How a Dedicated Team Mitigates IT Operational Challenges
- Challenge #1. Headhunting & Recruitment
- How can you accelerate your headhunting and recruiting processes with a dedicated team?
- Challenge #2. Human Resources Management
- How can you benefit from hiring an offshore software development dedicated team?
- Challenge #3. Legal Issues
- How can dedicated team services protect your company from IT legal and security issues?
- Challenge #4. Taxes & Finances Accounting
- How can you reduce IT employee expenses with an offshore dedicated team?
- Bottom line
Software developers hiring and employment coverage are becoming one of the most challenging tasks. In 2022, technological companies deal with an acute shortage of experienced IT specialists. Here are some key findings:
- 47% of recruiters say that qualified IT specialists searching is the number one challenge for them (Tech Hiring Survey from CodinGame Report).
- 63% of companies say that the global technical talent shortage is one of the top emerging risks (Emerging Risks Survey from Gather).
- 49% of CIOs say that growing and competing are challenging due to the lack of local IT talents (the CIO internet source).
- The process of software developers recruiting for an open position takes 66 days on average (iCIMS).
Do you familiar with the lack of software development expertise while scaling up your projects? Keep reading this article to learn more about what IT talent hiring and maintaining challenges lay ahead for your company. Explore Coreteka’s dedicated team services to overcome these issues.
#1. Headhunting & Recruitment
Headhunting and recruiting are the most complicated and time-consuming processes in the tech industry. The market is rapidly moving forward which means the emergence of new, distinctive skills developers can’t master in one night. Thus, companies strive to literally compete for talented specialists.
Dealing with a talents shortage
High demand generates supply. Nonetheless, companies are acutely aware of skilled candidates with strong IT backgrounds in 2022. The CompTIA American Computing Technology Association analyzed the federal employment data. It found that in 2022 alone the number of current technical vacancies grew by 55% compared to the previous year. At the same time, the Reveal Top Software Development Challenges for 2022 report shows that 53% of companies consider right-skilled developers recruiting as the main challenge.
Offering competitive wages
Pro-skilled software engineers are worth their weight in gold. It is essential that this labor can’t be cheap. According to Indeed data, the average annual software engineer salary amounts to 94,077$, or 40,40$ per hour. Additionally, a technical employee can get 5,000$ in cash bonuses and multiple non-cash benefits. Software engineer salaries can also vary depending on the state. For example, the average wage levels for developers in California are 22% higher than nationwide, 12%—in New York, and 4%—in Washington.
Companies frequently need to revise their wage policy to meet software developer salary expectations. This includes not only monthly payments but also extra expenses, e.g., gym memberships and team-building. Talented IT specialists always choose employers considering optimal collaboration conditions that your company should comply with.
Short vacancy closing deadlines
Teamwork is behind every successful IT project. In some cases, the lack of one experienced developer can cost a company project derailing. That’s why recruiters should close open positions one time. Nonetheless, it’s a time-consuming process. One pro-skilled software engineer frequently has several offers on hand, so they can choose the best conditions for themselves.
How can you accelerate your headhunting and recruiting processes with a dedicated team?
It’s crucial for enterprises to expand their recruiting staff and work out hiring strategies, offering high salaries and extra perks. However, if your company is constrained by resources, it’s better to consider offshore software development services.
Central Europe is one of the most reliable destinations to delegate your IT tasks. You can get talented technical specialists, high-quality code, and affordable prices.
Recently, Coreteka opened a new R&D center in the Poland city of Wroclaw. We also maintain an office in Kyiv which is equipped with portable electric generators to ensure stable operations, and Starlinks to keep a smooth internet connection. Some part of our Ukrainian team is also located in Western Ukraine.
According to Glassdoor, a monthly developer’s average salary in Kyiv is 3,000$, which is 36,000$ per year. This is 3,5 times less than a salary for the same position in the USA. As to Poland, DOU shows that average tech salaries here are 3,301$ which is 39,612$ per year.
Сoreteka can accelerate recruiting processes and strengthen your company with a dedicated offshore software development team, offering affordable prices. How do we do this?
- Our in-house recruiters have over 5 years of experience in hiring IT talents and extensive networking.
- We have access to the market of Ukrainian and Poland specialists.
- It takes 30 days on average for closing technical positions for our recruiters.
Send us the list of necessary vacancies and we will find the right candidates in a short time.
