Scaling your engineering team – how to successfully leverage offshore talent

In this week’s episode of Platform Diaries, the Technology Council of Australia (TCA) recently released a roadmap that projected Australia will require one million people in tech jobs by 2025 in order to fulfill demand.

“To get 1 million people employed in tech sector jobs by 2025, we need an additional 286,000 workers to join the sector,” the report stated, labelling the biggest challenge as “acute labour shortages facing the tech sector". 

While the TCA report calls for attracting, recruiting, and reskilling Aussies and encouraging young people to enter the industry, these long-term solutions won’t be helpful for start-ups and business seeking talent immediately.

My guest on this week’s episode of Platform - software engineer, entrepreneur, and co-founder of Resync Digital, Aiden Scott - is an expert in the challenges the sector is facing. Resync Digital is currently in the process of building a bridge between the Australian and Indonesian tech markets, where there are huge amounts of talent and a great cultural overlap. 

“We've seen a couple of key things happen, especially over the COVID period. You have general inflation in the economy - as I’m sure everyone is well aware of - and then you also have what I'm calling ‘tech inflation’. Because of the shortages, and the border closures, and just a general demand around the world for tech talent, we have seen salaries especially in Australia going through the roof. This is driving up costs, especially for the smaller to mid-sized players, who can't necessarily afford to just bump everyone up $20K or $30K thirty salaries to keep them on the team,” Aidan reveals.

Aidan points out that this shortage acutely impacts small to medium-sized companies, start-ups, or businesses strapped for cash who can’t keep up with the increasingly competitive salaries.

A solution, Aidan suggests, is looking to overseas talent pools for your businesses.

“During COVID, especially in 2020, I started noticing more and more tech jobs in Australia opening opportunities for New Zealand based developers. There’s a lot of natural culture overlap, you might save between 10 to 30% on your cost because of the exchange rate, plus New Zealand is usually cheaper with the tech talent.”

Aidan believes that there were a few things driving businesses to look abroad. Firstly, during COVID, most companies went remote. If the conditions were right - a decent time zone overlap, paying the employees was not overly difficult due to tax restrictions, or language wasn’t a barrier - then there were no real reasons for businesses not to hire from wherever possible to fill vacant positions.

Despite some embracing the remote world during COVID and finding employees from international markets, there is some resistance to this new way of conducting business. Whether it be an anecdote from a failed businessperson who attempted to engage remote workers, or perhaps the idea that it is too hard to overcome logistical challenges, cultural and language barriers, or a lack of physical interaction, I have observed that plenty Australian entrepreneurs aren’t ready to dive head first into headhunting talent offshore.

Aidan thinks that this may be because these people aren’t approaching it in the most effective way.

“I think what we've seen is companies treat offshore differently to the way that they do onshore. Obviously, there are differences, and in some cases, we treat it differently, but there's a lot of places where we should treat it the same. For example, when people hire onshore, they know what the price point is for the developer they want to hire and we kind of accept that OK, if I want a good engineer at this level, here's the range I should pay. When it comes to offshore, we see people switch into a commodity mindset. Not all, but some say, ‘well I've heard we can get developers for $10 or $20 an hour, so I'm not going to pay any more than that’, and their mindset really shifts to a race to the bottom approach as opposed to knowing what the market is worth, and knowing that you're going to pay better money to get the higher quality.”

The other piece of advice that Aidan has for founders looking offshore is to ensure there is a bridge between in-house and the international team.

“English skills are increasing pretty quickly with younger generations in a lot of countries. We've seen technology and internet speeds becoming much better, and even just ten years ago with zoom quality and bandwidth, we've seen remote first is becoming a lot more common. The gap is certainly getting smaller and smaller, but there's still a gap, so having somebody that knows how to bridge that gap work with you, whether it's a CTO that you have on board, or a developer in house who knows the tech, and then you're extending that team offshore.”

Ensuring that you are looking at your offshore employees as members of your team as opposed to commodities is a great mindset to go out there with. Moreover, thinking about the person you are hiring rather than the software you want to develop will lead to greater company success.

“When you’re hiring onshore, you put a lot of care and attention into selecting the right people, building a good team culture, and building that long term relationship. When you apply those same rules and same principles offshore, you get the same results. You get long-term developers to stick with you and build this team culture. There’ll be some cultural differences, but there's more similarities than people often realise. You can still build that fun, working team culture that just fosters really good results,” Aidan says.

Another key aspect of building a successful remote workplace is ensuring that the right tools and systems are in place to allow for effective communication. Building an asynchronous work model from the outset will give companies a greater chance of succeeding with offshore team members, particularly if time zones present a barrier.

“A lot of companies thrive using a written first approach. Instead of scheduling Zoom meetings every second hour of the day and having a dozen meetings a week, having a lot of information written also gives you better transparency and better accountability.”

Are you an entrepreneur struggling to find employees? Or perhaps the fear of the talent shortage is keeping you from beginning your start-up journey. Tech expert Aidan Scott advises you to lay the foundations of an asynchronous work model for your company from the outset, approach recruitment in a similar way as to how you would onshore, and remember that it is not a race to the bottom.