How to Extend Your Software Development Team Effectively

08 October 2021 • 13 min read

Andrii Horiachko

Co-Founder at Softermii

Software development team extension is not without reason an important milestone in the IT industry.

The IT market is now growing rapidly, even faster than before the pandemic. According to Statista, in 2021, the global IT industry has been valued at approximately $5 trillion. In the future, growth in this market is expected to continue through 2024 at a five percent compound annual growth rate (CAGR).

Therefore, IT companies should look for ways in which they can compete. To do this, software vendors consider expanding their staff as one of the most rational options for increasing their business. This choice is further facilitated by increasing the supply of specialists in the market.

The global developer population is expected to reach 28.7 million people by 2024, increasing 3.2 million from the number seen in 2020. The trend of increasing the number of IT specialists will continue in the coming years. Therefore, you have a wide selection of professionals in different specializations.

According to Statista

We will look at the key reasons and ways to extend your software development team. This overview will help you choose the best option that meets your current needs and goals.

6 reasons to extend a software development team

Every company sooner or later faces the need to increase their software engineering team. Many factors can cause this demand.

So, first, you need to identify them and then move on to options for software team extension. Keep in mind that several options can approach each cause at once. It all depends on your approach to work and how you see the development of your firm.

Some ways to increase a team can have an immediate effect, but they will only be really useful in the short term. Other ways will not bring results immediately, but they will provide you with successful financial results for many years, and you will have full control over the situation.

Let's look at the common reasons why companies seek to expand their team of software development experts.

Delegation of small projects to focus on larger ones

This situation can happen when the firm has a small team that has long been able to work on projects of various sizes. However, there are more and more customers, and you have started to notice that you can divide these projects into large, medium, and small.

Perhaps, your development team is physically barely able to cope with all the work tasks. It affects the mood and motivation of your professionals. At the same time, you are satisfied with the quality and speed of their work, but you want everyone to be comfortable working and not burn out.

That's why you decide to leave big projects to your current software engineers. And you pass all medium and small to new specialists. This approach can positively affect the working atmosphere in the team.

Fast time to market

It could be the next reason for development team extension. You may have a situation where your potential or existing customer wants to develop and launch a product on the market in a fairly short time.

You want to take on this project, but you understand that you will not have enough professionals in the team to complete the project on time. Therefore, you choose one of the options for rapid team expansion and start working.

High-quality specialists with lower costs

You want to increase the number of projects for your company through rapid software development team expansion. However, you do not currently have the opportunity to hire new employees with the same high salary, but you want them to be high-quality professionals.

What to do in this case? You need to explore the global market for IT developers, as there are regions with first-class professionals who charge many times less for their work than in your job market.

Competitive advantage

Things can be as good as possible for your firm. Your specialists are satisfied with working conditions and are highly motivated. However, you begin to notice that it would be nice for you to increase your team, gain an additional competitive advantage in the market, and attract new customers.

For starters, you can create a base of potential new employees who are ready to join the work at the first need. At the same time, they work on a project basis, not on an hourly basis. It can help if you realize that you will need to increase the team shortly and you are not ready to spend time recruiting.

And when you find a new customer, you recruit new professionals. For starters, these can be small projects. However, if you immediately want to undertake additional large-scale development, you may need a direct additional dedicated team, which can be hired from another IT company.

If you want to gain a competitive advantage for the long term, then in-house hiring will suit you to set up your extended software development team.

Professionals with new knowledge

The structure of your team consists of specialists who successfully implement projects of various scales. However, the IT market is evolving and changing rapidly. Every year, new technologies appear that need to be mastered and implemented.

Perhaps, your firm won't take on some new projects since it requires expertise that your employees do not have. But you would like to get these projects. Therefore, you need to quickly find a professional with specific knowledge who also has the appropriate portfolio.

You can find a developer with the right skills as a freelancer or among particular companies. However, you would like to have such professionals in your internal team. Therefore, you can simultaneously look for a new employee in the market with your recruiters. And on the next project, you can have a full team that meets the requirements of the IT market.

Research and improvement

You want your company to be one step ahead of the competition. So you understand that you need to spend more time researching the market, following its trends and new technologies. Moreover, you feel that you could improve your services.

So, you are expanding your staff with new specialists who will deal with the above tasks. In essence, this step can be seen as an investment in your long-term success in the IT market.

Your company may face other reasons. We have considered here the typical ones that occur in most cases. So if you have any seventh reason to expand the team, then do not worry. All is well, and it also has its solution.

Four ways to extend a software development team

Now let's move directly to the proven ways to solve your team expansion issues. Based on our experience and knowledge, we identify the following trend options for staff increase:

Outstaffing agencies
In-house hiring
Hiring freelance developers
Outsourcing agencies

Each of these methods has its characteristics, and accordingly, the pros and cons. They are all viable, but you need to be able to use them properly.

Let's dive into the typical ways to expand the software engineering team. Treat it as a small guide that you can always look at to choose the perfect solution with the maximum benefit for your company.

