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Remote Development Team: Effectiveness, Examples and Alternative

CEO Alcor
Professional areas include business structuring of tech companies in Ukraine, business & team management, leadership practices.
02 July 2021
7 min

The word “remote” should have become the byword of the year 2020, as most technology enterprises closed their physical offices and switched to teleworking. All business processes were also moved to “virtual” with the possibility to manage them distantly. Such a situation has made tech leaders ponder the opportunity to engage global talents and hire more remote developers. Inevitably, this led to the need to find the solutions for better management of such engineering teams.


In this blog article, I will explain the reasons to recruit foreign talents, how it works with outsourcing/offshoring models, as well as what risks executives should avoid in managing their distant IT specialists.


Why and How to Hire a Remote Development Team


Generally speaking, a remote development team is regarded as a group of professional engineers located in a far-away offshoring destination (often overseas), often distributed in different countries. They usually work in an office rented by their employer or work from home. Such a team is able to meet crucial business needs of any company, but traditionally technology companies (both small and large) that develop their own product exploit this model the most. Why?


1. Access to the best talent pools


Nowadays, talented professionals are distributed across the globe, and to hire a remote software development team is a great chance to enhance your in-house people. For example, in Ukraine, there are over 200,000 IT specialists who have rich experience and speak English well. Over half of all Ukrainian engineers are middle or senior specialists with a degree in computer sciences. What is more, they are young (21-30 years old) and eager to learn. No doubt they can become a strong part of your global engineering team!



2. Cost optimization


Emerging countries usually offer attractive tax incentives that can reduce operating costs for tech companies. As a result, a remote software development team will cost you less than the same group of in-house specialists. Ukraine is not an exception – it allows you to employ local developers using a specific government inventive and pay only 5% of payroll tax for each of them. Apart from lower labor costs, you will also enjoy smaller operational expenditures on equipment, procurements, office rent & maintenance (if any), IT infrastructure, etc.


3. Risk mitigation


A remote development team is easy to scale up or down. You may start with 2-3 developers to test the waters and then scale up to a team of 10, 50, or even 100 people. Hire more engineers to meet new business needs or fire them if you decide to shut down. And with the right engagement model, you can secure the finances you’ll need to invest in offshore development. Continue reading to learn more about this!


4. Acceleration of processes


Additional workforce will definitely speed up product development and enable you to go into the market faster. Distributed teams, be it a game development remote team or any other, are also helpful in keeping your business working round-the-clock by engaging specialists from different time zones.


5. Exploration of new markets


Big pools of talented IT specialists are often supported by a developed startup ecosystem in the region. If you’re interested in entering new markets for sales, starting from labor relations can be a proactive idea to find out more about the local IT industry.


Remote dev team


What are the most popular engagement models for hiring a remote development team in Ukraine?

IT Outsourcing


If you decide to outsource software development you’re not likely to receive a team. Your communication with the outsourced developers is often not possible, as usually a project manager is the only person you talk with. Vendors offer to complete your project and manage the resources on their own. The client is charged a fixed price for the whole scope of work or pays for the number of hours the outsourced developers work on the project.




Outstaffing agencies can provide you with a remote custom software development team. In this case, the client receives access to the team but then some new issues arise. Since you’re not the real employer of your outstaffed personnel, forget about genuine dedication. Sitting at the vendor’s premises, the team will work under the brand of your service provider – which exacerbates the situation. The pricing model of outstaffing services is usually referred to as “cost per resource” or “cost+”.


Offshore Development Office (ODC)


Your own software development center abroad allows for more flexiblity and independence. You are able to lead software development, manage all costs, and control any other processes. In essence, you’re building an ODC to work closely with exceptional minds. It’s like your own remote dedicated development team with no intermediaries. The only thing for consideration is operational management which I recommend delegating to a reliable partner.



Pitfalls of Managing a Remote Development Team


– Language barrier


It goes without saying that speaking the same language is vital for any remote software development team. This puts them on the same page with their colleagues, thus increases productivity. Although the majority of offshoring locations are not English-speaking nations, there are some emerging countries where IT specialists are able to communicate in English well. For example, over 80% of Ukrainian developers have an intermediate or higher level of English.


Ukrainian developers


– Clash of values


Progressive companies pay special attention to values and culture. They praise diversity, integrity, equal opportunities and expect their distant teams to share the same principles. That’s why our recruiters make every effort to find the most suitable candidate for our clients. We closely communicate with the client’s hiring manager, analyze their needs, and then attentively interview candidates. You can read the results of such an approach in our case study with BigCommerce.


– Independent contributors


Judging from our experience with various software companies, most of them wish to hire mature developers who are going to be independent contributors. In spite of this, we always recommend checking their leadership skills. Sooner or later your remote employee will grow to a leadership role with at least 4-9 people in the team – and that requires strong management and communication skills.


Is There a Better Alternative? Consider the ODC


You could probably guess that the best approach won’t work with outsourced engineers. That’s because the outsourcing model doesn’t imply your direct input and communication with developers. So, if you really want to build a strong remote software development team, we have the better solution – your own offshore development center (ODC).


The ODC (offshore development center) is a term used to describe a team of remote developers located in a country with a favorable taxation system and lower labor costs that work for a foreign company.


With your own ODC, it’s possible to implement all corporate policies, values, and management strategies. Your remote developers will act as in-house employees and demonstrate high professionalism. This model has already been tested by leading US-based tech companies like Amazon (Ring), ThredUP, BigCommerce, Reddit, Google (CloudSimple), etc.


What’s a good example?


We are proud to work with the most innovative companies that care about their employees. One of them is, a company that develops an AI platform for effective B2B sales. Their R&D office in Kyiv is supervised by the company’s CTO Andrey Akselrod. He often says that “micromanagement doesn’t work” and it’s better to hire a Country/Local Manager to lead the offshoring team of 5 and more people. If your remote dedicated development team consists of less than 5 engineers, Andrey says it’s enough to engage your Project Manager or Technical Lead for some time. What is more, the company advocates business trips between the teams to mix cultures and create an internal experience.


Alcor is a BPO company that opens offshore development centers for foreign software companies in Ukraine. We take care of all operational processes while you stay focused on programming and keep it all under your control. Choose the number of services you need from our list of business process outsourcing services that we provide:


– Recruitment of IT specialists (sourcing and interviewing eligible talents);


– Searches for the right office;


– Redecorations, lease agreements, office maintenance;


– Procurements and hardware installation;


– Employer of record services and accounting support;


– Full legal support of your business activities in Ukraine;


– Employer brand promotion in Ukraine.


That’s almost everything (except for software development) to support your remote development team in Ukraine!


Final Thoughts


All in all, team management has always been a challenge. That’s why even experienced managers and tech leaders sometimes need help in organizing their teams. If you plan to hire a remote software development team or want to expand your offshore team in Ukraine, reach out to us for assistance.


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We will provide you with statistical data regarding the number of developers in Ukraine and their average salaries. The discussion will proceed with the expected hiring deadlines and our recommendations on managing payroll, equipment procurement, and compliance matters.

We respect your privacy and will never share your data with any third party or spam you

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