How Much Does Outsourcing Cost?

Submitted by admin on Fri, 05/29/2020 - 20:38

Outsourcing is becoming an increasingly popular way for web agencies and other service providers to maximize the quality and scalability of the work they do. It offers small businesses the ability to attract larger clients than they would otherwise be able to by offering full-service solutions, leveraging a larger workforce than they actually employ in-house.

Although outsourcing generates very attractive cost efficiencies for large projects and work volumes, it isn’t free. You should be prepared to research outsourcing options and find ways to maximize the amount of productivity you get out of your web project outsourcing cost.

Two Options Ranked by Outsourcing Cost

There are two main methods of finding and hiring additional help on a project-by-project basis. Each one presents its own set of advantages and disadvantages. You should consider your options carefully to determine which one represents the best choice for your company – or if a hybrid choice between the two works best for you.

Importantly, these options are very different in terms of cost. You must measure the potential benefit of outsourcing with the difference in cost between each option.

1. Offshore Outsourcing cost:

The most affordable way to increase your business’ capabilities is by hiring offshore service providers for specific projects. You can expect offshore web development to cost anywhere from $20 to $60 per hour. However, you must be willing to accept the risk of miscommunicating your needs or take on the task of bridging cultural gaps to achieve the results you expect.

2. US-Based Outsourcing cost:

It’s relatively easy to find a US web agency willing to offer white label web development services. Many agencies are eager to take on these types of projects. However, you will find that US-based outsourcing is more expensive – $100 per hour is not an uncommon rate for a professional US-based web developer.

However, with this option, you can be reasonably assured that the end product will meet your standards of quality. You can be sure that you and your outsourcing partner will find common ground in your shared language and workplace culture.

Comboshore Outsourcing Cost – The Third Option

Not every agency’s profit margins are large enough to pay up to $100 per hour and still make a living. If you’re dealing with seasonal high-volume periods, then you may be content with saving your company reputation by making sure your projects get completed, letting profit take a backseat.

However, there is a third option that provides high-quality results at a fraction of the price that US-based outsourcing companies charge. This is something we call Comboshore – a combined onshore/offshore agreement that minimizes outsourcing costs while maximizing productivity.

Companies that use this strategy combine a US-based office with a remote workforce of one or more employees. Since the company’s main office is based in the United States, your main point of contact understands your goals and assures a level of quality that will meet your expectations. This point of contact becomes your project manager, responsible for overseeing the remote workforce and optimizing the quality of their work to meet your business goals.

This strategy directly addresses some of the costly obstacles to hiring a US-based outsourcing partner:

  • Rates are Low: The simplest advantage of a combo shore-style arrangement is that you pay lower rates than if you hired a US-based company with an onsite, US-based staff of developers.
  • More Experience Per Dollar: Comboshore outsourcing allows you to hire more experienced developers for rates lower than you would pay for local talent. There is no substitute for experience.
  • Round the Clock Work Hours: Instead of the time zone difference being an obstacle, it is now an advantage – the local office works the same hours you do, and your team works off-hours in another country.
  • No Language Barrier: Since you don’t personally interact with foreign developers, you don’t have to worry about your project details being lost in translation. A local project manager will take care of communication.
  • US Accountability: Perhaps the most important element is that your low-cost remote team of experienced developers is held accountable by United States performance standards and business law. This helps prevent fraud and makes the entire process more transparent.