The onshore vs. offshore IT staffing debate has persisted for several years, causing some companies to ponder which business model is the most effective. To define, onshore IT staffing involves hiring professionals from the same country or region as where the company is located. Conversely, offshore IT staffing involves hiring and recruiting professionals from another country to work for the company. Both models offer benefits and challenges, especially within the tech industry. Understanding how all models work  can help you decide which option is best for your business.

Onshore IT Staffing: Benefits & Challenges

Onshore IT staffing, which is when a company hires talent from the same country as its own, is a strong option for IT staffing models. Typically, onshore employees live in closer proximity to company location and are able to work in-person onsite or in the case of remote or hybrid work, have easier accessibility for travel options to the office. Benefits of onshore staffing include:

• Fluid and timely communication and response times – companies who require a high level of collaboration and communication often hire onshore to avoid time-zone delays.
• Local presence – companies who hire onshore IT professionals typically have a better understanding of the costs, intellectual property laws, labor needs, and challenges of the local market they serve. This is especially important for tech and software development businesses because IT data and security laws are constantly evolving.
• Faster talent deployment and onboarding
• Decreased business risk – businesses that hire onshore typically have a lower level of project development and management risks because of centralized management, which allows for easier navigation of complex projects and faster project completion.
• Supports current increase in return-to-office policy updates and hybrid work environments.

Tech companies that require high levels of communication for maximum efficiency typically choose onshore IT staffing to meet their talent needs. There are, however, some challenges that apply to this model as well, including:

• Increased talent rates due to labor and living costs.
• Smaller talent pool – onshore staffing limits the talent pool geographically, although remote work that widens the radius but within close proximity can help offset that concern. Smaller IT talent pools can be challenging, especially when seeking a specialized or technical candidate with a specific skill set.

Offshore IT Staffing: Benefits & Challenges

Offshore IT staffing has become more common for tech roles especially as remote work grows. Typically, offshore employees live in a different country as the company and work remotely. Companies will choose to adopt offshore staffing practices when they want to:

• Reduced costs – hiring professionals from another country allows businesses to save money due to lower living and labor costs overseas.
• Widen their talent pool – hiring professionals from another country broadens the talent pool for businesses, which can be useful for IT roles that require candidates that are highly technical or specialized in a specific area.
• Increase globalization efforts – hiring professionals from another country allows businesses to expand globally, creating connections and opportunities to the local and regional markets of the countries that they choose.

While offshore IT staffing solutions increase, particularly in software development to meet their needs, this model presents certain challenges:

• Time zone differences create collaboration obstacles – when companies hire offshore, they introduce significant time zone differences which can make remote collaboration and communication tricky, as well as impact project deadlines and deliverables.
• Language differences and unfamiliarity with market – like time zone differences, hiring offshore introduces possible language barriers, which can also hinder communication and workflow. Plus, not having the same familiarity with a target audience geographically can impact strategic direction and product development.
• Increased business risk – hiring offshore can sometimes lead to less control over projects, tasks, and risk mitigation which can make large and robust assignments harder to navigate and longer to complete.

Follow-the-Sun Approach

In addition to both onshoring and offshore IT staffing solutions, companies also seek help with seasoned staffing experts to introduce blended staffing models as well. “Following the sun” is a term often used, especially for consumer-facing organizations, to be able to offer more hours of production and service time when there are professionals working across different time zones. Staffing a centralized IT location with onshore IT talent, augmented by IT staff that may be offshore, is sometimes an option when cost-reduction measures are in place, but local strategy and oversight is imperative.

Onshore vs. offshore IT staffing is a hot topic of conversation for businesses, especially companies who require specific tech talent for certain projects and roles. Onshore IT staffing offers companies a greater level of communication and collaboration, a stronger local presence, and less business risk, but can come at higher costs with a decreased talent pool. Offshore IT staffing offers companies opportunities to globalize and decrease costs, while also introducing time-zone, collaboration, and risk management difficulties.

Understanding the benefits and challenges of both onshore and offshore IT staffing can help you determine which approach aligns best with your business’s goals and objectives.