Dedicated development team: what it is and why you need one

Dedicated development team

If you’re not familiar with the concept of a dedicated development team, then you’re not alone. Most people don’t know what it is or why they even need it. In the last few years, however, it has become an increasingly common way for software companies to develop their products. Taking a growing piece of the $85.6 billion offshore and outsourcing market.

In this brief article, I’ll take you on an introductory tour of the model, its benefits and how to know if your company needs it or not. 

So, let’s dive in.

What is a dedicated development team? 

A dedicated development team is a long-term engagement model between a company developing software and a company which provides developers. The hiring partner builds the team and looks after the team’s HR needs. Meanwhile, the software development company manages the team’s workload as if they were an in-house team.

This model differs from outsourcing because 

  • The dedicated team works exclusively on the partner’s projects 
  • The team works on a long-term agreement rather than short-term projects
  • The hiring partner doesn’t manage the workloads of the employees

This model is less well-known than alternatives such as outsourcing and in-house development and provides a unique blend of advantages and disadvantages compared to the other options. 

Why do you need to hire a dedicated development team? 

There are many paths to building a software product, from in-house to outsourcing. However, a dedicated offshore team model provides a unique blend that is the optimal solution for most companies. That said, there are some specific problems where this model is the perfect solution including many of the top IT recruitment challenges. 

Top challenges when recruiting IT Professionals

Are you struggling to find local talent?

Whether you intend to build software products and services from scratch or grow your existing development capacity, you need the right engineers.This means proficient, reliable individuals who are specialists in their particular field. But when you’re unable to find these people locally, hiring a well-rounded software development team can turn out to be a long, drawn-out process. In fact, 54% of companies globally report talent shortages — the highest number in over a decade. The 2020 ManpowerGroup Survey showed that only 18% of countries do not report a talent shortage.

Direct cost of skills shortages in the UK

But that’s not all…

Even if you do find the right person for the job, chances are that they’re not going to stick around for long. Given the current attrition rate, it’s only a matter of weeks or months before you have to start the recruitment process all over again. The result? Your project is going to suffer a setback. You’re not going to be able to deliver software on time. Your business will suffer, and so will your profits.

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DID YOU KNOW?
The software industry has been identified as the industry with the highest talent turnover rate at 13.2%.
Source: LinkedIn

Does your existing team display insufficient tech skills?

The technology industry is one of the most dynamic industries today. As a result, the demand for skilled IT professionals is at an all-time high. To add to this, the emergence of new technologies such as Artificial Intelligence and Machine Learning has triggered a hiring surge like never before. More and more companies are now on the lookout for IT professionals who can fill new, specialist roles.

These factors explain why a study conducted by SHRM showed that 75% of HR professionals believe that there is a shortage of skills in candidates for job openings. And over 50% of the respondents even went on to say that the skills shortages have worsened or greatly worsened in their organisations in the last two years.

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As skills needs and job roles are changing faster than ever, the need for a “Skills Revolution” continues to be the defining challenge of our time. In an increasingly technology-enabled world, people are in demand.
Jonas prising
Jonas Prising,
CEO, ManpowerGroup

Let’s consider a simple example — imagine you’re building a new and innovative software product that you’re very excited about. But you’re no fool. You know you need a team of the best QA experts in the industry to make sure your product passes is the most reliable solution on the market. Unfortunately, your local development team does not have the expertise to help you. If you want to hire QA experts, you’re looking at weeks, maybe even months of recruitment efforts and a slowly, but surely, increasing workload.

Does this situation sound familiar? If the answer is yes, then you need to start thinking about supplementing your existing team. A dedicated development team of engineers who have the advanced tech skills that you need to scale your business are the perfect option. 

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Scaling at speed: Preqin case study

How we helped a fintech establish a dedicated development centre in Bangalore

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Are you overspending to stay local?

When you’re building your development team, you want nothing but the best. Your standards, therefore, call for only the most experienced software professionals, and there is no wiggle room or compromises on the proficiency level of the developers you hire.

But unfortunately, hiring dedicated developers of this calibre are likely very expensive in your area, and their rates are usually way higher than what you’ve budgeted for. And that’s exactly why IT professionals in the US, on average, earned $5,000 more in 2020 as compared to 2019.

So if you want to stay local, and work with the best, you’re going to have to pay a premium. Again, outsourcing your project to third-party vendors located in more cost-effective destinations like the Philippines may be an attractive option. But there’s always the question of sustainability. 

Attracting quality candidates is their biggest challenge

Is scaling fast a challenge?

When it comes to building software products and services, time is of the essence. With global tech companies mushrooming like never before, and innovation at an all-time high, the time to market is extremely crucial. If you don’t deliver quality software before your competitors do, you’re just not going to make the cut. Your competitors are constantly on their toes, and if you want to pull ahead in this rat-race, you need a stellar team to back you up.

However, that’s easier said than done. With the talent and skills shortages, and the sky-high prices, finding the right development team can be a long, long process. If it seems like getting the right people on board would appear to take longer than actually building the product, then you know you’ve got a problem.

Are you wearing too many hats?

What does your typical Monday morning look like? Does it involve you juggling between recruitment, payroll, and administrative tasks? Well, that would make perfect sense if you’re the head of recruitment or even an admin.

But what if you’re the CTO and rather than working with your development team you’re faced with administrative duties? You’re diverting valuable time and energy that would be better spent on other productive endeavours. And these issues could very well be taken care of by someone else with more skill and training. But there isn’t someone else, is there? 

If the answer to all or most of the above questions is a yes, then clearly, hiring only local talent is not working for your business. You need a well-rounded dedicated team, and the best way to build one is by going offshore!

Why offshore?

For starters, let’s talk about talent. There is immense pressure in the West to find the right talent, at the right price, with the right skill set. If you offshore to a country like India you avoid all those issues.

First, India emphasises the importance of education and training. By going offshore, you get access to highly educated, qualified, and successful software developers with the skills needed to scale your business.

Further, because of the lower cost of living in India compared to the West, your budget can travel further. The salary you would be paying a developer from India would be a lot less than for a developer who is living in the US or UK. So not only is your company getting access to exceptional talent, but through the dedicated team model it is also generating significant savings in the process.

How one company solved their hiring woes with our offshore team model

As far as scale is considered, here’s an example. One of our clients, Preqin, already had an existing local development team in London before they reached out to us. However, they needed to scale their team quickly, and they weren’t able to do it locally. 

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Build an offshore development team

Can’t find the skills you need at home? Stop searching and start scaling

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The scarce talent pool, the sky-high prices, and a time-consuming recruitment process meant that they needed to look elsewhere — offshore. By building a dedicated development team in India, they were able to build their dream team and scale it to over 180+ engineers in just 24 months!

KEY TAKEAWAYS
1.
If you’re struggling to find local talent without paying an absolute premium, maybe it’s time to look elsewhere.
2.
While outsourcing may seem like a cost-effective option, it's only a temporary solution and isn’t sustainable in the long run.
3.
Building a dedicated development team in emerging tech nations like India can be very lucrative for your business — you get access to a massive untapped talent pool and significantly reduce your operational costs.

So if you want to know how you can build your dedicated development team in India, feel free to reach out to us by filling out the contact form. One of our senior executives will get back to you shortly.