends: #3 Several Vendors for Several Technology Stacks

If a software development project requires several technology stacks, the clients now would prefer to choose several vendors specializing in one tech stack rather than choosing a single full-stack vendor. This is because now it is more reliable – those who claim to be full-stack vendors typically deliver the work of questionable quality.

Assessing the Outsourced Developers: Which Tools to Choose

As a client, you may be lacking the necessary technical knowledge – after all, that’s why you are hiring the developers – so it may be difficult for you to assess their skills on your own. Therefore, the best way to do so is to introduce the pre-interview tests that will help you shortlist the best candidates and thus save time. You can use the following testing platforms:

  • HackerRank: A platform for crowdsourced coding contests (CodeChallenges) that you can share directly on your career page.
  • Codility: This platform is designed specifically for non-technical recruiters, making it easier for them to the source, screen, and interview the candidates.
  • Interview Zen: This software allows you to create coding interviews that are as unique and role specific as necessary.
  • CoderPad: This platform offers a live programming environment that will help you to conduct live interviews with software developers and see them code in real time.
  • Devskiller: This platform uses the RealLifeTesting methodology, meaning that the tests resemble the real-life work experience so the candidates can show their skills in action.

After you hire a remote developer, you will still have to measure their performance. Here are some best practices for you to follow:

  • Transparent communication. Communication is an integral part of company culture. It is especially important when your team is remote or distributed. In a remote setting, you do not communicate naturally and thus must organize the communication explicitly. Besides, the members of your remote team are very likely to have diverse cultural backgrounds and thus some of them may have problems reporting their mistakes or other issues. To prevent this from happening, create a communication handbook with the rules that your team members must follow with special emphasis on work-related issues that should be voiced immediately.
  • Hold regular status meetings via the video conferencing tools such as Zoom or Google Hangouts. During those meetings, have your team members show what they have done during a specific project sprint or iteration. In such a way you will be able to see how they are performing. It is also possible to make quick check-ups via messengers such as Slack, just to ensure that everything’s ok.
  • Use project management and collaboration tools, such as Jira, Trello, or Asana. These tools will allow you to get a clear picture of project backlog, see what your employees are currently working on and review their progress.

The Bottom Line

Outsourcing has been out there since the 18th century and has now evolved into the remote work trend.  The outsourcing trends for 2019 are as follows:

  • New key outsourcing destinations such as Eastern Europe.
  • Tech talent marketplaces that the clients can use to “book” the developers from offshore software agencies.
  • The clients now tend to choose multiple full-stack vendors instead of a single full-stack one because of higher reliability.

If you are already outsourcing, keep in mind that it is preferable to assess the developers before the interview by giving them the coding tasks. For this purpose, you can use specialized tools and platforms, such as HackerRank, Codility, CodePad, or Devskiller. To measure the productivity of your employees after you hire them, make sure to encourage transparent communication, hold regular status meetings, and use specialized project management tools to review the progress.

About the author

Anton Mishchenko, CEO and Co-founder at YouTeam

Anton Mishchenko is CEO and Co-founder at YouTeam, a Y Combinator-backed marketplace connecting top tech companies with the best software engineers and development shops around the world. Anton’s area of expertise includes tech entrepreneurship and digital marketing, business development in the music and media industries.

how to choose the best outsourcing company