How to Build a Distributed Software Development Team

Encora | November 15, 2022

Building a distributed software engineering team can be a challenge for companies without the proper time or resources for sourcing, recruiting, and training engineers. Encora has successfully assembled software product teams for 20+ years, and based on that experience, we have prepared the following guide to help organizations get started.  


High Competition in the Software Engineer Hiring Market 

According to the U.S Bureau of Labor Statistics, software developer employment is projected to grow 21% by 2028. This means it will be increasingly difficult to hire talented software engineers in the United States. The rate of growth for software development jobs is 17% greater than for other occupations. As a result, companies of all sizes can expect high competition in and outside the tech space when hiring software developers.  

The number of software engineer graduates is around 400k a year in the U.S., which means demand issues will not be solved in the near future. 

What are the alternatives?  




Engineers Working from Home, across Shores  

The COVID-19 pandemic made working from home a viable option for most industries. Most software companies have now changed their policies to allow a hybrid schedule of home and office time; others are no longer investing money in physical office space at all.  

This mindset shift opened the door to the possibility of expanding these policies across borders and even continents. It is now a proven fact that companies can operate successfully with a distributed team in different countries and across multiple time zones.   

Therefore, extending your software development team by implementing an onshoring or offshoring model is a viable solution to the shortage in software development talent in the U.S. market.  

Hiring vs Extending Your Software Engineering Team  

Hiring or extending a software team will depend on the needs, capabilities, and budget of the company. The following are key elements to keep in mind:  

Hiring Your Own Team  

If you decide to recruit a team at a remote location, consider:  

  • Finding a place with optimal connectivity if you are planning to co-locate the team in an office 
  • Becoming familiar with the regulations of the target location  
  • Learning to assess a variety of resumes as CVs are written differently across the world 
  • Having to interview candidates both in English and in their native language. Since job interviews are high pressure situations, it is possible you will not come to know a candidate’s expertise as profoundly in their second language 

Extending Your Team  

If you decide on partnering with a third-party vendor to extend your team, consider:  

  • If your engagement will be long term or short term; are you extending your team for part of a project or are you developing a software product from scratch? 
  • Making sure you understand what your commitment with the vendor is; is it necessary to assist them in sourcing candidates? Are you expected to provide a project manager for the extended team?  
  • Team alignment begins with cultural alignment. Choose a vendor whose work culture, values, and ethics resemble yours.  

Onshoring, Offshoring, or Nearshoring?  

There are diverse engagement models to choose from when extending your team:  

  • Onshoring: working with an engineering team in a different city but in the same country  
  • Offshoring: working with an engineering team in a different country  
  • Nearshoring: a subset of offshoring; working with an engineering team in a different country but closer to your geographic location, usually within 1 or 4 time zones.  

Product development is different from other forms of software development. It is a team effort and team members need to stay in contact at all times. Throughout the process of software creation, many unexpected factors come into play, mainly details that cannot be neatly written in a specifications document.  

From this perspective, a team located relatively near your headquarters might be the best choice. It makes communication easier when the whole team begins and stops working around the same time.  

When a company is looking for support to complete a piece of a project, then the relationship with a third-party vendor or software developer they hired is not as essential in terms of cultural alignment or constant communication. In such a situation, speed and cost-savings could take priority. 

At Encora, we have learned that the best option is a solution tailor-made for your company. If you want to learn more about how our Global Delivery Services can help you expand your engineering capabilities, click here. 



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