Outsourcing for startups: How can it help you out?
If you are part of a startup that needs to grow their team with highly qualified personnel, why can outsourcing help you? And more specifically, why outsourcing to Uruguay is such a good option for you?
“After my recent business trip to DC to visit active clients and prospects, having over a dozen meetings in 3 days, I recognized a pattern of uncertainty when discussing outsourcing work to Uruguay”, says Felipe Carrera, VP of Business Development in our team.
Of course, we do not expect people to know where we are, being such a small country, although we must say, there is a gigantic opportunity people are missing by not having accurate information. In this article we will go through what makes Uruguay great to outsource to and how that is important for startup entrepreneurs that need to expand tech teams to highly qualified talent.
If you are a frequent reader of our blog, you are probably accusing us of already writing this article. Granted, we have written about outsourcing to Uruguay in this post. So why is this new post relevant? Firstly, we will focus on the point of view of startups, who have particular pains and fears when it comes to outsourcing. Secondly, our last post had a very generic point of view in terms of Uruguay’s advantages whereas in this post we will attempt to make it more personal in terms of tangible advantages from real life clients we work with internationally.
As a startup founder or operator you know how building and maintaining your own in-house IT team can be a daunting task, particularly for resource-constrained startups. In 14 years, we have seen a lot of this. If you are US based, salaries are high and you are responsible for solving everything your staff will need to be able to perform work. A few years back, before the pandemic, this was not as much of an issue. Startups would usually count with office space where the team would gather, and someone would handle administration and IT overhead to make sure that people could stay active and make progress on their tasks. However, with distributed teams this becomes a growing challenge. If you are based in DC, it might not be as easy to provide this to your distributed teams. And especially when things go bad during the worst imaginable time. Having that key person’s computer go bad a week before a big delivery when one is on the other side of the country, is far from practical.
In terms of building your team, having a limited budget can also be a challenge. You can hire and manage your team, but there is a point in which you need smaller inputs from different disciplines and hiring a full-time person for that is not cost-effective. The usual case is the need from a designer to tackle a specific task that will unblock a feature for developers to work on. And this can extend all the way to roles such as product owners, scrum masters, business analysts, QA engineers or even another developer that can handle that specific task in Python that nobody else can. The point is that as you grow your team, you will experience the need to solve things that only require a portion of a full-timer’s time. It may be a specific task, bringing in someone part-time, or even for a few months to wrap up something that is dragging behind. Counting with an outsourced team will provide this level of flexibility and allow you to scale the ways you need. It is quite common for our clients to grow their teams with little steps, adding new roles part-time and moving them to full-time when the time is right.
We do not only facilitate roles as they are available on the “bench”. We can also start a recruitment process for you and get you the perfect fit, with you as part of the selection process and having the final say on who is right for you. In any case, after working so many years with the US, we know how demanding the market is and we take that extremely seriously. Consider that in 2022 – the year in which we have grown most significantly – our candidate acceptance rate has been below 10% for many reasons. On the one hand, given that our main client is the Us, our English level demand is really high. On the other hand, technical skill is truly important for us. Last but not least, cultural alignment has a direct effect on attrition.
At the end of the year I approached our staff augmentation customers to understand how valuable certain aspects of our service were to them. When I did so, I was happy to confirm that all responses agreed that our level of service is high or very high in terms of technical capacity and ownership towards tasks assigned. Other aspects in which we have excelled include proactivity, English level provided, and our personnel’s communication with our clients.
An unexpected and happy surprise was to know how much our clients value the overhead administration that our team provides. Not only do our clients not have to worry about recruiting but they also benefit from not worrying about payroll, employee retention, bonuses, vacation coordination, tax payments in different countries, and providing benefits. This is perhaps one of the most significant aspects of outsourcing a team. Our clients can focus all of their attention on making progress on the goals at hand. With startups, this can be especially beneficial since in many cases there is now structure in place to provide all of these services to employees.
When it comes to outsourcing, there is a wide variety of options. Narrowing down by need is usually a good way to start; and to do so looking at a regional level can be helpful. A report from Cascadia Capital LLC (Nearshore Software Development Trends, n.d.) rates outsourcing based on regions and countries on 8 criteria:
- Overall visibility
- Talent quality
- Proximity and time zone alignment
- Resource availability
- Business Risk
- Government investment
Cascadia rates LATAM as top value in all criteria except for rates, where we are rated as moderate. We believe this is fair since there certainly are more affordable options when it comes to outsourcing. Some colleagues in the industry argue that although rates can be higher here than they are in other locations, it is important to consider other hidden costs involved with outsourcing such as retention – it is well known that the fact that people leave your organization has an extremely high cost to it – level of experience, cultural fit, and others, which make LATAM services comparable or even more cost-effective than those that seem low cost at first sight.
Delving into the LATAM region, Cascadia Capital LLC makes the case for the readiness of each country to provide outsourcing services to the US. Uruguay, Argentina, Colombia, and Bolivia – all 4 countries that we operate from – are rated as highly ready to outsource (Nearshore Software Development Trends, n.d.).
Outsourcing can be challenging, we completely agree. However, it can be a lot simpler with the proper level of communication and alignment between client and service provider. For instance, at Onetree, we travel often to visit our customers and meet face to face, making the relationship more human and allowing us to continually improve our work and all the services we provide upon our customers’ feedback. As an example, a recent review we got on Clutch mentioned: “…Their management showed great flexibility, and whenever we had any urgent matter, we knew we could count on them…”, said the Head of Engineering at Tada Delivery (Romero, 2023). In addition to this, another client, the Chief Product Officer at EdTech Evidence Exchange, said on their Clutch Review: “…The Onetree team definitely puts importance on communication. We interact with them constantly during the workday via Slack, phone calls, Google Meet, or Zoom. It’s like we have our own remote engineering team…” (Zinsley, 2021).
Being on top of communication when clients entrust their most important business driver is key to achieving the kind of relationship we pursue. If you are in the US and curious about outsourcing, contact us to talk. We are not pushy sales-people and love a good chat regardless of the outcome; if we are planning a trip to your location we can meet face to face and you will even get a free coffee.
Nearshore Software Development Trends. (n.d.). Cascadia Capital LLC. Recovered on March 9 2023, from http://www.cascadiacapital.com/wp-content/uploads/2023/02/Nearshore-Trends_Year-End-Report-2022.pdf
Romero, E. (2023, February 16). Review: Staff Augmentation for Beverage Delivery Platform. Clutch. Recovered on March 9, 2023, from https://clutch.co/profile/onetree
Zinsley, S. (2021, July 2). Review: Software Development for EdTech Information Platform. Clutch. Recovered on March 9, 2023, from https://clutch.co/profile/onetree/reviews