16.04.2019 Formation, Lifehacks

Nearshoring IT Skills Is More than Cost Reduction

Startups often face difficulties in recruiting IT professionals as they cannot offer the same benefits that international enterprises with millions in their HR budget do. Nearshoring software development and programming to countries with higher availability of skilled workforce is an increasingly popular option to fill open positions in information technology. What needs to be considered when outsourcing IT skills to Eastern Europe?

Despite countless efforts to promote studies in computer science and IT and many companies offering on-the-job training or paid internships for lateral recruits, HR specialists, recruiters and market observers commonly agree that the war for talent in the IT industry will not be over within the next years. In many Western countries, enterprises like Google, IBM or Facebook absorb a large share of developers and programmers which makes it even more difficult for emerging Startups to recruit skilled IT workforce.

As growing Startups are often in need of a well-educated, trained and dedicated workforce and tend to face difficulties hiring IT professionals, F10 invited the Switzerland-based business outsourcing company Virtido to talk about IT nearshoring with the FinTech, RegTech and InsurTech entrepreneurs in the fourth batch of our P2 “Prototype to Product” program. Virtido operates a nearshoring centre in the Ukraine and brings Swiss companies together with IT talents in Eastern Europe. “The main reason for IT nearshoring is the availability and not cost savings”, the Virtido experts explain during their presentation at F10. 35’000 IT students graduate every year in the Ukraine, and both university graduates, as well as more experienced professionals, are usually available for new projects within six to eight weeks.

The Virtido team had to reject customers in the past because these companies were looking for developers to “do the shitty jobs that no Swiss specialist is willing to do”. The outsourcing experts emphasize that the nearshoring team should be treated in the same way as professionals in Switzerland would be. Companies just wanting to reduce costs and not appreciating the IT talents working for them up to four flight hours away from the firm’s headquarter may end up paying more due to misunderstandings, lack of communication skills or unfitting company culture.

The following factors should, therefore, be considered when opting for IT nearshoring:

  • cultural fit between company and IT team
  • language skills
  • company culture and compatibility with the IT professionals
  • reachability of the place where the IT team is located: closeness to airport, availability of good flight connections from the company headquarter
  • guarantee of fairness towards the nearshoring team in terms of payment as well as treatment

F10 guides and supports Startups with innovative ideas in FinTech, RegTech and InsurTech on their journey to successful companies. The session on nearshoring formed part of Masterclass 4 for the Startups in the fourth batch of our P2 “Prototype to Product” program.

We are currently scouting the best FinTech, RegTech and InsurTech Startups for the next batch of this six-month Accelerator Program. Learn more about the P2 “Prototype to Product” program.

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