Choosing an offshore IT location

When choosing and offshore IT location it is important to take into consideration the following

Cultural Affinity

One of the most important factors in my opinion is can the people say “no” and will they raise issues, e.g. “it can’t be done that way” or “we can’t do it by then” or “if we do it that way it will have the following consequences”.

Do they have similar tastes in humour, films, music, sports, etc. It’s surprising how much of your language and culture is picked up from these.

Language

Are sufficient resources available who are competent with your language.

At what age do their schools teach your language.

Are university courses taught in your language.

Availability of talent

Are there sufficient resources with the level of experience you are looking for and what is feeding the talent pool, e.g. universities, colleges, etc.

Staff churn rate

What percentage of staff are likely to leave each year.

Employment model

Are staff employed as contractors or permanent members of staff. It is common in some countries, e.g. Ukraine, Serbia, etc., that staff are employed as contractors to reduce the cost of employment. If the governments crack down on this practice in the future you could be looking at a significant cost increase.

Cost of staff

Have you factored in all employment costs, e.g. recruitment, gross salaries, office, social packages, social events, insurance, legal costs, payroll, accountants, etc.

Is the government giving special tax breaks that could be taken away.

See Employment model.

Cost of travel

Have you factored in costs of, flights, hotels, taxis, trains, food, insurance, visas, etc. These can be significant especially when travelling long distances.

Getting there

Ideally you want a location that is quick (less than 3 hours away) and easy to get to as you or your staff will likely travel there fairly frequently. I would recommend a location with direct flights and a choice of airlines that fly at different times of the day. You want to avoid this type of travel experience

Ideally you want a location that has freedom of travel, e.g. visa waiver

Hygiene

When travelling to India with one of my staff he was hospitalised with some kind of severe food poisoning from a 5 star hotel. He was treated exceptionally well at a private hospital but required a week off work when he got back home. One of the worst experiences of my life was phoning his wife and telling her that her husband was in a comma like state.

Inflation

Is staff salary inflation stable. Don’t forget to factor this into your cost model.

Stability

Is the country both economically and politically stable enough.

Currency

Do you share a common currency or is the currency relatively stable. If there are large currency fluctuations it can materially affect your costs.

IPR (Intellectual Property Rights)

Does the country provide sufficient IPR protection.

Time Zone

0-2 hours difference is best. It gets more challenging above 2 hours but the more autonomous the teams are the easier it is.

Do the countries implement Daylight Saving Time and do these change at the same time.

The following is a handy resource for checking times www.timeanddate.com/worldclock/

Holiday

How many personal and public (including religious) holidays and what is the level of overlap.

Laws

Does the country have a sensible legal system.

How we can help

We founded TechHuddle to help companies chose the best offshore IT location and make the process of setting up and managing offshore IT staff as simple and hassle free as possible.

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