#2. Human Resources Management
It’s not enough just to hire a good specialist in the IT environment. You need also to be able to retain them. World-class technological companies carefully invest in human resource management featuring accurate on/offboarding processes, staff retention, and extra perks.
Bringing a new employee to a team requires gradual and friendly adaptation instead of headlong diving into a project. Generally, onboarding includes an HR manager and team lead engagement. They should support a newcomer throughout all technological processes.
However, developers hiring is expensive. According to various estimates, losing an employee within 12 months will cost a company expenses equal to his salary + 30% of the wage for promoting an open position. It’s just about direct spending, which doesn’t include time spent on hiring and onboarding, training costs, and administrative losses on contract termination. Moreover, your team can be demotivated due to delegating excess duties.
Hiring and onboarding are only half the battle. You need to make sure your employees feel comfortable and engaged in the working process to retain talented specialists. It takes a lot of financial and time resources. Staff retention can include arranging training programs, comprehensive support, performance review, and high-quality feedback. Keep in mind that it’s much easier to maintain your employees than to hire a new one.
Delivering compensation packages
In the IT domain, a typical compensation package includes more than just a basic salary or an hourly wage. Candidates frequently compare extra perks in multiple companies to choose the best option. That’s why you should take of making your compensation packages competitive.
Generally, a compensation package includes
- Rewards. They can include any extra payments like signing, relocation, holiday, referral, and performance commissions.
- Insurance coverage. In 2022, the average health insurance cost in the USA is about 550$. It can be a big expense for some people. That’s why reliable companies strive to cover their employees’ insurance costs. You can also include life, and disability insurance; medical and parental leaves in your compensation package to engage employees for collaboration.
- Unlimited day-offs. In recent years, technological companies more frequently add unlimited day-offs to their compensation packages. They can improve mental state and protect your employees from burnout, accelerating high productivity.
- Additional corporate perks. You should consider offering your employees extra fun, including unlimited snacks and drinks, access to a game or gym room, children’s care services, or parking vouchers.
How can you benefit from hiring an offshore software development dedicated team?
Undoubtedly, you can stake in HR manager staff expansion or deeply invest in corporate culture. However, it requires a lot of your financial and physical sources to create competitive cooperation terms for software engineers.
Hiring an offshore software development team is a more cost-effective way to manage your crew from the humane resource management point of view. Coreteka can provide your company with talented developers on a contractor basis. We entirely cover hassles related to HR management processes:
- Undertaking on/off-boarding with experienced HR managers.
- Accelerating software developer performance with training and mentoring programs, consistent feedback, and retrospectives from our side.
- Delivering ready-made extensive compensation packages. They include spacious offices in Wroclaw and Kyiv, medical insurance coverage, fixed working hours, and additional corporate perks.
Thus, our company can delegate Coreteka all HR support and staff retention tasks and focus on delivering great results. Contact us to learn more about accelerating the development process with a dedicated off-shore team.
#3. Legal Challenges
Software development frequently carries great information leak risks. Generally, workers have access to sensitive information that must be confidential and closed to third parties. Signing an NDA (non-disclosure agreement) is the most common way to protect your company from a data breach. However, you should consider all legal aspects when outlining the contract.
Handling IT security issues
A non-disclosure agreement does not always guarantee your sensitive information is secured. For example, your employees can unconsciously break your commercial secrets when discussing working moments.
You should also consider the technical aspects of your IT security:
- Identify who has access to confidential information. It allows you to determine weaknesses in your IT security infrastructure. The common approach is to restrict access to sensitive data for all crew, including software developers.
- Install controlling software. You need to understand what employees use, change, complement, transmit, and view your sensitive information. This way, you will be able to control the situation in case of data leaks.
- Evaluate workspace for communications. Creating a corporate task management system is a great way to protect your data. This allows transmitting confidential information in a closed environment and the collection of cases about possible violations.
- Set up secure access to passwords. You can use multiple password security technologies like cryptography, folder access passwords, and personal keys for corporate system login.
How can dedicated team services protect your company from IT legal and security issues?
Your company can consider hiring experienced IT legal consultants and developing reliable IT security infrastructure. However, it requires expertise in many nuances while establishing transparent processes is a matter of time.
Coreteka can provide your company with ready-made security infrastructure and IT legal support. As a part of offshore software development services, we offer:
- Drawing up a non-disclosure agreement based on IT legal aspects with experienced consultants from our side.
