Engineering leaders may often hear the idea of hiring a nearshore team, and think about this option. However, not many people have actually done it first hand. If you google “hiring nearshore team”, most articles are written by the nearshore companies, rather than the actual engineering leaders who did it.
In this article, I shared my experience of hiring a nearshore team at Trace Data as VP of Engineering. Hope it can demystify this choice and help other leaders consider this option confidently as reference.
Why hire a nearshore team?
The motivation for us was
Speed up the hiring process.
We did very well on hiring backend engineers, but not so well on frontend engineers. The Bay area is very competitive. And we urgently needed engineers to start the first round of product development in Q4 2019.
Cost saving is also very good to have
Although this is not the main motive, cost saving is an important factor. We were a seed stage company with limited budget. If we could build a great team with less cash, it helps.
Flexibility
Our product development needs may jump or decrease. Hiring a nearshort team could give us flexibility to scale up or down the team quickly, within 2 weeks.
Initial Concerns
I never hired a nearshore team before. Trace Data as a company was only two months old. And I joined the company less than one month ago. A wrong decision can severely impact this young startup. Two possible failure scenarios: a) hire a nearshore team but it comes out as a failure b) do not use a nearshore team and cannot hire front end engineers fast enough in the US. As a result, we had to delay the development by a quarter or longer.
I hope the context is helpful. Often the challenge of being a leader is to make decisions under pressure and high risks. Without the context, it is hard to see the gravity of such decisions.
Before going ahead to hire a nearshore team, I had a list to consider:
- Where to find these nearshore companies?
- Which country to look at?
- Which time zones are okay?
- How good are those nearshore engineers?
- Is English communication a barrier?
- Culture fit?
- How important is the cost difference to our final decision?
- How soon can the nearshore engineers start?
- Can they truly scale up and down a team quickly as said on paper?
- How to compare the companies?
- What is our evaluation/hiring process?
- How to handle if things go wrong?
The Hiring Process
Where to start?
Fortunately, our CEO of Trace Data had a friend who has done this before. I listed the skill requirements such as React, TypeScript, ML and UX, and he went out and collected proposals including skill match and cost from 12 nearshore companies. From there, we short listed it to 4 companies.
I made the decision by three factors
- Skill set is strong for frontend. We can afford to hire other types of engineers later.
- Time zone is in North America. Ideally close to pacific time.
- Strong and convincing customer testimonials listed on their websites.
First Interview
We met with the 4 companies on zoom. Here were the takeaways.
- Company A: Argentina based, 5 hours of time difference, came well prepared, professional presentation with business/team overview and customer use cases. They have two engineers on the call and said both could start immediately. They also have UX, ML engineers based in Europe.
- Company B: More established than company A. Also Argentina based. Strong presentation. Can have engineers to start in 2 weeks.
- Company C: Mexico and Columbus based. Better for the time zone. No presentation. Just a video call. They do not manage the nearshore engineers. Clients will manage directly. Essentially they are just a recruiting firm. Said that hiring will take 8 weeks.
- Company D: Similar to Company A. Had only front end engineers.
I shortlisted to company A and B after this round.
Second Interview
In this round, we interviewed 2 engineers each from Company A and B directly, asking questions of coding, design, React, TypeScript, etc. I also interviewed for culture fit. Both came out very good.
Decision
Both are very good companies. Either could work out well. Cost was similar.
I decided to pick company A for the following reasons:
- Two engineers were ready to start immediately
- Seemed to have a stronger startup culture fit.
- More passionate to gain our business
Negotiation
Nothing too special. But worth noting that we changed quite a bit in the contract regarding the time constraints. Company A was nice to work with and we quickly reached the deal.
How did it go?
Overall it was a big success
It has been more than 15 months. I considered it a big success of hiring this nearshore team for the following reasons.
- The engineers are very productive. Comparable to Bay area engineers at senior level.
- They are well rounded experienced engineers, fast coders, care about code and product quality, and know how to develop with right balances.
- They work well with UX, product and other engineers.
- They adapt to our engineering culture nicely.
- Communication is never an issue.
- Timezone is not an issue. We have a good time overlap between 9am-2pm PT.
What did we do right?
Treat the nearshore team the same as internal team
- Transparency in everything including business progress, customer engagement and even financial info. Thanks to our CEO, James, to encourage this practice.
- Same team meeting.
- 1:1 with each engineer. Timely feedback and care about their opinions and career growth.
Be aware of some gaps and fill them patiently
- The engineers are at senior engineer level for tech skills. But they may lack the experience of leading a project, tracking progress for a squad, estimating the dev cost and being a bit shy or quiet than opinionated when working with product, UX and engineer peers. They are capable of doing it but often have not been given such opportunities probably due to the contracting nature. On this front, all nearshore engineers in my team have grown tremendously in the past year. The gap is almost not noticeable now.
- Can be more proactive. Understandable as they are not full time employees and it is hard to expect strong ownership. There is still some room to improve.
Mistakes?
Sometimes the existing nearshore engineers are so good, it created an illusion that every engineer that the nearshore company suggests is that good too. In reality, it is not.
Two learnings
- Do not fully trust the engineer title given by the nearshore company. Two engineers from the same nearshore company with the same “senior engineer” title, may have quite different levels within that company.
- Interview consistently and thoroughly for each engineer before she/he joins the team.
Conclusion
Looking back, I believe we made a very good decision to hire a nearshore team at Trace Data. I have referred this company to another startup founder in the Bay Area, and he made hires too.
Hope this article is helpful to give a peek into this decision and process. Love to hear your experience and thoughts!
