Embracing Globally Remote Engineering Teams: A Cost-Effective and Efficient Approach for US Startups

Introduction

In today's fast-paced and interconnected world, the concept of remote work has gained tremendous popularity. This trend has extended beyond traditional industries, making its mark on the startup ecosystem as well. Remote engineering teams, in particular, have emerged as a viable option for US-based startups looking to unlock various benefits and gain a competitive edge in the market. 

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In this blog, we will delve into the rise of remote engineering teams and highlight the potential advantages that US-based startups can harness by embracing this approach. We will explore the essential factors to consider when establishing a remote engineering team, including team size and the key designations to hire. We will also look at the overall cost of building a remote team across prospective countries.

The Rise of Remote Engineering Teams

In recent years, remote engineering teams have experienced exponential growth. This rise can be attributed to several key factors:

1. Globalization and Access to Talent: The world has become increasingly interconnected, providing startups with unprecedented access to a vast pool of talent beyond their local regions. Remote engineering teams enable US-based startups to tap into a global talent pool, bringing together diverse skills, perspectives, and expertise.
2. Technological Advancements: Advances in communication and collaboration tools, project management platforms, and cloud computing have revolutionised the way teams can work together remotely. With these technologies at their disposal, startups can bridge geographical barriers and collaborate seamlessly across time zones.
3. Changing Work Preferences: The preferences of the modern workforce have shifted. Many talented professionals seek flexibility in their work arrangements, preferring remote work options that offer a better work-life balance. Startups that embrace remote teams can attract top talent by providing the flexibility and autonomy that professionals desire.

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According to a recent report by Gartner, 

• 58% of organisations report having at least some technology talent working in a fully remote borderless arrangement. This number has doubled in the past three years.
• India is the most selected country for recruiting borderless technology labour for European (34%) and North American (59%) companies.
• The top two areas of expertise that CIOs and IT leaders are looking at borderless talent for are software engineering/application development and application support. 

Total cost of a Remote Engineering Teams by country

Consider a hypothetical scenario of a Series A-funded startup based in the USA. This startup is contemplating remote hiring as a strategic move to accomplish time-sensitive projects and gain access to specialised talent that is not readily available in their local market. To fulfil these objectives effectively, they would aim to assemble an agile team comprising approximately 10 to 15 members, structured as follows.

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For the team structure proposed above, Wisemonk conducted a detailed research to understand the annual cost of building the team across countries favoured by North American and European companies for remote hiring (as per the Gartner report). We have also added Australia, the Philippines and Ukraine to our list.

As per our analysis, for a US-based startup, setting up a remote engineering team offers an opportunity to gain substantial cost savings. Moreover, different locations provide varying levels of cost efficiency. For instance, Philippines stood out as an incredibly cost-effective option, with the team's total cost at only 10% of what it would be in San Francisco. Similarly, in India, the same tech team structure could be established at just 16% of the cost in San Francisco. Turning to Eastern European locations, the team could be built at less than 30% of the cost in San Francisco. Even within the United States, opting to build the team in Portland instead of San Francisco would result in substantial savings of 35%.

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Scalability is an important consideration when assembling remote engineering in a country. As your business expands, having a strong foundation in a country with ample talent resources and a supportive ecosystem becomes essential. By strategically establishing a remote presence in countries with vibrant tech scenes or established talent hubs, you can tap into local networks and benefit from their dynamic growth and innovation.

India, Ukraine, Portugal, Poland, Brazil and Philippines are recommended as the most desired locations for US-based startups to establish their remote engineering competencies. From a long term perspective, these locations provide an abundance of cost-effective, skilled talent.

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Other Benefits of Globally Remote Engineering Teams

Beyond cost savings, remote work offers several non-cost related benefits for US-based startups:

1. Access to global talent: Remote teams allow you to tap into a vast talent pool without being limited by geographical boundaries. You can hire skilled engineers from different parts of the world, giving you access to a diverse range of expertise and perspectives.
2. 24/7 operations and faster time-to-market: With a remote engineering team spread across different time zones, you can achieve round-the-clock operations. This enables faster development cycles, as work can progress even when some team members are offline. It also allows for quicker response times to customer needs, resulting in faster time-to-market for your products or services.
3. Diverse perspectives and innovation: Remote teams bring together individuals from different backgrounds, cultures, and experiences. This diversity fosters innovation, as team members can bring unique insights and problem-solving approaches to the table. Collaborating remotely also encourages cross-cultural communication and the exchange of ideas.
4. Scalability and flexibility: Remote teams offer scalability, allowing you to quickly scale up or down based on project requirements. If you need to ramp up development efforts or expand into new markets, you can readily hire additional remote engineers.
5. Business Continuity and Disaster Preparedness: Remote work offers a built-in solution for business continuity and disaster preparedness. In situations such as natural disasters, pandemics, or other unforeseen events, remote work allows companies to continue operations seamlessly. Remote teams are not tied to a specific physical location, reducing the impact of disruptions and ensuring business continuity.

About Wisemonk

At Wisemonk, we help global companies streamline their remote hiring processes in India. We understand the complexities of managing talent operations in India, ranging from employee sourcing and onboarding, managing contracts, compliant payroll management and many more. As a young company, we are built on the individual experience of working with multiple Sequoia and YC-backed startups like Mesh.ai, Shipsy.io and many others.

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In case you have any queries regarding building your remote team in India, write to us and we would be delighted to assist you and provide answers.

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