- Providing visible information about confidential information access and accurate monitoring.
- Establishing secure password access for software developers.
- Setting up secure software and hardware environment.
- Sysadmin support.
#4. Taxes & Finances Accounting
You need to take care of financial accounting and taxation in federal, state, and local governments when hiring employees.
High local taxes for in-house developers
Although the American tax system is progressive, there are large income taxes for information technology domain specialists. Employers need to pay several types of taxes in the USA:
- Federal Income Tax. In 2022, it ranges from 10% to 37% depending on an employee’s annual salary.
- Social Security Tax. It amounts to 12,4% which is paid by companies and employees in half.
- Medicare Tax. It amounts to 2,9% and is also halved paid.
- State Tax. It is also progressive. The tax range depends on a specific state and varies from 4% to 9%.
- Local Tax. It can be imposed by regional municipalities.
For example, when a software developer is single, works in California, and gets an average annual salary of 127,484 dollars, then a total effective tax rate will amount to 31,19% (39,757$ from annual salary).
Expensive accounting and financial services cost
Tax accounting and audits can be sophisticated and time-consuming. That’s why you might need the assistance of a professional accountant who will handle operational hassles. According to Indeed statistics, the average base accountant salary in the USA is 53,715$ per year. In some cases, you might also require specialized software to ease estimating and tax-paying processes.
How can you reduce IT employee expenses with an offshore dedicated team?
In Ukraine, there is a simple tax system. The tax rate on individual incomes is static amounting to 18%. However, most Ukrainian software developers conduct their activities as individual entrepreneurs. Generally, they have a 5% of income rate and pay 22% of the minimum wage quarterly. As the average salary of Ukrainian developers is lower than in the USA, the tax burden is a lightener.
When requesting an offshore team, Coreteka provides full-cycle financial and accounting services covered by our in-house departments:
- Moderating tax burden.
- Handling financial documents.
- Reporting to local tax authorities.
- Payroll management.
- Payments distribution.
- Accounting support.
- Documents exchange.
IT expenses comparison between the USA and Poland
Explore how much you can save on hiring software developers from Poland in comparison to the USA:
|USA, Seattle, WA||Poland, Wroclaw|
|Average developer’s salary (annual)||$105,964¹||$43,080²|
|Taxes (for one developer)||$24,547³||$15,482⁴|
|Health insurance (for one developer)||$5,316⁵||$1,620⁶|
|Office space rental (1,000 sq.f./yr)||$44,160⁷||$16,182⁸|
|Legal assistance (one employee’s annual salary)||$57,825¹||$8,054⁹|
|Financial assistance (one employee’s annual salary)||$60,598¹||$35,917⁹|
Sources: ¹Indeed, ²DOU, ³SmartAsset, ⁴Wynagrodzenia.pl, ⁵ValuePenguin, ⁶www.nfz.gov.pl, ⁷Kidder, ⁸CBRE Poland, ⁹Glassdoor
(the information is current as of December 2022)
You can significantly decrease operational expenses for maintaining technical specialists with offshore software development services. Central Europe is a perfect destination to establish your remote development team on a contractor basis. Currently, the country ranks second in the global outsourcing development ranking. Over 285,000 IT talents with an average monthly salary of 3,000$ work on the Ukrainian market. These rates are competitive to consider remote software development teams hiring. The country also has relatively small tax rates that allow you to save on maintaining technical specialists. You may also be interested in how outstaffing services can help in achieving business goals.
Coreteka is a company with Ukrainian roots that recently opened an office in Poland. We can provide you with a dedicated team to close software development needs. We handle the hassles of finding needed candidates, their onboarding, and accelerating performance. Coreteka also assists its clients in legal, IT security, and financial aspects.
What will you get by collaborating with Coreteka?
- IT recruiting services from specialists with 5+ years of experience and extensive networking.
- Access to a vast pool of IT talents from Poland and Ukraine.
- Closing one technical position in an average of 30 days.
- Full support of your dedicated team by our HR managers, including mentorship programs, constant feedback from team leads, attractive compensation packages, and additional perks.
- The assistance of our experts in information privacy and IT security.
- Reduced tax rates and support from our trustworthy accountants.
Let’s discuss your project requirements. Contact us to estimate how Coreteka can reduce your software development expenses.