Outstaffing agencies

Extending the software development team by outstaffing is the first and perhaps the most popular option.

It's quite convenient for your firm if you urgently need an additional high-quality developer. At the same time, you do not worry about payments to the new employee as the outstaffing company is engaged in all of it. You are only responsible for the timely payment of services to this firm.

You also need to carefully check the information about the outstaffing company and understand whether its representatives perform their duties to their employees. It will help you avoid possible reputational risks. Now let's analyze in more detail the advantages and disadvantages of this method of team expansion.

Pros of outstaffing

Minimal time to find and attract a new high-quality developer to your projects
Opportunity to work with a new employee both hourly and on a project basis
The developer officially works in an outstaffing company. You do not worry about its registration, social package, and payment
You do not need to allocate a workplace and equipment for a new specialist.
The employee integrates into your team like all members of your team. You can add it to all your project chats and monitor its operation
Opportunity to attract an experienced developer from another region of the world with a lower level of payment
You can easily stop working with a new developer

Cons of outstaffing

A new professional is less motivated to work with your projects because they are not officially an employee of your company. He is an athlete on loan but without the opportunity to become a full member of the team
A developer may not share your company's values because he will not build his career with you
The employee may be in a different time zone and not know your local language.
A new specialist always works remotely, and you will never be able to see them live
There is a risk of confidentiality breach because an outstaffed developer may work on their equipment
You need to carefully check the information about the outstaffing company to avoid it

Typical reasons to choose are #1- #6.

In-house hiring

This one is a classic way to expand your software development team. It is useful if you work only with employees you can fully control and motivate. You like that you can grow your professionals from scratch by snatching young talent from the IT market.

Such people are committed to their work and your company. And you can clearly understand where your firm is heading, and you have no illusions about the number of your specialists. If you plan to extend the in-house development team, you need to consider the features of this approach.

Pros of in-house hiring

control the number of projects that a new employee is involved in
No language or time zone issues
Your specialist shares the values of your company and sees his career development here
Saving firm data through the use of corporate equipment and systems by team members
High motivation in current and new colleagues who have the best interaction compared to all other expansion options
Each of your employees is a promoter of your company and is interested in its prosperity

Cons of in-house hiring

Costs of recruiting and training developers
The long process of finding the perfect new professional. Many different interviews and tests
Difficulties with dismissal
High expectations regarding salary and social package

Typical reasons to choose are # 4- # 6.

Hiring freelance developers

Here's a fairly popular option for staff increase, from which many IT professionals can start their careers. And some even consider only this format of cooperation with other firms because such a model allows them to choose projects independently.

This format of cooperation may be useful for IT companies if they need flexibility in choosing specialists for narrow-profile projects. And it's easier to quickly hire a freelancer with the right set of knowledge than to look for a specialist in the team.

When choosing a specialist, study their portfolio, technology stack, and feedback from his clients. It will save you a lot of time and help you pick the best candidate.

Here are three popular services where you can find IT freelancers:

Upwork. Here you can see the profiles of freelancers: experience, skills, portfolio, job histories. You can post a project with requirements on your page, to which freelancers can respond with their proposals. On this platform you can find specialists for projects of various scales: from small to large.
LinkedIn. It’s a Facebook-like social network for finding professionals. Here you can also see CVs and portfolios of people who can either look for a job now or just have a profile. People can indicate on their pages what they are looking for. However, there are both freelancers and full-time employees on this platform.

Toptal. It’s an exclusive network of the top freelance software developers, designers, finance experts, product managers, and project managers in the world. Toptal has rather specific process of freelancers’ selection which helps to find only the most skilled professionals in their field.

Pros of hiring freelancers

Payment hourly or per project
Access to high-quality developers from around the world, which may or may not be in your country
Savings on payment and infrastructure
No need for training

Cons of hiring freelancers

High threat of leak of data
Low control. A freelancer can work with your project and several others at the same time.
Lack of motivation and risk of abandoning the project
Possible language problems and differences in working hours

Typical reasons to choose are #4 - #6.

Outsourcing agencies

Your company may receive a project that your team may not have time to complete due to other tasks or the lack of the necessary narrow-profile expertise. Therefore, one of the options may be to involve an extended software development team as a service from an outsourcing agency. This firm can be located in a region with first-class developers and lower remuneration. In this case, the outsourcing agency can independently develop the product you need, and you only need to provide it with the requirements.

When choosing an outsourcing company, you should check whether it carries out its projects. Also, find out about its experience in the areas you need. And it is worth inquiring about customer feedback and portfolio. You can have several extended software teams within one or more outsourcing agencies.

We have gathered for you useful resources for choosing an outsourcing agency:

Clutch is a reliable platform where you can find an outsourcing agency. Projects and reviews are visible here
Trustpilot and Glassdoor are for checking reviews
Goodfirms is for viewing the rating of firms.

Pros of outsourcing agencies

The outsourcing agency manages its offshore team and worries about the result
Getting quality projects on time
Reduce development costs
No need for infrastructure and dedicated team training
High-quality specialists work on your projects

Cons of outsourcing agencies

Low level of communication with developers due to the difference in time zones and team management models
Outsourcing agencies show you only the intermediate results of your project

Typical reasons to choose are # 1 - # 6.

Bonus tips on software development team extension

We have also prepared for you some more useful tips on how to augment your software development team. They can also be useful to you.

Offshore dedicated center

You can run a successful IT firm in North America or Western Europe. However, you may want to increase your market share and at the same time save on wages. And you may want new employees to be officially part of your highly motivated company. Therefore, you can set up a dedicated offshore center (ODC), an office branch in a country with high-quality IT professionals, for a reasonable price.

Moreover, a reliable level of data security in ODC can be achieved using VPNs on your employees' computers. At the same time, such specialists have the same knowledge and experience as developers in advanced countries.

You need to realize that you are forming your team in another region. And you need to take into account cultural and temporal differences, legal nuances, and tracking performance.

Optimizing in-house structure

We recommend that you periodically perform a detailed analysis of your firm and development team to optimize workflows. What is it for? For example, you notice that your company's resources are not being used in the best way, and the team's number of tasks and people have not changed. However, there is a need for additional staff.

This approach will help you understand the reasons for the slowdown of the team, and you will quickly find a solution. Moreover, there may be no need for urgent staff expansion.

As you can see, this team extension model does not have any of the previously mentioned typical reasons.

Extend a software development team with Softermii

Extending a software development team in today's reality is an important step for most IT companies. It can improve financial results quickly, increase the number of clients, take projects in new directions and gain more market share.

Despite these benefits of a software development teamm extension, you should carefully consider which method is better to increase the number of professionals. Your decision should be based on the specific reasons we have considered, your goals, and your vision for business development.

If you want to save money and get a turnkey project without your intervention, we can help you. Softermii has solid experience in various fields as an outsourcing company.

We have such high-quality specialists as Full-Stack Engineers, UI/UX Designers, Project Managers, Business Analysts, QA Engineers, etc. We make sure that our professionals use the latest technologies.

Contact our team, and we will help you implement your projects on time and at a good price.

Frequently Asked Questions

What are the best extended team models?

Several extended team models have proven successful, depending on the needs and goals of the organization. Some of the best-extended team models include:

Dedicated Team Model: In this model, an organization hires a dedicated team of professionals from a third-party vendor who works exclusively on the organization's projects. This model offers high flexibility and control as the team becomes an extension of the in-house team.
Managed Team Model: In this model, the outsourcing company provides a fully managed team of professionals who work under the guidance and supervision of the outsourcing company's project manager. This model is suitable for organizations that require minimal involvement in managing and monitoring the extended team.
Hybrid Team Model: This model combines the elements of both dedicated and managed team models. In a hybrid team, a part of the team works on-site or in-house. In contrast, the remaining team members work remotely or at the outsourcing company's premises. This model offers a balance between direct control and flexibility.

What extended IT teams are able to achieve success?

Extended IT teams can achieve success by focusing on the following:

Clear communication and collaboration: Establish open communication lines and maintain regular contact with all team members, regardless of their location.
Defining goals and objectives: A clear understanding of the project requirements, goals, and objectives ensures that the extended IT team is aligned with the organization's expectations.
Technical expertise: Ensuring that the extended IT team has the necessary skills, expertise, and resources to deliver high-quality results.
Agile methodologies: Adopting agile methodologies enables extended IT teams to adapt to changes quickly and deliver projects more efficiently.
Cultural compatibility: Ensuring that the extended IT team shares similar values and work ethics to create a harmonious and productive working environment.

Do outsourcing companies provide a team extension?

Yes, outsourcing companies often provide a team extension service as part of their offerings. It involves providing skilled professionals who work as an extension of the client's in-house team, either remotely or on-site. Outsourcing companies can provide team extensions for various functions, including software development, project management, and quality assurance.

How to set up an extended software development team?

Setting up an extended software development team involves the following steps:

Define your objectives: Clearly outline the goals, objectives, and requirements of the project, along with the desired skill sets and expertise required.
Choose the right team model: Based on your requirements, choose the most suitable extended team model, such as dedicated, managed, or hybrid.
Select a reliable outsourcing partner: Research and evaluate potential outsourcing companies based on their reputation, expertise, and past performance. Choose a partner that aligns with your organization's values and requirements.
Assemble the team: Work with your outsourcing partner to assemble a team of skilled professionals with the required expertise who will work as an extension of your in-house team.
Establish communication channels: Set up clear communication channels, including regular meetings and progress updates, to ensure seamless collaboration between the extended and in-house teams.
Monitor and manage the team: Regularly monitor the performance and progress of the extended software development team, and provide feedback and guidance as needed to ensure project success.

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